THE MONEY MARKET

Bay of Plenty Times, Volume LV, Issue 9515, 22 June 1927, Page 4

THE MONEY MARKET

<j> RE-DISCOUNTING OF BILLS. Tin! subject of the development of a bill market in Australia was dealt with ul some length by J. Newman Barker. at the annual meeting of the National Bank of Australasia, at which he presided. Mr Barker pointed out that among the matters discussed during the consultations which Sir Ernest Harvey (Controller of the Bank of EngZland )had had with the board of the Commonwealth Bank, was the advisability of introducing for use in case of need, the re-discounting of first-class bills of exchange, so a.dding to the profits of the central bank, and furnishing the trading banks with additional loanable funds for the service of trade and commerce. There was at present no local business of that description, and not a very large volume of suitable bills. Heavy stamp duties operated against the use of bills in Australia. In England the duly was only 1/- per cent. It would also be to the general economic good, said Mr Barker, if a greater portion of current trade book debts could be represented by bills of debtors payable at a fixed date, and available for advances from the banks. A further and distinct benefit would accrue if the banks were to increase the volume of bills by making some of their advances by taking and discounting a borrower’s bill instead of making him an advance by nay of overdraft. This would apply to loans required for short term or fixed periods, and would provide in the case of first-cla.ss merchant and other bills a very useful medium for re-dis-count at the central bank if and as required.