HARDENING OF CREDIT

Press, Volume LXXII, Issue 21941, 16 November 1936, Page 13

HARDENING OF CREDIT

GENERAL TENDENCY IN AUSTRALIA

REDUCED LOAN TO STATE PREMIERS

[THE PRESS Special Service. 1 AUCKLAND, November 15. “As far as I could ascertain the general tendency in Australian banking circles appears to be toward a hardening of credit, which, if carried too far, may result in slowing down public works and in checking the momentum of general recovery which set in in Australia long before it did in New Zealand,” said Mr H. J. Kelliher, a director of the Bank of New Zealand, who has returned from a business visit to Australia. “The action of the Commonwealth Bank Board in reducing the request made by the Loan Council for a loan of £10,000,000 to £7,500,000 is arousing keen resentment, especially among the Premiers of the various states as national works will have ,to be restricted accordingly. The policy of the Australian trading banks during the last year or two appears to have been to discourage rather than to attract bank deposits, with the result there is a shortage [of liquid funds and a general hardening of interest rates.” I The modern trend of affairs was ! recognised by one bank by the introduction of a woman’s bank, consisting of a department specially designed for the use of women clients. It included private consultation rooms and a comfortable lounge, while advice and. information on banking investments and similar subjects was available from experienced women officers. The innovation was greatly appreciated and was said to have led to much increased business.

On the surface general conditions appeared to be buoyant, and it was reported that business was somewhat ahead of last year. This applied to some trades more than others, but was specially pronounced in the building and kindred industries. Mr Kelliher said he had not found any apprehension about the New Zealand Government’s policy, although naturally its actions were arousing considerable interest and were being closely watched, por bad he seen signs of any large flow of capital from New Zealand for investment in Australia. There was some but from his interviews with Australian banking interests he could say it had not reached large proportions.