The Feilding Star. THURSDAY, JUNE 24, 1886. Financial

Feilding Star, Volume VIII, Issue 5, 24 June 1886, Page 2

The Feilding Star. THURSDAY, JUNE 24, 1886. Financial

A telegram from Melbourni has informed us that a mutual rupture has occurred between the Associated banks of that city over the question of interest on deposits. The news thus conveyed is very meagre, but is pregnant with meaning. We may surmise from it that the banks have determined to offer higher rates of interest to depositors for long periods (six or twelve months) by open competition, and that lower rates will be charged on advances, whether by discounts or overdrafts. Or it may, mean th„t the banks find that they cannot afford to Eay the high rates of interest (about alf what they in their turn have keen changing the public) for the use of outside capital, Which have obtained during the past few years, or that their customer! have at last kicked against the usurous rates they have been charged for ordinary trade accommodation. Business men have been educated by __© banks into the knowledge that although they are an absolute necessity for the banks, yet the banks are not an absolute necessity for the business men. When the two work together they are of immense advantage to each other, j being a source of mutual support and profit, but when — as has been the case for some years — business men have to employ their capital and talents for — apparently — no other end than to increase and multiply the dividends of bank shareholders, the proper equilibrum is destroyed, and, consequently, their mutual usefulness put out of adjustment. As bank directors are keenly alive 'to their own interests they have probably discovered a new and more liberal policy must be adopted, which can only be successfully carried eut by each institution being free to work untrammelled by restrictive conditions. We are in favor

of opon competition, whether between bankers or bakers. Everybody knows that where compacts are made their whole object is to get the highest price for what the parties to the compacts have to sell, and give the lowest price for what they have to buy. Fair trade is impossible and the public — the buyers aud the sellers — have j to hear the burden ; the profits are j not for them. But when such compacts nr*» broken — or when the parties fall out— we omit to quote in full , the homely proverb on this subject — honest men, as represented by the public, get their own. Therefore, if the rupture, which is described as mutual, is permanent, great good will necessarily result to the public and | business men generally in Victoria. As the relationship between the banks doing business in that colony and New Zealand are of the closest, there can be little doubt that the " rupture" j will extend this far. Tho discovery of the Kimberley gold fields, and the advance iu the price of grain and wool have already been, perhaps, factors in cheapening money as well in creating a feeling of confidence in the near future, to which capitalists and commercial men have long been , strangers. [Since the above was written we have received intelligence flint the bnnV.s have raised the interest on d..-;--:-.sits ui:-- per cent.]