RESTRICTION OF CREDIT

Press, Volume XCII, Issue 27750, 30 August 1955, Page 12

RESTRICTION OF CREDIT

FARMERS’ COMPLAINTS HELD UNJUSTIFIED

TRADING BANK POLICY OUTLINED

(New Zealand Press Association) WELLINGTON, August 29. ' The trading banks had no intention of adopting a harsh or unreasonable attitude to the normal and seasonal requirements, of their farming customers, as Appeared to be suggested in some quarters, said Mr H. W. Whyte, chairman of the Associated Banks today. "Numerous complaints have been voiced recently by farmers—chiefly dairy farmers—about the administration by the trading banks of the Government and Reserve Bank policy of tighter credit control,” Mr Whyte said. "The trading banks consider that these complaints are unjustified. "It is interesting to note the recent trend in trading bank advances to dairy farmers. At the end of June, 1953, this total was £9,020,000. Up to the end of June, 1954, this had increased by no less than £4,790.000 to a total of £13,810,000. During the last year, to the end of June, 1955, a further increase of £443,000 was recorded, making the total at the end of June last £14,253,000,” he said. "It is also interesting to note that the increase during the quarter from March to June, ,1955, was £656,000 — that is the increase was £213,000 greater than the total increase for the year. During that same quarterly period, a decrease of £5,266,000 was recorded under all other headings of trading bank advances. These figures indicate that dairy farmers as a group have received very good treatment from their trading banks recently. “It is untrue to say, as Mr G. M. Rodger, secretary of the Auckland province of the Federated Farmers is reported to have said, that ‘the restriction of bank credit to farmers was being applied by rule of thumb and without the slightest regard to the consequences.’ “No Discrimination”

“It is well known that strong endeavours are being made to restrict credit generally in New Zealand at the present time, but there is no foundation for any suggestion that there is any discrimination against farmers,” Mr Whyte said. “The trading banks have always viewed primary production in this country as being highly essential and over the years many thousands of farmers have received generous assistance from their bankers in their endeavours to increase produc-' tion.

“Under present conditions in New Zealand, it is generally agreed that it is necessary to restrain demands for labour and materials by restricting the volume of available money. Proposals for further development which involve the use of additional bank accommodation must naturally be affected by the general tightness of credit, and it would, of course, be quite wrong for the trading banks to grant new or increased advances to farmers or to anyone else to finance non-essential expenditure while present conditions continue,” Mr Whyte added. “However, the trading banks have no intention of adopting a harsh or unreasonable attitude to the normal and seasonable requirements of their farming customers as appears to be suggested in some quarters.”