NEW ZEALAND BANKS.

New Zealand Herald, Volume LXVI, Issue 20332, 13 August 1929, Page 5

NEW ZEALAND BANKS.

HON. W. P. REEVES' DEFENCE.

PUBLIC MISCONCEPTIONS.

POLICY VERY LIBERAL.

[FROM OUR OWN CORRESPONDENT.J LONDON. July 12. Some observations on the general condition of banking in New Zyland were matte by the Hon. W. Pember Reeves, chairman of the National Dank of New Zealand, in his address at the annual meeting of shareholders. Mr. Reeves took occasion to reply to some criticisms commonly levelled against the banks operating in the Dominion. " You will remember," he said, "that last year an Act was passed granting a charter to a new bank proposed, but not yet started, in New Zealand. Since then the newspapers have informed us that two more enterprises are on foot in Australia to set up banks, both of which are to do business in New Zealand. So far as I can gather these three concerns are still engaged in preliminary operations, and I may, therefore, bo excused from speculating upon what effect their competition, if it materialises, would have upon business. All I will say ia that the six banks now working in New Zealand have 560 branches and agencies open to customers for business there. There is, therefore, one banking office to about every 2600 of the population. ! " The banks have lent the public j £47,000,000 —a tidy sum for a population of less than 1,500,000. If more were fairly required they could lend it. 1 would, however, point out that, so far from being niggardly toward the public they lend a much higher proportion of their deposits than English bankers would dream of doing. Nevertheless, if I may judge from what I read and hear, they are criticised for not lending enough.

" Tho truth is that there is a confusion between banking and mortgage loans. There is a loud cry for cheap mortgage money, but it is not our business to supply it, and it is most unjust to blamo us for not doing so. Furthermore, to suggest that, because banks do not lend up to the last penny of their deposits they are keeping millions of money idle which might go to develop the country id not only wrong, but equaily dangerous talk. Again, so far is it from the truth that money is especially dear in New Zealand just now that I may point out that during the last 12 months quite an appreciable amount has been sent from New Zealand to Australia because higher rates could bo obtained for it in that continent.

" With regard to the attacks which I regret to notice are made on the banks trading in the Dominion from time to time, I have no authority to speak for the other banks, but for our own company I can only say that it has been our settled policy to help primary producers in New Zealand in every legitimate way. We have a Marge connection with them and very many solid and valued clients, but to suggest that your dividends mainly come from profits made by us out of our business with farmers and farmers' companies is, I can assure you, altogether incorrect."