RURAL CREDITS.

Otago Witness, Issue 3885, 28 August 1928, Page 33

RURAL CREDITS.

POSSIBLE LIBERALISATION. WELLINGTON, August 22. Dealing with the matter of rural credits in his speech in the House of Representatives this afternoon, the Minister of Finance (Mr W. Downie Stewart) main* tained that the Government had fulfilled all the obligations that were upon it according to what had been asked for, but he hinted that it might increase the sale of rural bonds by selling abroad and by shortening the term. Mr Stewart said the Government was considering whether it could not vary the term with a view to inducing the ordinary investor to take the bonds up more rapidly, although, as a matter of fact, subscriptions were being made at the present time on the present issue. It had been the wish of the farmers that the bonds should be popularised in New Zealand. The first issue was for 30 years, and the Government was wondering whether a shorter term would make the bonds more popular. It was a question of experience that they had to gain. Already £600,000 worth had been sold. It had been suggested that the issue was being raised in such a way that it should be treated as part of the Public Debt. It was apparent that that was nor intended, and he would take steps to ciear up that difficulty during the present session. It had been suggested that the scheme was dragging, but the Government had kept faith with those who had asked it to launch the scheme. The Bank of New Zealand had taken between £350,000 and £400,000 worth. The Leader of the Opposition: Have any of the other banks taken any? Mr Stewart: Not that I know of. Mr Holland: Did the general public take the rest? Mr Stewart: Yes. An lion, member: Have they been selling lately? Mr Stewart: The day before yesterday £6OOO worth were sold. That is not much, but we might expect them to be slow to begin with. There was the fact that the Government departments were also lending freely where there was the security. Last year the Public Trustee had lent between £3,000,000 and £3,500,000 on mortgages in the country districts. No mortgages were being turned down bj' the Public Trustee where there was the security. He was also advancing on long-term mortgages. The loan companies had also ample funds for lending. Whether it was a question of the margin being too tight he did not know. If so, that difficulty must be a North Island one, because there was no difficulty in the south at all. The chairman of a trust company there had told him that they were lending freely. Lending 95 per cent, on a farm was very different from lending the same amount on house property, because the house was always there, but farming land could be neglected for six months and then the value would not be there. In the country you might get a margin up to 80 per cent, on farming land, but from it would more likely be 60 or 70 per cent. The Government scheme was more liberal. He repeated that the lending institutions in New Zealand had ample funds, and that if the security was there the farmer would get the money. It might be that some of the lenders had had their fingers burnt and were cautious. He did not know. There had been no breakdown on the Government side in carrying out its scheme.