BANKER ON OVERDRAFTS.

Taranaki Daily News, 20 July 1921, Page 7

BANKER ON OVERDRAFTS.

CASH, NOT INTEREST, THE REAL . DIFFICULTY. A Wellington banker who was approached for information as to the proposed increase from GA to 7 per cent, on Wellington’s big overdraft ( £380,000) on August 1, said that for some time past private overdrafts had been subject to 7 per cent, interest, • but in the case of muriicipalities some had to pay it as from July 1, and others would pay that rate as from August 1. There was a certain procedure to go' through. The bank issued the usual notification of its intention to raise the rate by a certain date, whereupon the local body concerned had to apply for the consent of tht‘ Minister to pay that rate. Supposing the Minister did not con-, sent? "He is not likely to do that,” said the. banker. “The position is that the municipality is lucky to be able to get the money at all. Interest >is not the real trouble at the present time. The diffi- ■ eulty is to get the money at all.” 1 Our informant believed that the peak of the stringency had passed in England, and that we were now experiencing its reflection here. It was like a ! person with typhoid. The crisis was passed, but they were still very sick, and would be a long time recovering. Traders would find great difficulty in raising money for some little time to come, but in the' natural order of things the depression would lift as readjustments were mase in the industrial world.