BANK CONTROVERSY.

Dominion, Volume 7, Issue 1959, 16 January 1914, Page 8

BANK CONTROVERSY.

; SOME PLAIN SPEAKING.

OPINIONS OF A BUSINESS MAN

. "Cheap and nasty is an old! saying that can bo applied to money as to anything else," was the remark of a weiikntfwh business nian' in .the city yesterday when referring to : ,the corresporid- , enco B . has , .appeared / in connection with Tiank', interest and charges. Ho was dealing'more particularly with a letter appearing in yesterday's issue over the signature of "Tradesman.". ■ Touching first onthd question of in- . teresfc on "froe"-balances, . he asked: "Would 'TradfcsnlSn' caroto-keep other people's money in his pockot,' with tho prospect; of haying to; hand it over at

liny,.moment) and pay for. the privilege of passing it through his fingers for an f uncertain period? On tho.law of aversoroothing is mado by the .banks on such balances, but people ■who.'writ'o' without"kiiowledgo and merely to ticklo tho; ears of tho. groundlings do not take cognisance •of many facts that tend to make ( the return a very small olio. Your correspondent makes 3io .allowance for /the lorgo sums to be liekl in reserve —entirely unproductive— to proVido for sudden withdrawals. Nor does he take any .'account of tho risk iind/trpuble .involved in times of stress, nnct-panic w a rush for moneys held at call, a contingency that surely entitles ,tho banker, 'who knows not the day. nor the hour when'lie may havo to shell out, to- all-lie can'fnirly mako oub of such stock-in-trade. ■ ."Deference has been mado to the yearly charge of 103. for current accounts," continued the business man. "Does it-occur to.,your correspondent that- tho open account system is a very great convenience to the public, and that to those who make use of their banking'accounts, as a channel through which to .pass all their business operations, tho bank/stands in the , relationship of a bookkeeper? In such cases it Hias been held in bankruptcy, proceedings .that tho bank passbook takes the jpiace of ordinary books of account. That surely is of considerable importance nnd protection to customers, to say nothing of the free simply of labour, passbooks and cheque books., Besides," a hank has tp.be most careful in guarding "the honour and credit of its customer's, some of whom do not hesitate to. take

of mistakes that cannot bo avoided "in the best regulated' iiistitu- - 'tions, and demand and,, 'enforce- by. re-coureo-to 'the law courts claims: for compensation,'which (liowey.or absurd)'appeal to,, sympathetic, juries ' ■ •' , "Your correspondent has a good deal to say-aboiit cheap-niqiie-y. I'can say unhesitatinglv, • after long_ experience, that- the facility for obtaining this commodity at low rates is by no means an unmixed '■ blessing. Cheap money has over and over-again led to unhealthy isaecialation,.'. extravagance, and _ ruin. .The industrial w-prld is often in the liealthiest' condition.y-wTi'en the banker 1 in his wisdom, not for any extra profit, hut to exorcise- a, steadying influence, ,' tightens his hand and firms his grasp by putting up tho value of what ho has to give. It fs .only 'financiers' of a certain type that we have seen, in public, life- who boast of having made money cheap. Such claptrap 'goes down' with flic crowd. I see Sir Joseph Ward has ngain been harpine on that, favourite topic of his on the "West Coast. Cheap and nasty is an old Baying that'can be applied to money as to anything else."