8.—14.

DISCOUNTING. 37. The discounts effected have shown a relatively larger reduction than the business of other classes transacted by the Board, and it would appear that the factors already referred to in this report as influencing a general decline in the volume of business have operated with special force in the case of this particular method of borrowing. Under the discounting system borrowers are allowed only one year, or in special cases two years, in which to discharge their indebtedness, and the shortness of the period allowed has no doubt had an effect in deterring farmers from utilizing this method of borrowing. During the year the Board accepted the endorsement of one additional company, the limit fixed for the acceptance of the endorsement of a company was increased, another was reduced, and for adequate reasons another was cancelled. At the 30th June, 1933, the number of endorsements of companies accepted and in force was fifty-four. A few endorsements have been accepted from individuals. 38. Matters of Practice. —Cases have arisen in the course of the Board's lending operations where promissory notes have been met by endorsers and almost immediately thereafter the same makers and endorsers have submitted new notes for discounting for equal or slightly reduced amounts. In order to ensure that the same liability is not carried on from year to year, the Board has decided that subsequent notes shall not be discounted unless it is demonstrated that they represent new advances and are not in effect renewals of notes previously met. It is in the makers' own interests that notes should be fully met before maturity and that the liability should not be allowed to remain outstanding over an extended period. 39. Business transacted. —The discounts effected during the year totalled £5,625 as compared with £23,193 for the year ended 30th June, 1932. The total discounts effected from the inception of the system to the 30th June, 1933, amounted to £64,317. The total value of notes and bills outstanding at the 30th June, 1933, was £5,300, as compared with £15,733 at the 30th June, 1932. DAIRY COMPANIES. 40. Dairy companies have continued to give active support to the system, and many which are strongly convinced of the benefits of the system have encouraged suppliers in need of finance to obtain their requirements from the Board, either under Part 111 of the Act or the discounting system, or from associations, and have in many cases made their guarantees or endorsements available to assist the suppliers. The discounting system is particularly suited to dairy-farmers, as it enables them to obtain small loans for short periods at practically no expense apart from the payment of interest at 6 per cent, on the daily balance owing. The support and assistance rendered by companies has been of great value in extending the lending operations of the Board and associations. It should be mentioned, also, that many companies have been the prime movers in or have given practical assistance to the formation of associations in order that their suppliers may have the benefit of the operation of associations in their districts. There is undoubtedly a wide field for the rendering of assistance by dairy companies, Math benefit to themselves as well as to their suppliers, and it is anticipated that, as conditions in the farming industry improve, still more companies will assist their suppliers in this way. FINANCE AND ACCOUNTS. 41. The accounting system provides for separate records of the advances and transactions of each district board. The district boards' accounts are incorporated in the central Board's general Profit and Loss Account and Balance-sheet, which are thus a complete record of the Board's transactions. Moneys not immediately required for the settlement of loans are temporarily invested on terms whereby they are available as soon as required. The Board's funds are thus at all times interest-bearing.

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