HIGHER BANK RATE.

Auckland Star, Volume LVIII, Issue 108, 10 May 1927, Page 4

HIGHER BANK RATE.

FARMERS VERY HARD HIT. BAD EFFECT ON BUSINESS. A STEADYING INFLUENCE. (By Telegraph.—Special to "Star.") CHRISTCHURCH, this day. "It is like swinging a dirty left at the farmers," was the expressive term used by a city business man this morning when asked for his opinions regarding the increase that has been made in the bank rate of interest. "The farmers," he added, "would be hit very hard as the result of the increase, which came at a time when they were least able to stand it. It was all very well for the banks to say that the increase was necessary to stabilise conditions, but. in his opinion, it was bound to have a ba.l effect on business, and might force a nunibei of people to the wall. The difficulties of farmers were serious enough as it was, and this increase would only accentuate the position." In spite of all that the banks might say to the contrary, he considered that the increase was not called for, but was made simply because the banks were out to make money. He believed that the increase would be reflected in etill lower prices for stock, and farmers were in the unfortunate position of not being able to share their burdens with the rest of the community. The increase would probably have a steadying influence on imports, and from that point of view might appear to be justified, but he considered that it could have been avoided. Another business man who was approached on the subject expressed the opinion that the increase would be temporary. He believed that it would restrict trading for a time, for the eimple reason that business firms would endeavour to reduce their overdrafts, and that, with an increase m the amount of deposits and a steadying influence on overdrafts the position would right itself fairly soon. But at the same time he thought it was a pitv that the rate had been increased at all. FINANCE MINISTER SORRY. "I WAS HOPING AGAINST HOPE." (By Telegraph.—Special to "Star.") FEILDING, Monday. Oms of the members of a deputation winch waited on the Hon. W. Downie btewart, Minister of Finance, said he W /!v ß °i7 that the visit to tQ e district of the Minister should coincide with the latest pronouncement regarding bank rates. The increase was a serious matter for the farming and the business community. The Minister agreed with what had been said about the unfortunate rise in the' bank rate. "I was hoping against nope, he said, "that it would not take place for some time. It went up in 1921 and I believe the banks have been trying to keep it off until the very last minute " He added that in view of the relation of deposits to advances, it was difficult to resist the conclusion that something had to be done to redress the balance. He had hoped it could have been postponed as it would intensify the position