BANKS & BANKING

Wairarapa Times-Age, 30 September 1943, Page 3

BANKS & BANKING

BASIS OF SOUND SYSTEM NATIONAL INTEREST STUDIED. ROTARY CLUB ADDRESS. “Banks and Banking” was the subject of an address given at today’s luncheon of the Masterton Rotary Club by Mr E. J. Heffer, of Masterton. It was possible that large numbers of the public were unaware of the facilities offered them by their local banks, said Mr Heffer. To enable such facilities to be provided, the New Zealand trading banks had agents throughout the world who would act for them without hesitation or without making any enquiry whatsoever, but simply upon their written request. These agents were the world's leading banks and financial institutions, and they had a thorough knowledge of the capital and standing of all of the Australasian trading banks, and, in fact, of all banks throughout the world. “It is also a pity that large numbers of the general public cannot yet urfderstand that the trading banks, commonly called the “financial interests,” are not a sinister group of enormously wealthy and hostile individuals seeking to keep the masses poor and the country in chains, but are, in fact, in so far as Australasia is concerned (and incidentally the entire world) groups of everyday citizens, shopkeepers, widows, farmers, artisans, etc.,” said Mr Heffer. "The number of shareholders comprising the trading banks of Australasia is approximately 80,000, and their average shareholding is £5OO, and in times of slump and when business is bad these small investors make their poorest profits. The average earnings of the shareholders’ funds of the combined trading banks is 3.15 per cent. An unbroken run of prosperous conditions, with no slumps intervening, would have the effect of increasing their rate of profit. These profits could also be increased considerably if the banks considered profit making alone, but their policy has always been to study the national interest, realising that only a prosperous, developed and strong nation can produce a sound and enduring banking system, such as the systems operating in the British Empire today. I doubt if there is any other group of investors which has built up over the last few hundred years the institutions which have played such a part in developing the nation’s assets or offered such facilities to all classes of the public at such a small, not to say nominal cost. The cheque system alone, which is taken for granted, is an absolute necessity if business is to function today. International commerce would also die and would never in the first place have come into existence without a banking system in which all countries had implicit confidence,”