INTERMEDIATE CREDIT

Taranaki Daily News, 9 August 1930, Page 15

INTERMEDIATE CREDIT

ATTACK. ON CONDITIONS IMPOSED. CRITICISM BY' FARMERS’ UNION. The .control of the intermediate credit system was criticised at a meeting of the North Taranaki executive of the Fenners’ Union in New Plymouth yesterday. The president (Mr. H. E. Blyde) said that while the farmers had to realise that the money came from the public in the first place and that tho Wellington Board had to proceed on safe lines, he had to agree that the basis bn which it worked was altogether too conservative. The local board would he able to do a great deal more busit b an at present and still ‘‘play safe” if it were allowed more freedom. Tim meeting decdied, to support the protect being made by the South Taranaki executive against the conditions of control.

The rural intermediate credit system had developed into one of the most conservative lending institutions operatingin New Zealand, said the secretary, Mr. D. le. C. Morgan Ho fully agreed with the tomplaints made in South Taranaki on Thursday. There was no -doubt at all that the system was being strangled by “red take.” The present system was very peculiar. The Public Trustee, in the position of district supervisor, was a member of the local directorate and, although on the one.hand he was to a large extent sympathetic with the views of the New Plymouth Board, on the other hand he was being held back by the central body -in Wellington. Under the present conditions the system could not function as it should. Mr. Morgan gave an instance where the North Taranaki board had had an application from a man who, on a conservative valuation, had over £lOOO worth of security, and desired to borrow £3OO to buy stock. On the strength of ths favourable hearing given him by the North Taranaki Association he had gone ahead to buy the stock. Besides the security mentioned, he would have then had the stock, and he had found three men who would between them guarantee him to the extent of £l5O. Yet Wellington turned down the application and asked that the three men put up collateral security for the £’so, which meant that they would have had to take out a bill of sale over the stock or provide some other security. The system, was cramping business, said Mr. Morgan. Payments for the loan were spread, equally over a period of five years, so that it was not iong before a substantial proportion was repaid uid, as in many cases tire money \.as deducted from the factory cheques, the association was almost certain to get it. The matter could not be too seriously stressed, because they had an organisation that could be of great benefit to farmers if only the way was made clear.

Anyone buying bonds was guaranteed to the extent of £400,000, said Mr. Morgan. He thought it would be held legally that the bonds were State guaranteed. The local directors were men of repute and integrity with the requisite local knowledge, and that should be the principal factor considered in the granting of loans.