AS OTHERS SEE US.

Franklin Times, Volume 9, Issue 778, 24 October 1922, Page 3

AS OTHERS SEE US.

THE RECORDS OF-TWO BANKS. The following article from the Sydney Bulletin of September 28th is an interesting commentary on the claims of .those who advocate a State bank for this Dominion : The Commonwealth Bank announced last week that - its profits had dropped from £403.041 in the first half of 1920 to £208,93’ in the corresponding period of 1922. It ’s explained that thp London balance soared from £8,090 000 on N June 30, 1921, to £l9 325.000 on June 30, 1922, and that whereas this money used-to earn 3 and 4 per cent., the rate has gone down to 1 1 2 per cent. What pro : portion- of the £19.325',*000 represented unexpended loan funds, on which interest is payable to -the public creditor, and horn much the Government received, for the us'e of them—whether in short the country really profited by these transactions, is not disclosed. Ordinary deposits rose from £26,556.692 to £42,091,309 but the advances* item was almost stationary—it amounts to a mere £14.459,387. Which shows how little the is doing towards the development of the country compared with the Bank, of Maoriland, With vastly inferior resources that institution had £21.700,000 out on March 31st, all within the Dominion. It has been a rock of refuge in trying times to the Maoriland wool grower and dairy farmer and a tower of strength to industry* The Commonwealth Bank, on the ether hand, frowns on rural ’securities. It is easier for the average cocky to climb through the eye of a camel than to get an overdraft from the Commonwealth Bank.

“In other respects the Maoriland concern is far more serviceable 'to the citizens. For an outlay of £B7s— one-third of the then capital, the iovernment secured eon'qrol of the bank —it appoints a majority of the directors—and it has received bonus shares amuonting to £375,000. Deducting the interest payable on the Jaons issued to provide the capital, its annual dividend Dorn this source amounts to £BO,OOO In addition it draws substantial revenues from income and land taxes, neither of which imposts the Commonwealth Bank pays. It is frequently alleged in an indefinite way that Denison Miller has saved Australia millions (the precise amount is never styled) by his inexpensive methods of floating loans. This assertion being hurled at George .Fairbairn in the Senate, that person replied that the Commonwealth Bank charged the 1 Government the full rate of exchange whereas the private banks made a concession to their big clients. Whether this be so or not, it is certain that the “Commonwealth” has made fat profits by operating on the unexpended loan balances which prodigal Australian Treasurers hr,vh allowed to accumulate. Yet, considering its earnings from this source, its exemption from taxes its enormously greater assets and the difference in population between .the two countries . (Australia o J 2 millions Maoriland IV4 millions) its achievement is decidedly inferior to that of the Bank of Maoriland. During the same nine year's in which the “'Commonwealth” made a p:ofit of £3,792 - 726, not a penny of which went into the revenue. the M.L. institution paid the Government £1.516,000 in income tax, £528 Tad in dividends and and £126,700 in land tax —a total of £2.271 150, exclusive of the £375,000 in bonus shares. Certainly an impressive example to Australia. Wfien the next Covernmer.r. comes along (obviously nothing but vote catching can be expected from the present mgloriotas c;ov,d) .the Commonwealth Bank should be obliged to pay income- and land taxes the proceeds to go into the sinking; Sand in addition to be relieved of one-man control, the man being a law unto himself.