COST OF EXCHANGE.

Auckland Star, Volume LV, Issue 248, 18 October 1924, Page 49 (Supplement)

COST OF EXCHANGE.

FUNDS IX LONDON. STATEMENT BY BANKER. (By Telegraph.—Press Association.) » WELLINGTON, Friday. Doubts having been cast on a statement made by the chairman of the Associated Banks that they are, holding an excessive accumulation of funds in London, Mr. William Watson, actingchairman of the Bank of New Zealand, made the following announcement regarding that feature of the exchange position. "As far as the Bank of New Zealand is concerned, at present the resources of the bank in London amount to £9,500,000. This is at least £5,000,000 more than is required for the conduct of the bank's business, and at times during the present year the surplus haa been some millions in excess of the present Sgures. "On this large amount of money there is earned only one-half of the interest which could be obtained if the funds could be transferred to the Dominion. It should, therefore, be obvious that it would be in the interests of the bank to have the excess of its resources in London made available for its business in New Zealand. As it is, its inability to transfer these surplus funds to NewZealand obliged the bank to restrict advances in the Dominion. "If the bank considered only its own interests, it would not purchase any bills on London until, by sales of exchange, its funds had been reduced to a satisfactory figure. Such a drastic measure would, however, be disastrous to exporters and producers. Therefore it is better, for the welfare of the Dominion as a whole, that all bills offering should be purchased, the bank charging an exchange rate to enable it to meet the exceptional position now existing."