THE MONEY MARKET

Manawatu Herald, Volume XLIV, Issue 2425, 6 May 1922, Page 2

THE MONEY MARKET

DOMINION CONDITIONS.

As the result of inquiries made at the end of last week by a representative among local business men, the Christchurch “S,tar” says “The existing bank rate in New as against the Bank of England rate' of 4 per cent, has created a strong feeling that a reduction is due, and . that it will not be long delayed. The effect of a high bank rate in restricting trade was emphasised by a business man, who added that the main grievance against the banks apart from the high rate, was that they would not hold firms up and put a short) limit to their advances. Many traders,who were compelled to sell at a loss had a further grievance, that retailers did not pass on the whole of their savings or purchases, so that the purchasing public did not buy as freely as might be expected. Trade recovery had been slower on that account, and many businesses that ought to have been able to work off their liability- to the banks bad not yet been able to do so.

"Another complaint,” the speaker \ continued, “is that importers who ' had huge quantities of goods landed on to them in a hurry could not get accommodation from the banks, and were compelled to incur very kigh storage or demurrage charges because they could not lift the goods. Now, when we are getting back to better conditions, traders have still been handicapped by a very high rate of interest, 1 and blame for this is placed as much' on the Government as the banks, because it con’d not very well have been expected that the banks would reduce their rate, while the Government was fixing the mortgage rate at 61 per cent.”

Another man asserted that the English bank rate had nothing to do with the rate in New Zealand. He was inclined to take the side of the local bank in the matter. The demand for money in New Zealand was .still strong, but he thought the position had improved lately, and interest reduction would have to be considered. tJ