THE BANKING LAWS.

Manawatu Herald, Volume XXXI, Issue 457, 6 May 1909, Page 2

THE BANKING LAWS.

It will be interesting to those who have to do business with our commercial institutions to notice from Sir Joseph Ward’s Invercargill speech that there is a prospect of some amendment to our banking laws being introduced. It may come as a surprise to many that the law as at present existing provides tor a monopoly in banking to those institutions already doing business here, and prevents either the formation of new companies, or the coming of other companies already existing and doing business in other countries. The result of this has been to throw what is truely legitimate banking business into the hands of the large financial institutions existing in New Zealand, but which were not constituted for that particular form of business, and they have become huge money lending institutions, to whom high rates of interest have had to be paid for slight conveniences, while their alleged reputation for foreclosure is a menace to those who are forced to come within their reach. Those in need of accommodation have had no choice, for the banks, as a contemporary points out, have been sorely undercapitalised and have had resource to au unjustifible extent upon the deposits of customers with the result that when a slump came in our wool industry last year, and depositors had to draw largely upon their credits, the banks found themselves forced to call in overdrafts and press for the release of mortgages. If we had had a larger number of banking institutions, there would have been less pressure on customers, and more capital in the Dominion to meet the needs of those seeking necessary accommodation. In every town or district having only one bank branch, the business section of the community is forced to deal with that branch exclusively, under whatever conditions it may be pleased to impose, or seek relief from the merciless money-lender with high rates of interest and unremitting pressure for the pound of flesh. With the advent of fur-ther-respectable banking institutions seeking to do a legitimate banking business, much unnecessary pressure might be avoided, and better conveniences secured.