INTEREST ON OVERDRAFTS.

Dominion, Volume 7, Issue 1956, 13 January 1914, Page 9

INTEREST ON OVERDRAFTS.

Sir— I notice _ that "A Former" is diverting' attention to the rise of the bank- rates of interest charged for overdrafts and contrasts the rates of interest ruling in Sydney. "A Farmer" complains, and complains justly, at the demands of the banking institutions of New Zealand; and considers it is high time tlio Government took a hand in regulating, if not controlling, bank rates. I'or what purpose do the people guarantee' the Baiik of Now Zealand if tho officers of that bank are in consort with nther banks in keeninc: rates Up upon the poor farmer and the poor tradesman? When mone.v is offering at ■U and 4J per rent. 011 flat, m'nrtgnge in sums up to £23,000 in Sydney, it fa

unly a matter of a few months when biich rates will bo ruling in Now Zenland, n3 supply invariably follows t ho demand. However, "A h'nrmor" sn.vs banks arc charging G por cent, on overdrafts to the former. Hut that is nothing to tlio poor tradesman, who pay* 8 por cent, on guaranteed accounts. Then tho banks pay 1"1, 10, !|D| - :l | l ] and 25 por cent, dividends. Thin could not bo done unless tho banks wore in a "ring" or "combine" to keep up rates and virtually lleece tho poor farmer and poorer tradesmen. The fact that ninuey is dear and that banks are combining to keep up rates to sweat this country, for tho sake of foreign capitalists, makes living dearer than it, ought to he. If the tradesman ooiild get his money chcapor ho would not require to charge so large a profit to tho consumer. Out) of the high profits charged to the consumer by tho tradesman the bank can only got its prolit and pay its big dividends. Jf tho Government woro to pass a '.nil regulating the dividends ol the Dank of i\<v> Zealand and all tho other banks trading, in this CQiintiy, rendering it illegal for,any bank to pnj moro than 5 per cent, to its shareholders, the farmers and fiho trade! s would soon find money cheap enough. Cheap money is needed now, and tlio banks, by the solidarity of their combination. to uso a plirnao that has nnd recently a general currency m another connection, are preventing its coming to New Zealand.—l am, Mo., tradesman.