3

8.—14

7. The rapid expansion recorded in all classes of the business has resulted in the advance of £400,000 from the Consolidated Fund provided for by the Act being fully absorbed, and has made it necessary for the Board to go on to the open market to secure the necessary funds for the continuation and development of its lending business. The practice adopted by the Board of requiring substantial payments in each case on a basis within the individual borrower's ability in view of the total commitments with which he is faced has resulted in the fullest use being made of the funds placed at the Board's disposal, as the repayments received from time to time reach a large total, and it has been possible to employ them in making further loans available to other borrowers. It is the aim of the Board to establish its debentures in the financial world as a readily marketable form of security, witli adequate assets supporting them, in which investors for both large and small sums will have full confidence, knowing that the Board's operations are faithfully and economically conducted. The comments regarding the Board's lending policy which have received extensive publicity have been confined to the criticism that the loans are granted only on a conservative basis, and will in themselves be an assurance to investors that the Board bears constantly in mind its obligations in regard to the moneys entrusted to it for investment. 8. It cannot too often be emphasized that the legislation provided the means for farmers to secure improved financial facilities largely by their own efforts. This applies to the provision of funds for the Board's business as well as to its lending operations, and the interest of farmers in the scheme should not, therefore, be confined to the obtaining of loans from the Board or the organization of the farming community in the various districts for the purpose of the submission of loans to the Board, and their criticism of the lending policy adopted by the Board should not be restricted to a borrowing point of view. It will be recognized that the maintenance of a prudent standard of lending will ultimately be to the greatest benefit to farmers as a whole; as it will mean the consolidation of a financial structure commanding a constant supply of funds for farmer-borrowers with acceptable security, of dimensions and with a degree of permanence which would otherwise not be possible. It also rests with farmers in their own interests to use all means at their command to ensure the success of the debenture issues made by the Board. 9. The following statements have been made in regard to the Board's operations, and indicate the relations which generally exist between the Board and co-operative rural intermediate credit associations and dairy companies submitting applications or discounting promissory notes with the Board : — Extract from Letter bated ,13th August, 1930, from the Chairman op Directors of the New Zealand Co-operative Dairy Co., Ltd., Hamilton, to the Commissioner. The rural intermediate credit scheme as arranged between your Board and this company has rendered excellent service to our suppliers, and the relationship existing between your Board and my company has been appreciated by us, and I have no hesitation, whatever in saying that it has been worked without anything to mar the progress of the applications received. Extract prom the Waikato Times of the 19th August, 1930, reporting the Annual General Meeting op the Otorohanga Association. The directors expressed their appreciation of the courtesy of the District Supervisor, Hamilton, and his staff, and of the sympathetic consideration given by the Rural Intermediate Credit Board. Extract from the Report of the Directors of the Horowhenua Association to the Annual General Meeting of the association. In conclusion, we would state that the result of the first year's operations is very gratifying, and the extent to which the resources of the association have been utilized gives positive proof that the establishment of the system of rural intermediate credits has fulfilled a long-felt want amongst certain members of the farming community of New Zealand. We have no hesitation in stating that as the benefits of the scheme become more widely known, its usefulness will still grow further as a factor towards developing the farming industry of this district.