THE BANKS AND FINANCE.

Taranaki Daily News, 2 May 1922, Page 3

THE BANKS AND FINANCE.

(To the Editor.) —“I am pleased to see your sub- , leader in the issue of the Daily News of April 26 regarding the present exl cessive bank rate of interest that has been charged for some time past. These institutions have taken advantage of the farmers and business people’s financial troubles, and instead of assisting them to make good, have been doing just the opposite, by expecting high' rates and making a huge profit while nearly all farmers and business concerns are making nothing, if not losing heavily, while the banks appear to be making from 15 to 20 per cent., as well as severely writing down their assets at the same time, and besides giving bonuses to their staff, so what rates of profit have they actually made? And this at a time when they should assist and lower the rate of interest in order to assist, as mortgagees and other business people have done. 1 also know that some of out leading banks have not only raised the rate of interest, but have actually grabbed clients’ milk cheques without any notice, and who paid the money into their accounts, thinking that they* could draw against same, as has always been the case. The public should now combine and deal fairly but firmly with these avaricious institutions, and should also see that an Act is passed prohibiting these and other kindred institutions from lending money on demand, as this is largely the cause of financial panics, while at the same time these institutions are using about 14 millions of public money on which they pay no interest at all and pay only a very low rate on fixed deposit. It may be known that these institutions will not take any money on demand and pay interest thereon, yet they expect their clients who accept on demand to be liable to be called up at any moment, as has been the case in many instances. Probably the best remedy to combat these institutions from harsh treatment in hard times would be an agricultural or State bank, supported by the Government and guaranteed on safe Tines,-so that the country could be developed without the danger of farmers’ accounts being called up at a moment’s notice. One of these institutions during the past dairy season would not allow the directors of a certain factory to pay out more than 6d per lb for butter fat, while they held security over the property and plant and a joint and several guarantee for a small overdraft that was owing, and while these directors were complaining bitterly of the position, they could not pay out more, in order that suppliers could pay their interest and rent. I hope now that the matter has been opened up that the public will take the matter up thoroughly and push it into definite shape, and thus stabilise finance, to some extent at any rate, and prevent such greedy institutions as the banks from doing what they like with the. public and the public money entrusted to their care, as you have pointed out that the public of New Zealand liberally allow the banks to trade in this country, and they should therefore give some consideration to their clients. Thanking you for this space and hoping that some real good will come out of the discussion recently at Hawera, and- your sub-leader on the sub- j i ject.—l am, etc., j j “SPECTATOR.” I j Stratford, April 29. (