BANKING POLICY.

Hokitika Guardian, 2 July 1921, Page 1

BANKING POLICY.

COMMENTS BY MR HAROLD BEAUCHAMP. AUCKLAND, June 28. Some criticisms of bank policy were referred to Mr Harold Beauchamp, chairman of directors of the Bank of Now Zealand, who, in his comments, gave some interesting information as to the present difficult financial position. Speaking of deposits placed with public companies and trading concerns, Mr Beauchamp said it was at one time a common practice for customers of banks to arrange for overdraft limits, and as soon as that was done, to commence to accept deposits at rates of interest substantially lower than any bank could afford to charge. It was good business on the part of the borrowers, but bad business for the hankers, who were practically underwriting the obligations of' their customers without making any charge whatever. W ith the commencement of the present period of financial stringency, the hanks could do little more than assist in the carrying on of tlie industries of the country, and had no funds available for the payment of deposits. In the circumstances lie could scarcely see why customers should complain of their inability to get I'roin the banks the money they repined for the discharge of their liabilities in respect to deposits. They took this money with their eyes open, and they had no one to blame except themselves for the consequences that had attended such a policy. 'T know there has been a good deni of criticism,” continued Mi Beauchamp, “in respect to the rate now charged by the banks for overdraft accommodation. In that connexion I would point out that during the whole |»eriod of the war. and for sonic time afterwards, money was cheaper in this country than in any other country in the world, and today the rate is no higher than that minor in London, America, and other parts~of the world. Recently the Bank of New Zealand paid 71 per cent _ for temporary accommodation in New York t 0 other hankers, while the Bank of England rate was 7 per cent, reduced recently to (s|, and later to 0 per cent. At the same time, some of the larges! and most powerful companies in Oroat Britain have been issuing gilt-edged debentures at rates varying from 71 to 10 per cent, fn this Dominion up to the present the highos rate offered by any company for debentures or bonds has been 8 per cent. AH things considered, i have no hesitation in affirming that the people of this country have no*grounds whatever for complaining about the rates ruling for. money.”