AGRICULTURAL BANKS.

Shannon News, 10 July 1923, Page 1

AGRICULTURAL BANKS.

Mr. W. J. Poison has been having it much his own way in his energetic and capable advocacy of his agricultural bank scheme during *. the last month or two, * but in the "Evening Post ” of Saturday, a correspondent, evidently with some , knowledge of finance and of the needs of the farmers, challenges the contentions ot the Dominion President of the Farmers’ Union, and makes out a very strong case for the other side. “ Mr. Poison’s agricultural bank,” > he- says, “ involves a shocking piece of class legislation, and its basis is ‘ gift and guarantee.’ To start the bank, the State is required to make* a gift f of £IOO,OOO, for this carries no interest and there is no fixed' date for its repayment, much less any guarantee of repayment.” In addition to this gift the correspondent goes on to explain, the Government is to guarantee the land bank bonds, to exempt them; from stamp: duty, and their holders and the bank itself from income tax. " Why ? ” he asks, “ should this* projected bank be treated differently from, sa,y, a building society or a mortgage so-. ciety ? ” The suggestion that a precedent was created by the State’s assistance to the Bank of New Zealand in 1894, is'ridiculed. The Government, it is declared, went to the assistance of t'he Bank of New Zealand thirty years ago to save the depositors and avert a financial crisis. This < authority admits that the farmers play a very important part in maintaining the prosperity of the country and promoting its general welfare, but he protests strongly against the assumption that a knowledge of their own business makes them masters of every other business. He quotes t'he experience of farmers' co-operative concerns, of farmers’ freezing works, and of farmers! excursions into trading ventures-of other kinds. "Is not the inevitable conclusion to be drawn from this' long list of failures?” he asks, “that’ farmer management and inefficient management are convertible terms V’ He does not wish anyone to run away with the idea, that Mr. Poison’s agricultural bank is. intended to. be one of those modest affairs that serve the needs of the frugal Danish and German occupiers of a few acres. Besides being free to lend up to £20,000/; > is to receive deposits, both fixed and lat call, issue bills and-, drafts and letters of credit, discount bills, grant overdrafts, and do anything else the ordinary banks can do. This being so, he wants <to know what prospect there could be or such an. intricate and perilous business being successfully managed by a board of worthy, but entirely inexperienced, farmers.