8.—14.

The liquidation of the association which was referred to in the previous report as being wound up under an order of the Court has not yet been completed, but a dividend of 15s. in the pound has been received by the Board, and the receipt of a final dividend sufficient to meet the balance owing is practically assured. 24. Losses. —The amounts owing to the Board in respect of the losses suffered on loans granted by the Central Southland and Mid-Canterbury Associations have been met from calls which have been paid by shareholders. The associations are continuing to collect calls, in one case to meet a small deficiency in its appropriation account, and in the other to adjust amounts as between shareholder and shareholder. An association which made a loss during the past year was able to meet the deficiency from its paid-up capital and reserves. Two substantial losses sustained by another association whose paid-up capital and reserves are exhausted have rendered it incapable of continuing its lending operations, and the association will probably have to be wound up. 25. Delegated Powers. —The Board's experience is that directors of associations have acted with care and prudence and with due regard to the safety of the funds advanced in the exercise of the powers delegated to them. In comparatively few cases have there been departures from the Board's requirements. As stated elsewhere in this report, the powers of directors have been enlarged during the year, and the Board is always prepared to welcome from directors any suggestions for further modifications which they consider will be of benefit to the system. 26. Value of Association Method. —The Board has from time to time emphasized the value to farmers of the association method of obtaining loans, and the advantages to be obtained from having available the advice and experience of the farmerdirectors and the secretaries. The excellence of the work performed by the great majority of directors and secretaries is now well recognized, and it is almost superfluous for the Board to place on record its appreciation of it. It is evident that there are many farmers who are in a much stronger position to-day than they would have been had they not had the benefit of the sympathetic counsel and guidance of the directors and secretaries of associations. 27. The Companies Act.—The Rural Intermediate Credit Act, 1927, authorized the making of regulations for, inter alia, the exclusion of any provisions of the Companies Act, 1908, or amendments thereof, from operation in relation to any co-operative rural intermediate credit association, and the regulations made under the Rural Intermediate Credit Act on the 21st December, 1927, provided that several sections of the Companies Act should not apply to any association. Consequent on the passing of the Companies Act, 1933, which consolidated and amended the Act of 1908 and its amendments and introduced provisions new to New Zealand, the relative paragraph of the regulations under the Rural Intermediate Credit Act was, by Order in Council of the 29th October, 1934, deleted, and a new paragraph substituted under which several sections of the Companies Act, 1933, are excluded from operation in -respect of associations. 28. Business transacted through Associations. —The total moneys advanced by the Board under association loans during the year was £66,311, as compared with £40,379 for the year ended 30th June, 1934, an increase of approximately 64 per cent. These amounts were advanced by the Board to associations or their solicitors for disbursement to borrower-members, and do not include amounts advanced to borrowers by associations from funds in hand representing repayments received from other borrowers, so that the total amount made available to farmers through associations is considerably in excess of the amount shown above. New loans (as distinct from further advances under existing loans) numbering 165 were taken up by association borrowers during the year ended 30th June, 1935, and there were 984 loans current at the end of the year. As at the 30th June, 1935, the amount owing to the Board by associations was £195,513, as compared with £195,552 at the 30th June, 1934. These figures refer to the net investments after crediting the repayments received from borrowers.

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