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Taranaki Daily News, 5 March 1921, Page 9

It must be many years since the New i Zealand bank rate for advances stood . at 7 per cent., the figure to which it was i raised on Thursday last, says t'he Auck--1 ifffnd Star. “The increase is a sign of the i times, and was not unexpected. The i bank returns for the December quarter i of 1920 showed how the financial curJ rent was running. There xvas an in- ' crease of fourteen millions in the advances over the total for the corresponding quarter of 1919, and whereas then ■ the excess of deposits over advances was thirteen and a half millions, by the end ; of 1920 it had dropped to les%. than two ' millions. The huge volume of imports in the last six months of 1920 was largely , responsible for this increase in advances. Importers were receiving far more than they expected, and the 'banks had to carry a great deal of the load. Since December the situation has been further strained by external and internal influences—the depression abroad, the heavy demands for income tax, and the necessity for subscribing to the Government’s loan. The payment of income tax, which nominally amounts to as much as 7s 6d in the pound on higher incomes but in reality is more in many cases, is hitting some concerns hard, and the banks fire unable to be as aeeommodat--4Jjiffj&B. J U3UaIJ f