THE Wairarapa Age MORNING DAILY. THURSDAY, AUGUST 12, 1926. RURAL CREDITS.

Wairarapa Age, 12 August 1926, Page 4

THE Wairarapa Age MORNING DAILY. THURSDAY, AUGUST 12, 1926. RURAL CREDITS.

The report of the Rural Credits Commission obviously is not a document on which any hasty opinion should be pronounced. As may be seen from the extended summary we publish to-day, there are many details in the recommendations and observations of the commission which call individually for careful consideration. There does not seem to be any doubt, however, that this report will stand out as a timely and informative survey -of the problems of farm finance, and that it will be of great value in indicating how the practical lessons that other countries have learned in dealing with these problems may best be applied in New Zealand. An opinion may be ventured tentatively that the merit of the report is chiefly in the ease it makes eut for dealing with the problems of farm finance methodically and in accordance with a comprehensive plan. A really effective mobilisation of farm securities through the agency of co-operative associations and agencies undoubtedly would provide a better basis for the long-term and short-term credit that farmers need than is -available to-day. 'There are some apparent obstacles, however, to the comprehensive pooling of farm securities that the Commission contemplates. The most obvious of these obstacles is the extent to which these securities are already mortgaged. Allowance should perhaps be made in this connection also for the conservative disinclination of many farmers to modify their present financial arrangements where these are serving their purpose reasonably well. There is nothing rash or revolutionary in the Commission’s proposals regarding security margins and rates of interest. It will be observed that it is proposed to raise money at not more than 51 per cent., and to fix the interest to be charged to borrowers at not more than one per cent, over this rate. A lending rate of 6J per cent, is thus suggested as compared with, the- rate of 6 per cent, which figures in the long-term loan proposals of the Bank of New Zealand. Much contention no doubt will centre on the Commission’s proposal that the Government, in addition to making a straight-out grant of £20,000 towards the preliminary expenses of the rural credits scheme, should advance an amount of £500,000 free of interest for ten years. Against any objections that are raised to these calls on the Consolidated Fund, producers are able to point to the fact that'secondary industries in this country are heavily subsidised per medium of the Customs tariff, but opposition is always raised to any new subsidy, irrespective of its relative claims to consideration. While much that the report contains must be examined carefully and at leisure, it is already clear that it effectively opens the way to the practical discussion of the problems with which it deals. These problems are of capital importance to New Zealand, and it should be easy to agree that the time is more than ripe for serious effort to bring about their solution.