BANK INTEREST AND CHARGES.

Dominion, Volume 7, Issue 1958, 15 January 1914, Page 6

BANK INTEREST AND CHARGES.

■ Sir,—Mr. .Harold Beauchamp finesses the chief. points of my letter to you. "Farmer" complained that money was cheaper in Sydney than in New Zealand, and thai banks wore charging too high rates for overdrafts. I, [lointed out t'nat money would soon bs cheaper in New Zealand if it were cheaper in Sydney, as money, like any other commodity, always went where it could get most. Mr. Beauchamp elaborates and excuses, but does not explain or rebut the charges mad* against the Hanks. I know of tradesmen who have secured overdrafts and the banks- interest i-s from 7 to 8 per cent. And" know of tradesmen, in substantial positions whoss advances guaranteed up to £400 hav« been compelled, through bank pressure, to work upon £2GO_ less and-cannot obtained mv the limit of their guarantee. This is not a solitary citation. Tho banks chErfte 10s. per annum for keeping accounts and pay no interest on free deposits' or cash credit balances. They pay < from 12J per cent to i!2J per cent, dividends and ■charge T and 8 per cent, to traders for overdrafts. Most of the dividends go item tho pockets.of tradesmen and consumers here in New Zealand to the foreign capitalist and the country is the poorer. ' These, points Mr. Beauchamp has not replied to. . Mr. Beauchamp has nothing to say about the "solidarity of tho banks" in combining to keep up rates on- those who need money to develop trade, and the industries ot the country; and bo says nothing about the bank's being-in that way a secondary or contributing cause to the dearnew of living in the Dominion. Banks have 12J millions sterling of free, money and 10J millions for which they pay 3, 3i, and 4 por cent., and for tho whole of tho 22J millions they chargo <3, 7,, and 8 per cent, j and with discounts and other charges aro able to pay 12J, 15, 20, and 22{ par cent, dividends. Anyone with half an oyo can see how tho poor farmer and the poorer tradesmen aro being sweated by the banking combine to pay high dividends to foreign shareholders. Mr. Beauchamp has nothing to say about these points: and he does not say why tho- banks should be allowed to use 12} millions of credit balances or frct« deposits and pay nothing to the owners ihcrr-of. He may say that the owners cannot help themselves, but if they shifted their accounts with their froo deposits to a Government bank the State would be able to pay something for such ■ free deposits and lower overdraft rates to farmers and tradesmen as wall, because tho State would be content, _as with other of its monetary enterprise, with .5 per rent, dividends and the- 7.}, 10, 15, and 17-J .pel' cent, extra, dividends which now go to foreign capitalists, would be saved to the traders and far-: mors using the Government bank. The ■Massey Government is pledged to re» j form .'"'-Let it start here. —I am, etc,J j &&■s&■,* ■ TRADESMAN. i