EXCHANGE PROBLEM.

Hawera Star, Volume XLVIII, 18 October 1924, Page 5

EXCHANGE PROBLEM.

' FUNDS IN LONDON BANK CHAIRMAN’S STATEMENT. (by TELEGRAPH—PRESS ASSOCIATION. WELLINGTON, Oct. 17. Doubts having been cast on a statement made by the banks that they are holding an excessive accumulation of funds in London, Mr William AVatson (acting-chairman of the Bank of New Zealand) made an announcement today regarding that feature of the exchange position.

“As far as the Bank of New Zealand is concerned at present,” he said, “the resources of the bank in London amount to £9,500,000. This is at least £5,000,000 more than, is required for the conduct of the bank’s business, and at times during the present year the surplus has been some millions in excess of the present On this large amount of money there is earned only one-half the interest which could be obtained if the funds could be transferred to the Dominion. It should, therefore, be obvious that it would be in the interests of the bank to have the excess of its resources in London made available for business in New Zealand. As it is, the inability to transfer these surplus funds to New Zealand has obliged the hank to restrict advances in the Dominion. “If the hank considered onlv its own interests,” added Mr Watson, “it would not purchase any bills on London until, by sales and exchange, its funds had been reduced to satisfactory figures. Such a drastic measure would, however, he disastrous to the exporters and producers. Therefore it is better for the welfare of the Dominion as a whole that all hills offering should he purchased, the hank charging the exchange rate, to enable it to meet the exceptional position now; existing.”