THE BANKS ADVANCE WHAT?

Grey River Argus, 3 June 1942, Page 7

THE BANKS ADVANCE WHAT?

PATRIOTISM OR PROFIT !

A Press Association message of May 26 .contains the following:—

After consultation with the Reserve Bank, the trading banks in New Zealand have announced a scheme which will give an.opportunity for firms and employer's Ro provide facilities whereby those employees may share in the national war effort. Up to the present, the people in receipt of wages and salaries have been obliged to find a certain amount of cash to cover any amount of subscription by them made to the Liberty Loan. The banks have now undertaken to give financial assistance,. through firms and other employers. The. employer will recover the purchase., price of. the bonds or stock from the ■ employees by the deduction of regular amounts from their wages or salaries over the period mentioned.

We are told that the banks will loan this money, to us at most favourable terms, i.e. 35 per cent, interest repayable in six months. Now, to the man,, in the street, who does a little thinking, the position seems to be an astounding one and, analysed, looks like this:—

We are fighting,, a desperate war against Nazi-Fascism (the. last resort of a bankrupt . system),.. and money is needed urgently. We know, you, the workers, are hard, put to it to make ends meet,, and are unable to find cash to invest in Liberty Loan ((Blessed term). The , banks have spare “Assistance” in their coffers lying idle, and will loan this to you against your future earnings, so that you can buy a few pounds of Liberty Loan; but although that “Assistance” (or credit, or money, call it what you like) is lying idle in the banks, you will be loaned it at a nominal (?) interest of 31 per cent.

To bankers this may appear to be a gallant gesture; but what have they to lose? They will win. If you meet your obligations on any borrowed money, the banks get 31 per cent, interest; if you find you can’t pay after getting an advance, the banks will get your Liberty bonds.

But the. most astonishing thing .is that the money, or credit, for advance to the workers, must be available in the banks now. Well, then, why should the workers mortgage their future wages? Why do the