8.—14.

The present investments of the Rural Intermediate Credit Redemption Fund are derived from — One-third of advance of £400,000 from the Consolidated £ s. d. Fund under section 16 of the Act .. . ■ 133,333 6 8 One-half share of profits up to 30th June, 1934, appropriated in accordance with section 39 of the Act . . 14,698 11 9 Interest received and invested and interest accrued to 30th June, 1935 . . • - - • • - 43,007 14 2 £191,039 12 7 The face value of the investments held and accrued interest thereon to the 30th June, 1935, is £191,539 10s. 4d., the additional amount of £499 17s. 9d. representing the difference between the premium received on conversion of Government securities held as at 31st March, 1933, £1,136 16s. 3d., and the premium paid on purchase of investments, £636 18s. 6d. In addition, the Redemption Fund includes a further sum of £982 16s. sd. not yet invested, making a grand total of £192,022 9s. The investments in the course of the Board's ordinary business amount to £259,273 9s. 9d., classified as follows : — £ s. d. Advances to associations under Part II . . ■ ■ 195,512 14 1 Advances to farmers under Part 111 • • • ■ 62,338 11 6 Bills discounted . . . . ■ • • • • • 1 > 422 4 2 £259,273 9 9 In the above table the advances are shown at the amount actually owing to the Board, but in the balance-sheet the sum of £7,757 6s. 7d., representing reserves provided for possible losses, has been deducted from these figures. 41. The figures published in Appendix I to this report show that the volume of advances outstanding or under consideration is smaller than at the end of the previous year. Although difficult farming conditions were experienced during the year, in many cases borrowers were able to make repayments of their advances in accordance with the terms of their loans. These repayments, less new moneys advanced, account for the decreased investments. 42. Accounts of Associations. —The accounting work of the associations is still being supervised by the officers of the Board, who give the secretaries such assistance as is required. CONCLUSION. 43. It will be seen from the foregoing report that the year just closed has in many respects been an abnormal one. Funds for investment in rural securities have been in plentiful supply, and, as a result, rates of interest have declined to an unprecedentedly low level. Moreover, the Board has been compelled to hold large sums uninvested throughout the year. This position has already been improved to a considerable extent by repayment of maturing debentures, and the Board anticipates a more favourable working result in the present year. 44. It is very gratifying to the Board to report that during a period of more than seven years, including some of the most difficult ever experienced in the Dominion, and with a total lending business of £1,138,240, only two losses have so far been experienced by the Board, the total amount involved being £504 13s. sd. only. _ 45. Once again the Board desires to express its sincere appreciation of the loyal and efficient service rendered by its officers, which has contributed materially to the sound position of the Board's investments at the present time. Tribute to the valuable help afforded by directors of associations and members of district boards has been paid in earlier portions of this report. I have, &c. (for and on behalf of the Board), E. O. Hales, Commissioner. The Right Hon. the Prime Minister. 2—B. 14.

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