Greymouth Evening Star. AND BRUNNERTON ADVOCATE. SATURDAY MAY 14th, 1927. "MONEY-TRUST."

Greymouth Evening Star, 14 May 1927, Page 5

Greymouth Evening Star. AND BRUNNERTON ADVOCATE. SATURDAY MAY 14th, 1927. "MONEY - TRUST."

“In Australia there are far fewer banks than there were 20 or 20 years ago. and what might be termed a big money trust is coming into existence as the big banks are eating up all the smaller banks.” This warning note was given to a gathering of farmers at Christchurch, this week, anti was not from a Labourite nor too-class-conscious “Comrade,”’ but from a prominent member of the Reform

Party, Mr. H. D. Acland. What he said about Australia, is going on in several countries, notably the Homeland, where the “Big Five” are now supreme in banking circles, having absorbed numerous former rivals. In New Zealand, a few banks enjoy a monopoly, and generally, there can be no dispute

that the banking business is now in the hands of a few, who arc in .very dose co-operation. x

Money is the root of power these days, and it is not good for the public that such power should lie controlled by half a dozen or so. Admittedly, it is essential that banks should be strong, able to withstand times of stress and depression. But they .should not be permitted to be too strong to the prejudice of the community’s welfare. Many warnings have been given in late years of the increasing influence of the few banks, but for some reason or other no action is taken to revive competition, or to seize for the benefit of the whole nation, the advantages now secured for private institutions. This week’s increase in bank charges has aroused considerable criticism in various circles, and rightly or wrongly, the great majority of New Zealanders will endorse the protest of the Wanganui Chamber of Commerce, and its assertion that the Dominion banks are taking an unjust advantage of ■ the monopoly they hold. The Chamber urged that the Government should take action by appointing a Commission to deal with the matter on the same lines as the manufacturers and traders have come under the scope of the commission appointed for the P.A.T.A. enquiry. What is there about banks that they should be permitted to indulge in what would be termed, in other businesses, gross profiteering. Even in these years of .depression and general hard times, when it is difficult for firms and individuals to keep their balances on the right side of the ledger, every bank makes enormous gains. The respective balance sheets tell of larger profits, larger reserves, and semihidden assets, and the dividends paid arc such as to cause envy among other trading ventures. This happy position does not make the banks less hard on the public, as interest gets higher, and charges for keeping accounts and for exchange are maintained. Credit, not cash, unless it is other people’s, is mainly responsible for lhe banks’ profits, and there is no real reason why the credit system, based on a community’s honesty, should not be utilised more for the advantage of the community itself. It is no argument to the allegation of rapacity to declare that there are many “small” shareholders among bank proprietors. The unanswerable fact is that banking profits for long far too high, are increasing every year. If such large returns are inseparable from banking, then the State should enter so profitable a field. Bankers are on far too easy a wicket. State competition exists to the advantage of the public, to a certain extent to-day, in the State Advances Department and Savings Bank, and the time is overdue for New Zealand to do, what the Australian Commonwealth has proved to be feasible and remunerative, namely, have its own State Bank, existing for public service, rather than for private profits.