INTERMEDIATE CREDITS

Taranaki Daily News, 11 August 1930, Page 14

INTERMEDIATE CREDITS

MONTHLY MEETING OF BOARD. By Telegraph.—Presss Association. Wellington, August 9. At the monthly meeting of the Rural Intermediate Credit Board at Wellington, the Cammissioner, Mr. J. W. MacDonald, presided. Important proposals by a large dairy company for the utilisation of a discounting method providing .financial assistance for its suppliers were considered. A return as to arrears of interest and instalments of principal owing by borrowers was placed before the board which indicated that there were very few cases in which borrowers had not fully complied with their obligations. The position was considered by members of the board to be extremely satisfactory, particularly in view of the fact that provision was made in the case of every loan for substantial repayments annually and except in a few cases, these payments had been made in addition to interest payments. In regard to the present public issues of debentures the commissioner reported that sufficient funds were in sight to provide for requirements of during the period preceding the productive months of tlie coming season. Throughout the summer months the demand upon the part of farmers for financial assistance was not. as pronounced as during the winter months, and the requirements of borrowers could then be largely provided for by the board out of the substantial repayments received monthly from the current loans. Sufficient loans were available to ensure that the lending' operations of. the board would proceed without' interruption.

AID TO FACTORY SUPPLIERS.

DISCUSSION AT ELTHAM. An explanation of . the working of the rural intermediate credit system was given by -Mr. J. C. Robins, District Public .Trustee at Stratford, to.the annual meeting- .of shareholders of. the Elthain Dairy Company on Saturday.. He explained how suppliers could obtain .temporary financial assistance up to £2OO, for 12 months. The method was for the borrowers to give promissory notes to their , dairy, company .which were redeemed out of the ; milk, cheques due to the suppliers. .The ..rate -of interest was G 1-3 per cent. / . - Mr. J. Hunger stated that there'would be a risk of the dairy, factory having to .stand losses. .. The chairman said . that wherever money was lent there was risk, but the risk in this case would be very small, as there would be an order against milk ’ Mr. <J. Cocker pointed out that this was one of the most advantageous forms of rural credits. It provided money at a much lower rate than that, of ordinary chattel security.’ ” He ’felt that these credits would be very\bene-’ ficial to the company, and he thought the risk would be very small, indeed. It was the company’s duty to assist the suppliers if it did not create a risk for the others. He moved'that it be a recommendation to the ' directors to adopt the discounting of promissory' notes for rural intermediate credit's to shareholders; ’ Mr. R. J. Knock ey said he was not very keen on the scheme. It had been put to them only the previous day. He was hot satisfied to go on with it until lie had gone very, much further into it. He thought the company should get something out' of it to create a sinking fund to stand against losses; . The’ motion was carried.