ADVERSE CRITICISM

Hawke's Bay Tribune, Volume XXII, Issue 156, 17 June 1932, Page 6

ADVERSE CRITICISM

LEVELLED AT BANKS A CHAIRMAN’S REPLY. CONDUCT OF FINANCIAL AFFAIRS. “It would perhaps be not out of place for me to refer to the adverse criticisms, which have been so persistently levelled at the banks under present economic conditions,’’ stated Mr. Oliver Nicholson, chairman of directors of the Bank of New Zealand, in his annual report to-day. “One would gather from these criticisms that, in the opinions of the critics, the banks are to blame for many of the problems confronting the Dominions at the present time, but they are oblivious to the country’s best interests, and that they are only solicitous for the earning of the largest possible dividends for their shareholders. Such is not the case, as all banks fufly realise that the prosperity of the country is closely interwoven with their own success and that it is their particular province to see that financial affairs are conducted upon those sound lines, which their many years of experience indicate are essential for its safety and prosperity. They cannot be expected to stand by unprotestingly when sound financial principles are being violated. It is essential that there should always be a close cooperation between the Government and the banks in all schemes of financial! policy, if national difficulties capable of practical solution are to be surmounted as speedily as possible. Critics and other people of the Dominion must concede, that if it had not been for the financial resources and strength of the banks to meet the requirements, not only of the Government, but also of their customers generally during the past year —the position of the Dominion ajid its people to-day would have been in a very deplorable state indeed. GOVERNMENT’S RECENT LOAN. “The Government raised a 5 per cent, loan of five million in London last April at an interest cost of about of per cent. The issue was very favourably commented on by the press, but unfortunately it was made just as a sudden and quite unexpected cessation of the demand for gilt-edged investments set in. The underwriters were left with 47 per cent, of the loan, but on the market improving, this balance of the issue was quickly absorbed. Four millions of the loan is to be utilised for repayment of that amount of Treasury bills maturing in London this month and one million for Public Works. The Dominion Has every reason to be satisfied with the result of the loan, which reflects the high credit New Zealand enjoys on the London market The exceptionally low rates for money now ruling in London should enable the Government to finance there temporarily on Treasury bills, thereby obviating the necessity for remitting funds from New Zealand at the present high rate of exchange and also saving a considerable amount in interest.

“It must not, however, be overlooked that the recent riotous occurrences in Dunedin, Auckland and Wellington have, for the time being, had a disturbing effect on country’s credit on the money market in London.”