BACKS' HIGH PROFITS.

New Zealand Herald, Volume LVIII, Issue 17845, 28 July 1921, Page 8

BACKS' HIGH PROFITS.

FORTUNATE SHAREHOLDERS.

FARMER'S VIEW OF POSITION.

Discussing the operations of the banks in New Zealand, in his presidential address to the Farmers' Union Conference, Mr. G. W.' Leadley said there seems to be a preponderance of opinion that the banks were wise in putting the brake in regard to speculation in land. But while such a policy in regard to land purchase may have been, and probably was, perfectly "justifiable, there is also a widespread feeling that those engaged in the important work of primary production did not receive quite such libera! treatment as those' engaged in mercantile and manufacturing pursuits. Continuing, he said that, while most businesses are merely marking time, many are working at a loss, and very few are makine- a profit, the banks are making record profits, and declaring unprecedented dividends, and that though the higher rates for accommodation have only been in operation for a part of their last business year. He predicted that the next annual balance-sheets of some of the banks will disclose greater tlian ever. " These facts are not going without observation, and many people are beginning -to speak favourably ■of the establishment of a State bank," said Mr. Leadley. , " Personally, I have never been enamoured of that idea, but. really, -when one sees such enormous profits going into the pockets of private shareholders, one is disposed to ask, why should not some of this money go to the people who earn l. o " e l !eve *k* *hne .-will come when the State will do its own hanking. "It may he contended that the State already reaps a very large revenue from the operations of the banks by way of income tax, tax on their note issue, and otherwise. This is undoubtedly true in the ca«e of the Bank of New Zealand, but when one looks at the figures issued by the various banking institutions themselves, and notes the enormous amounts of free deposits, jwid the hieh rates charged for advances no doubt fully secured, and the conseouent fat dividends annually distributed to the fortunate shareholders, the lay mind is apt to wonder why a portion of these good things cannot be secured for the benefit of the State as a whole. Anyhow, it must be better that the people's savings should benefit the entire communitv.instead of a private corporation or institution "

RISING BANK BATE. DISCUSSION BY FARMERS. [BY TELEGRAPH—PRESS ASSOCIATION.] WELLINGTON. Wednesday. The bank rate was the subject of discussion at the Dominion Farmers* Union Conference to-day. It was raised by a Southland motion to the effect that the Government be impressed with the urgent necessity of taking the necessary steps to prevent a further rise in the bank rate Mr. Hugh Morrison- (Masterton) said cheaper money was a necessity. Seven p'er cent, was a ruinous rate. In England the bank rate had been reduced, and that should follow here. Other delegates criticised the action of the banks m raising the rate. The position was alarming! The banks had made gigantic profits. If the farmers went under the banks would also go under. . Captain Colbeck (Auckland) and other delegates contended that if the bank rate of interest was made low monev would leave the country to be invested where the fate was higher. The Prime Minister floated his loan at 6£ per cent., and the public took only 40 per cent, of the offering, in spite of the fact that it was sold at £96. This should indicate that the rate here -was not too high. The banks had gone to danger point in the matter of advances, and the best check they could apply was a high rate of interest. The motion was lost jt 14 votes to 16.

FINANCING PRODUCTION.

"BANKS DOING THEIR BEST." [BY TELEGRAPH—PHESS ASSOCIATION.] WELLINGTON. Wednesday. " That the Government be urged, in conjunction with the banks, to reserve all possible assistance for the producers of the country in the difficult times ahead," a remit moved by Mr. Stace (Blenheim) at the Dominion Farmers' Union Conference to-day. Mr. Lysnar (Gisborne) said he hoped the motion would not be passed. The banks were doing their best to help the producers. A Delegate: And doing it well. Mr. Lysnar said it would look very bad if tfcey passed the remit. Tbe proposal was defeated.