BANKING POLICY

New Zealand Times, Volume XLVII, Issue 10963, 27 July 1921, Page 5

BANKING POLICY

SOME OF ITS EFFECTS PRODUCERS’ VIEW RESPECTING ' STATE BANK. ENORMOUS PRIVATE PROFITS. Banking policy was touched on by Mr G. W. .Leadley in his address as president of -the Farmers 5 Union yesterday. Mr Leadley .said: — ‘'Considerable discussion has taken pia-co in our public prints and else—where as to the effect* of the rather conservative policy adopted by the banking institutions of the Dominion. Naturally, widely differing opinions have been expressed. There seems, however, to be a preponderance of opinion that the banks were wise an putting on the brake in regard to speculation in land which was going on, and whioh bod resulted in many cases in forcing up the price above a, fair produictive value. But whilst such a policy in regard to land purchase may have been, .and probably was, perfectly justifiable, there is a-lso a widespread feeling that those engaged in the important work of primary production did not receive quite such liberal 'treatment as those engaged in mercantile and manufacturing pursuits. The and altogether unprecedented importation of goods of all descriptions during the preceding six or eight months, and the necessity for meeting the drafts against these shipments, caused a heavy strain upon the resouft’ce® of the banks; whilst the reduced spending power of the people resulted an a prolonged delay in the realisortion and disposal of these goods, and a consequent locking-uip of the money represented. <‘RECORD PROFITS.’’ ‘ One thing, however, is apparent, viz., that whilst most businesses are merely marking time/ and many are working cut a lose, few, very few indeed are making 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 1-asfc business year, I venture to predict that the next annual balance-sheets of some of the banks will disclose profits greater than ever. “These facte are not going without observation, and many people are beginning to speak favourably of the establishment of a State Bank. “Personally, I have nevetr been enamoured of that idea, but really when one sees such enormous profits going into the pockets of private shareholders, one as disposed to ask, why should not. some of this rnoaiey go to the people; who earn it? I believe the time will; come when the State will do its own banking. “FOR THE BENEFIT OF THE STATE.” • : “The argument against the State Bank has always been the fear, that an State administration, political influence may oomein, and that influence might conduce to the patronising of some favoured individual, but I think the record of our public men and our high State officials has been 'sufficiently dieaur, and creditable, to dispose of that ! bugbear. It may be contended that the State already reaps a very large revenue from the operations of tlie banks by way of. income-tax, tax on their noteissue, and otherwise. This ds undoubtedly true, in the case of the Bank of New Zealand—Government takes 14s 8d in the £; but. when one looks at the figures issued by the various banking instituiibiions themselves, , and notes the enormous amounts of free deposit®, and tlie high rates charged for advances no doubt fully secured, and the consequent 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. community instead of a private corporation or institution. Lord Bacon has said: ‘A State .ever.flourish-. eth where wealth is more equally spread.’ ”