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his long-term obligations. His engagement with the credit banks of course remains. Borrowers are entitled to pay off their mortgages, either in part or in full, at any time. The borrower receives cash. The bonds are sold when the market is favourable, and the cash deposited in the central bank until needed. Borrowers' properties are valued by the banks' experts ; there is a substantial reserve fund, and onlv 10 per cent, of the share capital has been called up. The borrowers are jointly liable for the bonds issued. The organization has been very successful. Owing to the excess of deposits, the central bank and its societies has been for some years financially independent of outside help. The second largest co-operative institution is the Raiffeisen Bank of Utrecht, which is undenominational in character, and which has no separate mortgage bank, but has enormous deposits and reserves, and lends through its societies to nonagriculturists as well. There are in addition several other land-mortgage credit institutions in various parts of the country. The Dutch farmer is in the unique position of having money to lend. BELGIUM. As in Holland, finance, politics, and religion are very much interwoven in Belgium, where rural credit institutions are independent of the Government. The societies are not issuing bonds, being able to finance on their deposits, which are more than sufficient to meet loan demands. The Bank of Louvain, which is a Catholic institution, is the most important Belgian rural credit organization, and, while it makes advances to all classes of the community, does not loan on long terms on land to any extent. Loans are made to societies affiliated with the bank, or to applicants in places where there are no societies. Loans contain amortization provisions, and are up two-thirds of value. The interest charge is 5j per cent, up to 25,000 francs, and 5| per cent, on larger sums. The societies who work on | per cent, charge only that additional amount to the borrower. Direct loans, not through the societies, are made to individuals at 5f and 6 per cent. The funds available in May, 1926, were 670,000,000 francs, which was much in excess of agricultural requirements. Consequently, while farmers get preference in the matter of loans, others may now borrow, but are charged the ruling rate of interest, which is higher than that charged to farmers. An unusual feature is that for long-term deposits a transferable receipt is given. Deposit receipts are not so heavily taxed as bonds, and are therefore more popular, and much used. Loans do not exceed fifteen years, and the rate of interest is varied according to the risk. A mortgage is sufficient security for large amounts, but small sums on personal security are never lent without a guarantee. When there is a surplus in the societies, as is often the case, the money is deposited with the central bank, which finds investments for it. The Belgian societies do not differ materially from the Dutch. What differences there are are due to the fact that Holland exports foodstuffs, while Belgium imports them, and that the co-operators are more of a national type in Holland and less denominational than in Belgium. RECOMMENDATIONS. To meet the necessities and requirements of New Zealand agriculture, it is recommended that — 1. The administration of rural credit should be vested in a separate branch of the State Advances Office, to be designated " The Farm Loan Branch," with such further additions in regard to representation, or agencies, as may be found necessary to extend the functions of the said office in conformity with this proposal. 2. It is desirable to incorporate a system of intermediate credit for the use of agriculture.