INTEREST RATES.

Auckland Star, Volume LXII, Issue 151, 29 June 1931, Page 9

INTEREST RATES.

VIEWPOINT OF BANKS. "GOVERNMENT'S MOVE NEXT." COMPETITION FROM OUTSIDE. (By Telegraph!—-Special to " Star.") WELLINGTON, this day. "The next move for reduction of interest rates rests with the Government," stated Mr. J. T. Grose, general manager of "the National Bank of New Zealand, to : day. "The representatives of the banks recently conferred with the Prime Minister at hie request, and informed him of the position," said Mr. Grose. "If the Government will. reduce the. rates of interest which 'it is '"offering 1 for Government securities, the banks will be able to take action. . The present rates are made necessary by outside competition. When the Government moved to increase interest rates four years ago the banks protested, but had to follow suit. . And while it may be true that over a year ago/ when the decision was made to raise the rate for' the sale of securities over the counter, this step for higher rates was made necessary because of the r. fact that money was leaving the country for Australian investment, in the past twelve months money lias been coming from Australia for investment in the Dominion.", . TKe banks were forced to meet.competition,' stated Mr..Grose, and the fact that 'the" Government issued securities at higher rates, that the Post Office Savings Banks paid interest on large deposits ,aa well as small ones, and that the- Public Trustee paid interest for mrineys, conspired' to make the banks offeriliigfier rates to investors, and therefore to .force'them ty> mark up their lending charges. . . _