INTERMEDIATE CREDITS

Wairarapa Age, 5 April 1928, Page 5

INTERMEDIATE CREDITS

FIRST MEETING OF WAIRARAPA BOARD. LOANS AND LENDING RATES. r COMMISSIONER'S EXPOSITION.

An event of considerable interest, not only to the fanning community, but to the public at large, took place yesterday, when the first meeting of the Wairarapa District Rural Intermediate Credit Board was held. Those present at the meeting were the District Intermediate Credit Supervisor for the Wairarapa (Mr. S. J. Smith, District Public Trustee) who is chairman of the new district board, and Messrs. Carrick, E. P. Powler, T. Moss and B. V. Skeet. ' This district board has been set up the central Rural Intermediate Credit Board, in terms of the Rural Intermediate Credit Act of last session, for the purpose of dealing with local applications for loans under the Act. At the opening of yesterday’s meeting, the chairman read a message addressed to the members by the Commissioner of Rural Intermediate Credit (Mr. J. M. Macdonald, the Public Trustee) on behalf of the central board. THE TEST OF SUCCESS. In his message the Commissioner stressed the point that, though the Government is providing a substantial amount to enable the board to commence lending operations without delay, the ultimate test of the success of the new scheme will be the ability of the board to command a flow of capital from the investing public of the Dominion and investors abroad for the development of its lending business, thus providing an uninterrupted supply of funds for the farming community. The board therefore relied upon the asci stance and co-operation of the various district boards throughout the Dominion to maintain a sound standard of lending, and thus to gain and keep the confidence of investors. The Commissioner pointed out the benefit the farmer would obtain from the low rates of

interest at which the board would be able to lend money upon the security of stock and chattels. THE BATE OF INTEREST. He also mentioned that the board has fixed its lending rate for the present at per cent., but that the continuance of that rate would depend upon the board being able to raise funds from the public at a cost which would enable its lending business to be conducted at. that rate upon sound lines. The special co-operative rural intermediate credit associations contemplated by the Act would be charged 6 per cent only, but would be required to charge per cent, to their members, and to use the amount resulting from this concession of interest for working expenses and establishment of reserves. In referring to the provisions of Part 111. of the Act, which authorise the board to make loans direct to farmers without the intervention of assoeiatoins, it was mentioned that these provisions did not appear in the Bill as originally submitted to Parliament, and £hat it had been, suggested in some quarters that the introduction of this system of direct loans would operate against th# formation of associations. These predictions had already been falsified, by the formation of one association in the South Taranaki district and the active steps that were being taken in other districts to form other associations. The Commissioner emphasised the fact that the provisions of Part HI. of the Act were merely an extension of similar provisions contained in the State Advance Amendment Act of 1922, which authorised direct loans to farmers of amounts not exceeding fiGOO. The Royal Commission of 1925 on Rural Credits had made no suggestion that these existing provisions should be repealed: and the new requirement that 20 per cent, of the loan must be guaranteed provided an additional measure of security for investors in the board’s debentures. The Commissioner’s message then went into detail with regard to various provisions of the Act and concluded by central board desired the district boards to act in many regards in an advisory capacity, and that any suggestions or recommendations the district boards might have to offer would be appreciated and their recom- ?_ 4 vep consideration. ffrst applications. The board then proceeded to consider certain matters with regard to Joans in general upon which the central board nad asked for its recommendations having particular reference to employment of valuers and the fixing of standard values. 6 * applications for loans, were before the board. It was decided to entertain two of them on certain conditions being fulfilled. The board decided t< meet monthly ft Present, although it was recognised that more frequent meetings may be necessary as time goes on w ? s ; e P ort< ; d fhat there was a prospect of forming a rural intermediate credit association close to JfasterT' BONDS TAKEN UP. ,PROSPECTUS TOTAL EXCEEDED. WELLINGTON, April 4. The Minister of Finance stated today that the issue of £400,000 Rural Advances Bonds had been subscribed. The right to accept amounts in excess of that stated in the prospectus was, However, being exercised.—(P.A.)