8o AUSTRALIA - AGRICULTURAL ECONOMY IN GEN'ERAL 



derived from the General Loan Fund at a slightly higher rate of interest. 

 Since its re-constitution under the new Act, the operations of the bank 

 have rapidly increased. The amount authorised to be raised under the 1906 

 Act was £1,000,000 but by amending Acts of 1907, 1909, 1910, 1912, 

 1913 and 1914 its capital has been successively raised to its present level 

 of £4,500,000. 



Objects for ivhichloans are granted. — Under the consoHdating Act of 1906 

 advances were made to settlers, if the trustees thought fit, for specific 

 objects such as ring-barking, clearing, fencing, draining, water conserva- 

 tion, discharging existing mortgages, also the purchase of stock for breed- 

 ing purposes. Purchase of machinery was added later. Advances to any 

 individual could not exceed £500. Under an amending Act, 1912, the pro- 

 \nsions were extended in various directions and now read as follows : — 

 « Subject to the provisions of this Act the bank may make advances to 

 persons engaged in the business of farming or grazing, or in agricultural, 

 horticultural or pastoral pursuits, to an amount not exceeding £2000, or 

 in any industry that the governor ma}' by proclamation declare to be a 

 rural industr^^ for any purpose incidental to or in aid of any such business, 

 pursuit or industry, including the erection of a dwelling house for the bor- 

 rower on any land occupied or used by him in connection with such business, 

 pursmt or industrs' ». As a matter of fact, however, the main objects for 

 which loans are granted are those named in the original Act. The maximum 

 limit of loans has been greatly increased. 



Agricultural hank methods. — Applications for loans must be made 

 on a prescribed form and contain full particulars of the objects, such as 

 clearing, fencing, stock, machinery,', etc., for which the advance is required. 



Each application must be accompanied by a fee of i per cent, of the 

 sum appHed for. Loans are granted for sums of £25 or any multiple thereof, 

 but at no time shall the advances to any one person exceed £2000. The 

 security' taken b}' the bank is a first mortgage over the property. A bill 

 of sale by way of collateral security is required over all stock and machin- 

 ery' purchased with the bank's funds. INIortgages are prepared free of 

 charge to the borrower, but the latter are required to pay the statutory 

 fees for registration of their securities, amounting to a few shilUngs. The 

 whole amount of an approved loan need not be paid at once, but progress 

 pa3'ments are made against improvements on the certificates of approved 

 neighbouring landholders. This last provision has sometimes been abused. 

 The minimum instalment of a loan payable at one time is £10. 



Relation of hank to the settler. — The contact of bank and borrower 

 begins with the occupation of the land, but crown lands being valued and 

 classified prior to selection, the bank is enabled to give an opinion quickly 

 before the settler selects the land. While the trustees are empowered to 

 fix advances on land, it is not obligatory on them to do so in ever}- case. 

 They may use their own discretion when the security is considered unsafe 

 either on account of the inferior quality of the land, inadequate area for 

 maintenance of a home, situational disadvantages, or, in the case of special 

 advances, low sale value or insufficient development. Needless to sa3% 



