HIGHER BANK RATE.

Auckland Star, Volume LVIII, Issue 211, 7 September 1927, Page 11

HIGHER BANK RATE.

POWER BOARD INDIGNANT.

CHANGE OF BANKERS MOOTED.

(By Telegraph.—Own Correspondent.) TE AROHA, Tuesday. The Thames Valley Power Board today resolved to protest to the Minister of Finance "against the action of the Bank of New Zealand in increasing the rate of interest to 7 per cent on the hypothecation of debentures, and also to the calling up of the principal advanced, and that a copy of the protest be forwarded to the Bank of New Zealand." The board also set up a special committee to report on the advisability of "lacing the board's business with another bank. The resolutions were passed on the recommendation of the finance committee, following a demand from the Bank of New Zealand for payment of the amount of overdraft on the loan fund account, namely, £32,224 13/1. It was stated by the manager, Mr. R. Sprague. that early this year the board entered into an agreement with the bank to advance £40,000, at 6J per cent, against moneys receivable from the A.M.P. Society at the rate of £5000 a month. The agreement had been drawn up by the bank's solicitors and duly completed. Since that time, however, the interest rate had been raised to 7 per cent. The board had refused to pay the increased rate, on the ground that its agreement had been violated. The bank, however, owin«r to an agreement with the associated banks, refused to allow the interest rate to stand at 6§ per cent, and now demanded payment of interest at the increased rate. Mr. Flatt said he considered a change •>f bank wonld be an effective method of s«Twes!»tti«r disapproval. Mr Pollen said it wae a strong argument for a Stat* hank.