§ 4. Sir JOHN SPEARasked the President of the Board of Agriculture if he is aware that his scheme of assisting small holders financially with loans through joint stock banks is unworkable because the condition that such loans are to be repayable on demand would make it impossible for the small holder to use the money in raising crops because of the liability of its recall before the crops are matured; and will he endeavour to arrange that the loans shall be for six months certain and mutually renewable?
§ The PRESIDENT of the BOARD of AGRICULTURE (Mr. Runciman)I would remind the hon. Member that, although the loans will be nominally repayable on demand, the banks have expressly authorised the statement that they will in general practice be ready to lend for twelve months, and the loans will then be subject to repayment, renewal or reduction.
§ Sir J. SPEARDo not the conditions stipulate that the loan is to be repayable on demand, and does the right hon. Gentleman really think that these conditions will be of any service to small holders in raising stock or crops?
§ Mr. RUNCIMANIf the hon. Gentleman followed my answer clearly he would see that the banks expressly authorise the statement that they would, as a general practice, be ready to lend for twelve months.
§ Sir J. SPEARWould it not be in the hands of the joint stock banks to call for the repayment of the money on demand? And is it not the case that since the joint stock banks would incur no liability as the money would be guaranteed by the cooperative societies, is it unreasonable that the small holders should have security for at least six months?
§ Mr. HARRY LAWSONWill there not be a legal liability on the borrowers to redeem on demand whatever the assurance of the banks may be?
§ Sir H. CARLILEMay I ask the right, hon. Gentleman whether he is aware that a loan on these conditions for twelve months is worse than useless?
§ Mr. RUNCIMANThat is a matter of opinion. I am informed by those with whom I have been in conference—many of them small holders—that most of these 7 loans will be of the greatest assistance. With regard to the point put by the hon. Member (Mr. Harry Lawson) I would point out that whatever may be the legal conditions entered into to provide for ordinary banking conditions the banks are prepared to give to the co-operative societies that which they sometimes give to private borrowers, an undertaking that they will not ask for repayment of the loan although it may be a loan formally repayable on demand until twelve months.
§ Mr. WEDGWOODWill the Government undertake proposals for industrial enterprise on the same footing.
§ Mr. RUNCIMANMy Department deals with agriculture.