INTERMEDIATE CREDIT

Taranaki Daily News, 15 July 1930, Page 7

INTERMEDIATE CREDIT

ISSUE OF DEBENTURES.

PRIME MINISTER’S STATEMENT. ; The first public ififiue of debentures j by the Rural Intermediate Credit Board - has been approved by the Prime Mims- . ter,' Hon. G. W. Forbes,' according to a statement issued by him this week. Mr, Forbes referred to the progress with the extension of the rural intermediate credit system since it came into operation in 'January, 1928. At the outset, he said; the system had been utilised principally by dairy farmers, owing largely to the. active assistance rendeied°by dairy companies in guaranteeing, ■applications by their suppliers for loans from the board and also by discounting suppliers’ promissory notes for amounts up to £2OO for a maximum period of two years. The assistance given by dairy companies in this connection, said Mr. Forbes, had'enabled dairy farmers > obtain loans for the purchase of fertiliser and additional stock and. for the development of their properties at a minimum of expense and under favourable terms of repayment. Until recently the system had been . little used by sheepfarmers, the chief hindrance being that the loan to any one borrower was limited to £lOOO, which was somewhat below the normal requirements of a sheepfarmer or grain-grower and that the system of a fixed loan did lot meet the special circumstances of thooe tarm ers who were accustomed to managing their finance on the overdraft system. Those difficulties have now been overcome by the passing of the Rural Intermediate Credit Amendment Act Ot last session, which, among other matters, authorised the. raising of the maximum sum which may be adv J to any one farmer from £lOOO to £2OOO, and by the adoption of an overdraft or “limits” system, for sheepfarmers and grain-growers. ' The Prime Minister said it waa.gra tifyina to find that since the special arrangements had been made the woil of the board in the sheepfarming and grain-growing districts had B J 0W “ a steady increase. He referred to the'Suable assistance given by members the Farmers’ Union and other lead: „ farmers in facilitating the formation of intermediate credit associations, with the object of utilising the provisions of the Act. Many leading farmers had joined the associations, not with tie •object of availing themselves of the lending facilities provided by the Act but solely with the object of assisting the associations. Up to the present 3 associations had been formed and the formation of several additional a&,o ciations was proceeding. It was evidence of the extent to which the system had grown that it had now become necessary to place an issue of debentures on the market, the sum of £400,000 advanced from the ConsoliWnnd bv way of loan to commence the system, having been fully absorbed. The debentures would constitute a floating charge on the whole o So board’s including«»£ in the redemption fund, bills of sale mortgages and other investments in the ordinary business account of the board. The debentures were -also i ’ rd ven priority to the claim of the Ci o wn hi respect of the repayments of the advance from the Consolidated nd ’ The Prime Minister expressed t e hope that a ready response to the> issue would be forthcoming from inv _ » and that in particular those institutions close!v connected with the farming in-

dustry which had money available for investment would' take the opportunity now offered of investing-their funds at a satisfactory rate of interest and at the same time materially benefiting the primary industries of the Dominion.