The Wanganui Chronicle SATURDAY, JUNE 4, 1927. RURAL CREDIT BONDS

Wanganui Chronicle, Volume LXXXIII, Issue 19858, 4 June 1927, Page 6

The Wanganui Chronicle SATURDAY, JUNE 4, 1927. RURAL CREDIT BONDS

In the present condition of the farming industry, farmers are more than usually interested in the matter of cheap money, and are naturally desirous of complete and reliable information regarding the new rural credits scheme of the Government. Such information is also desired by another class of people, namely, those with money available for investment.

It so happens that, at the very outset of the scheme, we are given two contradictory opinions with respect to the bond issue which forms an integral part of it. A day or two ago, Mr Harman Reeves, chairman of the Dunedin Stock Exchange, made a statement in which he first pointed out that the proposed issue was not one of Treasury bonds, being put out instead by the rural credits branch of the Agricultural Department. So far, so good! But Mr Reeves then went on to say that the bonds were not guaranteed by the State and, in fact, were merely mortgage debentures, and he said that this should be clearly understood.

At about the same time, Mr W. J. Polson, Dominion president of the Farmers’ Union, speaking also at Dunedin, gave what amounted to a flat denial of Mr Reeves’ statement, as well as of an assertion made by one of the Dunedin papers. The bonds, said Mr Polson, were Government bonds; they were backed by the Government and were as safe an investment as any in the country. He mentioned that he had had the assurance of the Hon. W. Downie Stewart, Minister of Finance, on this point, and also gave it as his own opinion that the conditions connected with the loans of the Rural Credits Board were satisfactory.

Those interested in the matter are bound to experience some mental confusion on reading these two statements, each made by a man who may be presumed to know what he is talking about. They will want to know which is right, but, pending an answer, the effect will naturally be to put the investor in a cautious frame of mind, and delay the farmer’s finance. Without doubt, Mr Polson stands on the more solid ground. Even without the assurance of the Minister of Finance, the fact that he has made a special study of the rural credits system, is familiar with its operation, and has shown a critical knowledge of the scheme adopted by the Government should be sufficient to justify a verdict for his side of the argument. And when he is able to point definitely to the Ministerial assurance, it would appear that his contention is the correct one.

Meanwhile, the sooner the point is put beyond all dispute, the better, for statements like that of the chairman of the Dunedin Stock Exchange, if allowed to pass unchallenged, are calculated to wreack the rural credits scheme at the outset, and place in further peril an industry which is already in sufficiently parlous plight. No doubt, however, an official pronouncement on the subject will be forthcoming in due course, and it will be a matter for surprise if it does not bear out Mr Polson’s claim that the bonds are a sound proposition.