RURAL CREDIT.

Taranaki Daily News, 17 January 1923, Page 7

RURAL CREDIT.

NEW SCHEME CRITICISED.

By Telegraph.—Press Association. Wellngton, Jan. 15.

A brief survey of rural credit in New Zealand was the subject of a paperprepared for a ncial and statistical lecture to-day by _ rofessor J. B. Condliffe and Mr. H. Belehaw, M.A., both of Canterbury College. The conclusion arrived at was that rural industries are suffering not so much from shortage of credit at the moment as fiom unsound finance resulting from too much credit in the immediate past, and that no economist can view with equanimity schemes which offer even a danger of further inflation of credit. A solution of the Dominion's economic difficulties will ndt be found in a further era of cheap money based either on borrowing or internal inflation. The rural credit associations scheme is admirable within its limits, but can do little or nothing to assist in the present difficulties, and much the same may be said of a State Bank. If such schemes are used to provide- more liberal credit facilities in an endeavour to evade the recognition of plain facts in the present situation, the result will be disastrous. • It must be remembered that the longest artjl most severe financial depression experienced by the Dominion was the period of falling prices of 1873 to 1895, the difficulties of which weYe very largely of unwise borrowing consequent on t]ie land boom early seventies; resulting in the over-capitalisation which finally recoiled upon the banks.