RANK OF NEW ZEALAND.

Otago Witness, Issue 3511, 28 June 1921, Page 7

RANK OF NEW ZEALAND.

RAISING THE RATE OF INTEREST. CRITICISED BY HOSPITAL BOARD. (From Our Own Correspondent.) CHRISTCHURCH, June 22. A strong attack on the Bank of New Zealand’s action in raising the interest rate to 7 per cent, was made to-day at tho Hospital Board by members. The Rev. J. K. Archer said the action of the bank was iniquitous. Presumably the reason the Finance Committee of the board had made no protest was that members were ail business men. and regarded tin., as inevitable, lie moved That they protest against the action of the Bank of New Zealand in arbitrarily raising the rate of interest on the board’s current account to 7 per cent., as, in view of the large profits made by the bank, the increase was unjustifiable. He said the profits made by the bank at a tune of financial stringency, when many farmers and others were being driven into bankruptcy, were fabulous, and amounted practically to 40 per cent, on the paid-up capital. He meant their net profits, after setting aside all amounts used for other purposes. There was fictitious capital in this institution. It had been bleeding the public of New Zealand to such an extent that it did not know wliat to do with its profits. Only last year it gave its share holders £1.125,000 practically as a free gift, and now it gave them 13 per cent, on that. At present the bank had £4858 of the board’s money, on which it paid no interest, yet it used that money io make profits. In England interest was paid on credit balances. The lion. R. Moore hoped the motion would have the- desired effect, but be "Iraq hi.s doots.” The board itself had just invested some of *ts capital at 6$ per cent. —- j per cent, below what they were to pav the bank. They were investing up to 1933 a long term, —and they must be careful they were not m much the same position as the batik. While the bank now might be making large profits, a few years ago the shareholders hail to lose money, and were only now getting some of it back. T lie Rev. J K Archer: The country saved the bank. The Hon. H. Moore: And the bank has saved the country now. The Government bad had recently to relieve many other institutions as .t had to relieve the bank. The nmlion was carried unanimous!v.