THE BANK RATE

Hokitika Guardian, 14 February 1930, Page 2

THE BANK RATE

NEW PLYMOUTH, Feb. 12

‘’This is a bit of a staggerer,” exclaimed the chairman of the Egmont County Council when a letter was received. advising that the bank interest rate on overdraft had been raised from per cent to 7 per cent, Considerable comment was made by the meeting, and it was decided to write to the Minister of Finance stating that tile council could see no justification for the increase, and protesting against it. The banks were making g.od dividends for their shareholders and were simply “rooking” the council, continued the chairman, who could see no reason justifying) the increase. To increase the rate at present was, he considered, entirely unfair to local bodies. He believed that the money comld be obtained from other sources at less than 7 per cent.

A protest should certainly he entered declared Councillor Toslaud. If no protests were entered “they” would think the council and kink clients would sit down and take anything. The matter should be considered by Cabinet. If the banks charged 7 per cent upon gilt edged securities they would charge eight per cent upon other securities.

The banks were having a hard struggle to make ends meet, Mr G. Gibson said. He had been told by his banker.

The chairman: Nonsense. They are making plenty of money.

Mr Gibson: Did you say I believed it?

The chairman: The bank rate in England is down to 4=) per cent, and yet we have to pay seven.