Banking Lubricatesit does not Govern. The function of banking in the economic machine is to act as Lubricant, not as Governor. The Banking system has an intake and an outlet. The intake absorbs the money of the cofrimunity not immediately required for use by its owners, offering complete security and interest rates fixed by the law of supply and demand. The outlet carries the flow of money to those points where it is needed, facilitating the operation of the machinery of production. The farmer, the manufacturer and the importer who desire to produce goods for the future market, either by growing them, manufacturing them, or by purchasing them overseas, would be greatly inconvenienced if they were unabie to borrow for their temporary needs. Each would have to be equipped with much more capital than is now the case, and for a considerable portion of the year much of that extra capital would lie idle. By accepting funds from persons who do not immediately require them and distributing those funds among persons ivho do require them, the banking system facilitates production and business. by ihe Associated Banks of New Zealand.
F TH SM T ■/ M ST TA and 43 Phones
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Bibliographic details
Ashburton Guardian, Volume 55, Issue 300, 2 October 1935, Page 7
Word Count
199Page 7 Advertisements Column 2 Ashburton Guardian, Volume 55, Issue 300, 2 October 1935, Page 7
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