8.—14.

6

Prior to the 1929 session of Parliament the maximum amount which could be advanced to any one farmer was £1,000, but this limit was increased to £2,000 by an amending Act passed during that session in consequence of representations made by the Board that the lower limit did not make it possible for sheep-farmers and grain-growers who desired to do so to avail themselves of the facilities provided by the Board. Loans may be applied only for purposes approved by the Board ; the maximum period is live years in the case of loans to farmers and three years in the case of loans to co-operative societies. No maximum term is provided in regard to discounting transactions ; but, in view of the nature of this class of business, the Board usually arranges for the amounts advanced to be repaid within a year from the date of discounting, with a maximum term in any case of two years. As stated previously, the security for intermediate credit is generally live-stock, farming-implements, non-perishable farm-products, and the like, and in the case of loans to farmers under the headings (a) and (b) above a mortgage over the borrower's stock and chattels is required. Collateral security over the farm property is accepted where the value of the stock and implements shows substantially the margin for the loan required by the borrower and he has a good equity in the property from a lending point of view which he is prepared to pledge as security. Further security is provided in the case of association loans by the responsibility of the associations, supported by their called-up and uncalled share capital and reserves created, for the loans granted to the individual members, and in the case of direct loans by the guarantees of approved persons or companies for 20 per cent, of the original amounts granted or any larger percentages required in regard to particular loans. For loans granted to co-operative societies under Part IV of the Act security will be required over the live-stock or produce belonging to the companies. In discounting transactions the Board holds a promissory note from the farmer who has obtained accommodation by this method, but its main security will be in the endorsement of the discounting company which in every case is accepted only where the company's ability to meet the total notes to be endorsed and discounted by it has been ascertained in advance through an adequate investigation of the company's financial position by the Board's accounting officers. RURAL INTERMEDIATE CREDIT REGULATIONS. 11. Authority was given by the original Act for the issue by Order in Council of regulations governing the administration of the Board's business in matters of procedure and detail. Regulations which were made on the 21st December, 1927, and published in the New Zealand Gazette No. 88, of the 22nd December, 1927, made provision for the control and working of the district boards and co-operative rural intermediate credit associations in addition to laying down the general lines upon which the Board was to proceed in the administration of the system. Amending regulations made on the 17th September, 1928, and published in the New Zealand Gazette No. 70, of the 20th September, 1928, provided mainly for the simplification of the proceedings of co-operative rural intermediate credit associations. Further regulations made on the 13th January, 1930, and published in the New Zealand Gazette No. 2, of the 16th January, 1930, extended the scale of legal charges and made other alterations which were necessary in view of the provisions of the Rural Intermediate Credit Amendment Act of 1929, principally those providing for the increase of the limit for loans to farmers from £1,000 to £2,000. ADMINISTRATION OF SYSTEM. 12. Constitution of Board.—As constituted bv section 3 of the Rural Intermediate Credit Act, 1927, the Rural Intermediate Credit Board, to which, the administration of the system was entrusted, was composed of seven members. The Public Trustee ex officio was made the principal executive member of the Board, under the designation of " Commissioner of Rural Intermediate Credit," and it was provided that of the remaining six members one at least must have practical experience in farming.