THE HIGHER BANK RATE.

Shannon News, 31 May 1927, Page 3

THE HIGHER BANK RATE.

COUNTY COUNCIL OPINIONS. . DESIRE FOR AN AGRICULTURAL .' BANK. ! Advice was received from the Bank of New Zealand, at the annual meeting of the Horowhenua County Council on Wednesday, that the rate of interest on over-drafts had been increased by onehalf per cent, (raising it to 7 per cent.), a 3 from May 9th. This gave rise to a brief but piquant discussion. The>Chairman (Cr. G. A. Monk) stated that at a meeting of the executive of the. Counites Association, which he attended, the rise in the interest rate was referred to that body by two or three counties, and the association considered the matter. “But what could it do? That is the point,” the Chairman added., “We felt, as representatives of the counties, that we were not m a position to do anything. If the. banks’ action is going to help anything, it should help these who are out to promote a State bank; and it may be of some assistance to the people who desire an agricultural bank. The banks have found that their deposits have fallen several millions, while their advances have gone up several millions. There' are two ways' of putting thescrew on: one is by saying, ‘Yon cannot have any more money’; the other is to increase the interest on overdrafts. Many protests have been entered by local bodies; but I think that is just beating the air, and unless some other method—like breaking the ring of banks —is bi-ought about, we are entirely in the banks’ hands'. The only consolation is that it may help the agricultural banking scheme.” Cr. Ryder: *’ Possibly it is a good thing that it has come, for that reason. It is high time the banking ring in New Zealand was smashed. Why should a monopoly in this contry be left in. the hands of five or six banks? No'other bank can get in; and we need an agricultural bank. 1 The Chairman: You don’t suggest that the banking business should be ‘‘open slather ? ”

Cr. Ryder: I don’t say that that is right; but it should not be as it is today. The Chairman: It would not be long before you had bank failures. The banfts are fairly safe institutions today. . Cr. Jensen said he thought that the bank had had a very safe margin to work on —froni 4| to per cent. If they could not work on that, then they had better go out of office. He did not think that the question with the banks was one of the safety of the country. The Chairman: No, it is the safety of the banks. r

, Cr. Jensen: I think they are after the “hoot”; they are studying themselves., : ; v . ;

Cr. Cajiley-: The Government has a commission sitting to inquire as to buyers and. sellers.;! ; The Chairman: We are really run by commissions. ,

Cr. Catley: 1 . When, it conies to bankrate,'fixing,"tkeßommissions don’t seem to have any power. The Chairman: Has it ever struck you, gentlemen,- that the banks run the Government, and the Government does not run ,the banks?

Or. Ryder: The money runs the lot