THE BANK RATE

New Zealand Times, Volume XLVII, Issue 10964, 28 July 1921, Page 5

THE BANK RATE

IS IT EXCESSIVE 1 FARMERS COMPLAIN AGAINST PRESENT INTERESTS. TALK OF “GIGANTIC PROFITS.” The following motion was brought before the Farmers’ Union Conference yesterday by Mr»E. Bowmar:—“That this conference views with alarm tho ever-increasing interest rates while agricultural products have nearly all dropped below pre-war values, and recommends that the Dominion Conference, by its representatives. will impress Upon tho Government the urgent necessity of taking such steps as are necessary to prevent anv further rise. The liresent condition of affairs will, if allowed to continue, prove disastrous to the Dominion’s progress.” Mr Bowmar said that unless some steps were taken the position ■ would become alarming. Dir Hugh Morrison (Masterton) said cheaper money was a necessity. Seven ner cent, was a ruinous rate. In England the bank rate had been reduced, and that ought to follow here. Mr C. K. Wilson (Piopio) thought the action hy the hanks in raising the interest rate was ve.ry ill-advised. This was a most inopportune time to do It. The position was alarming. The hanks had made gigantic profits and should have held their hands to help the farmers over the difficult period- The banks could not exist if the farmers went under—the banks would go under too. One delegate observed that the hanks were making huge profits for one section of the community only—the bank shareholders. Captain Colheck (Morrinsville) said that if the rate of interest was made low the money would leave the country; it would he invested where the rate was higher. Mr Massey floated his loan at 6} per cent., and the public took only 40 per cpnt. of the offering in spite of the fact that it was sold at D5 V This should indicate that our rate here was not so high. As a matter of fact, tlie hank® had gone to danger point with advances, and the best cheek they could apply was a high rate of interest. Mr G. L. Marshall (Marion) thought it ought to be perfectly plain to the conference that if the hank rate was reduced the money would leave New Zealand. Mr J. H. .Toll (Havelock North) remarked that one bank had been saved by the country ’ and “this is what it is doing in return.” Mr D, .Tones (Kaiapoa) observed that money, like water, found its own level. The motion was lost hy 14 votes to 16. “ON DEPOSIT AT CALL.” Mr Hugh Mitchell (Dunedin) then moved:—-“That as the practice of leaving money on deposit at call with commercial firms has grown up largely because the banks do not pay interest on credit balances, and the evils of the practice have Been made apparent by the recent enactment of a moratorium oovering these deposits; this conference considers that steps should be taken to bring pressure to hear to compel the Bank of New Zealand to pay reasonable interest on current accounts, as is done in other .countries. If this were done, other hanks would have to fall into lino and the practice referred to above would he minimised.” This was agreed, to.