BANKING.

Press, Volume LXIII, Issue 19056, 19 July 1927, Page 11

BANKING.

TO THE BDITOB OF THE PBZSS. Sir,—The hanks have been criticised in your columns and elsewhere over the recent increase in rates. One ot your correspondents has suggested tnat instead of increasing the rate on overdrafts, the banks should have aiscnnv. inated between various classes or m, counts I think he can never have naa the experience of being refused an aavance at a critical time. Surely it k better for all to bear a slight increase and so attract funds, rather than snui down on the few. It has also been suggested that the half per cent, increase will impose a crushing burden on tne struggling farmer. Ido not know what the overdraft of this class of farmer would average throughout the year, but taking it at £2OOO (which iraP'j 6B ., l ? 08 ,." session of more security than I thins one in desperate straits js likely to possess) the increase in interest would amount to £lO, if the higher rate lasts a year. Can it be said that an enforced economy of this amount in a household is going to mean ruin? Regarding the attitude of the banks towards the farming: community, I am a shareholder in three farmers' co-oper-ative associations, which all find themselves in serious difficulties as a result of an unduly liberal policy of financing their farmer shareholders. although this business was done largely in competition with the binlcs. t' l^. B ;*" ter have come, very generously T think, to their assistance. What would have been the portion of these associations and their shareholders had the bank? "discriminated" against them! It will be an ill day for this countrv if ev€r the banks are impelled to adopt a policy which will similarly weaken them. Instead of abuse. T consider the banks deserve gratitude for coming to the rescue with the reserves which thev have built un bv the exercise of prudence and good management, qualities which have been laekinsr in some sections of the community during the easv times of recent years. The hanks have provided onp of the few steady influences, and the profits thev have, earned are a very small insurance premium for the community to nay f° r protection no-ainst the state of affairs which mifht have obtained hut for their foresight and strength. Instead of abusinn- the hanks, it would be far botfpr.' T think, to face the real causes of the "resent depression, which are too well known to need mention. — Yours, etc., SAFETY FIRST.