WELLINGTON NEWS

Hokitika Guardian, 23 October 1925, Page 4

WELLINGTON NEWS

BANKS AND LABOUR

(Special t-o “Guardif.n”.)

WELLINGTON, October ill

A State Hii 11k is one of the main planks of the Labour Party, hut just, what they actually propose in respect In hanking is not disclosed. The sus|iicioM is that the lenders do not know v. iiat they are talking; ahout and such of the candidates as have mentioned the matter have continued to the opinOne l.ahour candidate for Wellington delivered the following dissertation on banking: -‘There are six hanks in New Zealand with six sets ..S' directors. It looks as if they are in competition. They are not, they me in collusion." milling that as the a 111 a Iga mated hanks tney fixed the rate of interest on ovcrdralts, which was tij per cent no matter what the .security. Vet the hank rate in Engla nil

.ms 11 : 1 1 v tner cent. The Govern-Hu-lit was in league wilh the hanks and

was not working in the interests ol tne people. State hanks were the solution of the trouble which was a hat the l.ahour Party proposed. Here we see how a little knowledge is a dangerous thing. Apparently it is i cry wrong for the six hanks to have six sets of directors, yet they are amalgamated according to this authority. No one has over heard ol any hank amalgamation in this country since the Hank of New Zealand took over the Colonial Hank in JStto. The hanks are associated just as traders in commodities or services are associated lor their protection, and ills! as the woik-

i t's tire butiiilcd together in unions. !l seems to lie right for workers to form unions or associations hut quite

wrong for any one else to do so. Hut dl this is of minor importance. The ■rowiiing Tolly of this candidate was displayed when he compared the overIra IT rate in New Zealand with the hank rate in London. lie does not know the difference between the two and il is doubtful whether the average Haliour candidate possesses the intelligence to distinguish between the two or to appreciate the dilierenee between the securities involved. The hank rate is the rate charged liy the Hank of England for discounting the very finest of bills. To give an illustration of thi 1 security let its assume that a firm, like Kircaldic and Staines Ltd had accepted a hill at three months drawn by a prominent wholesale drapery business house in Loudon, say Robinson’s for CL.IiOO, and thal Robinsons disuiint tlie bill with the .Midland Hank. The bill would have the names of Kircaldic and Stains and Robinson, two solid guarantees that tlie bill would be met on due date. Supposing the .Midland Hank wishes to discount the bill, it would endorse the document, which would make three solid names on the bill and the Hank of England would discount it at ! per cent. There can be no better short-dated security in the world than >uch a bill. The overdraft rate here

is fit per cent, it is advanced against securities, and not all ol them of a liquid character. An overdraft can of course be called up at any time but there is no eertninity that it will he repaid on demand yet these new students of banking think that the overdraft rate in New Zealand should he no higher than the Hank rate. It is hard to know what to do with such amazing stupidity. ANOTHER WOOL .SI'RSTITT'TE.

>rcntilie research is not altogether an UMiinxed Mossing, tor icceiitlv svntheiic i mil hum 1 1 1 ies appear to have i nine to light, freely. Years ago synthetic indigo di'-plaeed the genuine product and there have Men unite a number of oilier substitutes' given in the world at various times. The bites! substitute will he unpleasant reading for wool produi or • for a new soli'iluie tor wool has boon siilin icntlv perlcetcd to warrant: a joint stock company being formed to work the patents. With An i>cr emit inle and '.M oer ecu! recovered wool, apparently wool recovered from rags are mixed up and specially treated and the resultant product is claimed to he as soft as wool and hard wearing and is onlv three-qitu rters the price of the cheapest wool. This appears to he the natural result of the process of “ education/’ which in Mime way is applied to the i, ia l! il I ait ore of arliliein! silk, now so very popular throughout the world and particularly in the United ."states. The new material has yet to lie produced on a eotiiinereial scale tail the materials required for its niaiiolaeture are so very cheap that if the material has anything like passable appearance il is hound to have a bigsale in Southern and Eastern Europe amongst the poorer peasantry. Ii is doubtful whether this new substitute will make any difference to the ennsiiinption of wool even if it is quite as

• 'nod as it i.-; represented in In. It will always lie list'd for prevention the lU'iri' ol wool rising unduly, mid v.nol will mi on selling to the last io■ i■: 111 so it is tie until in I product and cannot lie .substituted il wari'itli and hygiene enter in consideration.