The Sun MONDAY, JULY 9, 1928. PHARAOHS HEART SOFTENS

Sun (Auckland), Volume II, Issue 401, 9 July 1928, Page 8

The Sun MONDAY, JULY 9, 1928. PHARAOHS HEART SOFTENS

k LOWER bank rate as from to-day should help business men and industrialists toward a more cheerful tolerance of temporary commercial depression, unemployment, inferior politics, a moist winter, and rheumatism. The administrators of the Associated Banks, whose consistent financial success in all circumstances has invited the prospect of new competition, have at last agreed with statesmen and economists to see the silver lining in the dark clouds, to realise that the country has turned the corner, to believe that (with the approach of the general elections) the outlook is bright and marked with the promise of good things and better times. It took much adversity to soften Pharaoh’s heart, and the administrative bankers have been true to their profitable tradition. But those among the people who are prone to overdrafts as the sparks fly upward, will not be disposed to look askance at a welcome concession, or to upbraid the donors for laggard generosity. The proof of the bankers’ optimism is too vital and valuable to be sneered at, and then it must not be forgotten, of course, that the leading experts in banking have assured a grumbling community that they alone know what is best for a harassed country. An old theatrical saying aptly explains everything: “Leave it to George; he’ll fix it!” Though the concession in respect of a reduced charge for overdrafts and discounts is appreciable, and will do much for improvement in trade and industry, it may be noted that whatever the banks give with one hand they will take back with the other, so that, in the final balance, their high dividends, shall remain as the laws of the Medes and the Persians. Interest rates on deposits have been adjusted on a lower scale, though only, it is fair to emphasise, in inspect of fixed deposits for periods above six months. In the general turnover, however, the Associated Banks will not give too much money away. Their fortunate shareholders need not lose any sleep over the adjustments. Since is has become the fashion in religion and politics to compare New Zealand morals and its demoralising unemployment with conditions in other countries, the difference in the bank rates may also be cited. In Great Britain the bank rate is only 4J per cent., as changed from 5 per cent, on April 21, 1927. Of course, circumstances are very different, and different to such an extent as to make comparison misleading and futile, but the same can be said of comparative morals and unemployment. Political and ecclesiastical ministers should remember that fact when they set New Zealand against other'countries. On the principle that it is wisdom to be grateful even for small mercies, everybody should applaud the decision of the Associated Banks to make money a little easier. But their belated concession alone will not restore normal prosperity. It will promote a revival of better times all round, but unemployment and slack industry will not disappear until the Government reduces the enormous burden of taxation. The Minister of Finance, who was among the first to urge the banks to reduce their rates, should now follow their lead and make the best possible contribution to prosperity—a reduction in taxation by not less than £1,000,000.