“A DELIBERATE TRAP”

Taranaki Daily News, 8 August 1930, Page 10

“A DELIBERATE TRAP”

RURAL ADVANCES BONDS. MR. TOLSON’S ALLEGATION. The allegation made by the Independent member for Stratford,' Mr. W. J. Polson, in the House of R’epresenta-' tives last week that tire Royal-,-Com-missiopl on Rural Credits of 1925 had deliberately laid a trap \ for the Hon. W. Downie Stewart to walk into, was replied to by”. Colonel ’J. J.’ Esson, jwho was chairman of the commission, in an interview in Christchjirch. ' ; ‘Colonel. Esson .emphatically. ~dissocated himself from the suggestion that a trap had been deliberately laid for, the theh. Minister or. Finance,’. and said that: no such thing; had occurred.. Commenting on Mr. Polson’s remarks he stated that the commission’s report did not advocate "State .guarantee' of the rural advances bonds. On the -contrary,’ all through it directly recommended the adoption of the United States Federal Farm' Loan Board method of raising funds, under which rural bonds were not. State-guaranteed,' but the issue and collateral were subject to close Government supervision. • ’• Commenting on Colonel Esson’s reply, Mr. Polson exonerated Colonel Esson from any attempt to trap the Government, but said that The commission''did deliberately .make the Government responsible for th® whole scheme, and that the report contained ample evidence of that. “The Auditor-General audits the accounts/the- Treasury issues the bonds, and the State Advances Office administers the system,” said Mr. . Polson, “and in various other ways‘ the State handles the funds and the profits and reserves. In addition to this, of ■ course, the’ Act actually makes the State responsible for the payment of both; principal and interest. This scheme/was ’in the minds of the commission, and constituted the trap into which the. Govern-, ment-rwhicli from its subsequent actions had. obviously no .intention /of guaranteeing the • bonds —walked. . Th®. Government actually stated when putting the bonds on the market that ■there was no State guarantee.” , ~l \-;