A STATE BANK.

Northern Advocate, 20 August 1929, Page 3

A STATE BANK.

(To the Editor.)

Sir, —-1 see by the papers that Sir Joseph Ward finds many difficulties in the way of a State Bank. Since 1894, when the Government had a unique opportunity of establishing a State Bank by buying out the Bank of New Zealand, but let vested interests overrule them, no party has had the moral courage or ability to introduce this reform in the interests of the people. Yet the private banking companies find it a very profitable business. According to the prospectus of another company about to start, none of the banks doing business in New Zealand have paid less .than ,a 14 per cent dividend, in addition to placing big suras to reserve funds, and other advantages, such as good billets in the banks for their sons and friends, often in itself equal to a good dividend in these strenuous times. The banking companies have no doubt met a felt want in the business of the country, but why should private companies be allowed to usurp the duties of the .State, and divert what should be State revenue into the pockets of private speculators.

A bank does not produce /wealth of any kind; it is only the custodian of the wealth produced by the farmer and labourer. Though they produce nothing /that we eaii eat or wear, they always get the lion’s share of the wealth produced by juggling with it. They dominate the business of the country, often including the Government, and it is not always the interests of the community that they consider, Bigger dividends, bigger reserves, biggeir privileges 'for their class is their main objective, and there is no doubt that the present depression is largely the result of this insatiable demand. Why should we allow private speculators to use our money for their own advantage? Any profit from banking business should belong to the State, and, by reducing taxation, go back to the community who create it. A State Bank 1 would do this unless' grossly mismanaged. There is ene thing that most people will heartily agree .with. Sir Joseph says the country is not in a position, to buy out the Bank of New Zealand at its present valuation. It would ibe a wanton waste of money to do so when the money is so badly required for Other purposes, especially when there is not the slightest need for it. In the Post Office Savings Bank we have all the staff and machinery required for the experiment, without extra expense or risk. In postal notes we have a restricted form of /State currency. Remove the restriction, make postal notes legal tender and payable to bearer at any ,of the principal post offices, and only charge poundage when required for transmission through the post. All post office accounts to be pqid with them instead of other bank paper, unless the recipient asks for private bank notes. The credit of the P. 0.5.8. is as good, and better, than any private company. Most of present day business is simply an exchange of accounts. The money does not leave the banks, .and, when it does, it is only for short intervals. Pew people keep much in their houses; it goes into the bank again in other names. For those doing a good bit of business, a cheque book could be supplied, the same as by the private banks. This would save a lot of time for both customer and staff. For this privilege a charge of £2 peer annum could be made. This is more than the other banks charge, but would be offset by allowing the usual interest on the customer’s minimum credit balance for the quarter. The credit balances in the private banks must amount to . a big figure in the aggregate. Briefly put* by extending the functions of the P. 0.5.8., we would get many of the advantages of a /State Bank without extra expense. If it was given a fair trial for four or live years, ami the. position then reviewed, I think most people would be satisfied. I am, etc..

WANDERING KIWI