OVERDRAFT INTEREST

Hokitika Guardian, 11 August 1931, Page 2

OVERDRAFT INTEREST

REDUCED BY SYDNEY BANKS. -i “The recent reduction of rates for fixed deposits should be a material factor iu assisting .the. Government in ; the conversion loan scheme,” said Sir Mark ■Sheldon, chairman of directors, at the annual meeting of the Australian Bank of Commerce Ltd., a few days ago.

“The reduction of 1 per cent.’’ he said, “should not only assist the Government but should also lend a much-needed aiil to commerce, and industry, as it will enable the oanks to adjust their advance rates On a more favourable basis to the borrower. We feel that the first relief should be extended to the primary producers, and, indeed, in my it will be advisaole to reduce the rates by more than 1 per cent, in the more necessitous cases.”

THE DECLINE IN PRICES. The decline in the prices realised for Australia's exportaole products, said Sir Mark Sheldon, had been accentuatid during the past twelve months, until now world’s prices were ruling at such low levels that to enable Australia to rehabilitate itself there must-be drastic reductions in the cost of all Government expenditure. Every thinking person must recognise the importance of getting primary producers of all class-» on to a footing which would enable them to work profitably, as it was from the results of primary produce that Australia must eventually get relief, Secondary industries in Australia found it, at present, utterly impossible to export at a profit, and their very existence was dependent upon the survival and re-estab-Ijshment upon a profitable basis of the primary industries. It was hoped, Sir 'Mark continued, that one of the lessons that Australia would learn from the crucial times she was passing through was the absolute necessity of having an independent reserve hank functioning only and solely a« a reserve bank and free from political control. A bank of that nature would'inspire confidence in those outside ■Australia having financial dealing with the Commonwealth., ...

“WILD TALK OF CONTROL.” * ‘‘ln certiifi quarters,” lie continued, ,l \ye have heard some wild talk of control and domination of public affairs by bankers. In practice nothing could be further from the truth. 'lt does not require a very deep examination of the subject to know that banks are in j a very sensitive position and are entirely dependent upon the support and confidence of the public.” It could not be pointed out top often, he said, that when Governments took too great a proportion of the people’s income, stagnation, unemployment, and high money rates resulted. The Governments of Australia took an astonishingly high proportion of the income of the individual, and on this taxation had built lip a Government structure which was draining the financial life of the country. Available credit was absorbed by Governments, and private enterprise was thus stifled. Australia was paying now a heavy toll for State-owned enterprises, mope particularly the railways. The accumulation of losses on. these ventures heavy additional taxation, which in turn, diverted capital from private enterprise, and thus added to the number of the unemployed.