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Hokitika Guardian, 14 July 1928, Page 2

The reduction in the bank rate was expected. With the steady improvement in tlie hanking position, it was only a. matter of time, hut since hankers arc by nature cautious and conservative, it is not surprising that they waited somewhat longer than a section of the business ivorkl thought was wise Tlio banks, however, are in a better position to judge than most of their critics, and naturally they dislike frequent changes in rates. The reduction will he welcomed not only for the relief it gives to the hanks’ customers, but for its hearing on finance generally. The effect of the reduction in making lighter the burden of overdrafts may easily lie exaggerated. An individual or a- firm in a really desperate position will not ho greatly assisted by a reduction of onehalf per cent. Tlio rate, however, affects money rates generally, including the charges for mortgage money. It is significant that the improvement in the hanking position lias coincided with an improvement in the real estate market. The reduction is both a sign of returning confidence and an assistance to the community in establishing that confidence. It has been remarked lately that business activity in the Dominion lias not kept pace with improvement in the balance between exports and imports, and it lias looked as if the money to send business forward was there, but confidence to use it was lacking. By making money a little cheaper the hanks encourage the spirit of enterprise that is needed. Coming in the middle of winter, when unemployment is at its worst, this encouragement is doubly welcome.