BANK CHARGES

Southland Times, Issue 21218, 20 October 1930, Page 5

BANK CHARGES

FARMERS DISSATISFIED.

INCREASE FOR CURRENT ACCOUNTS.

Dissatisfaction with the attitude of the Associated Banks on the question of increased charges for keeping current accounts was expressed at the monthly meeting of the Southland executive of the Farmers’ Union on Saturday, when the following letter from the Dominion Executive was read: —ln reply to a protest from this union concerning the increase in the half-yearly bank charge for keeping current accounts, the chairman of the Associated Banks wrote thus:

In view of the very substantial increase from 3 per cent, to 41 per cent, per annum in note tax imposed by’ the Government upon the banks it was essential, after very careful consideration, to increase the halfyearly charge and it is regretted that the decision of the banks cannot be reconsider-' ed at this stage. The question of reducing the charge will, however, be favourably considered by the banks if and when the Government decides to revert to the former rate of note tax, viz., 3 per cent, per annum. The banks are like any other trading concerns and are of necessity forced ,to pass on the increased tax to their customers and are fully justified in so doing. The notes in circulation are now costing the banks almost 7 per cent, per annum, and consequently the note issue would be conducted at a loss if some means were not introduced by which the banks could, to some extent, recompense themselves. It is true that the banks do earn large profits and it is equally true that other trading concerns do so also, but it Is difficult, to understand why the banks are singled out for criticism. The profits of banks are earned by the employment of shareholders’ funds which are largely owned by people of moderate means and, further, the net return on capital and reserves (virtually’ owned, by the shareholders) is in the vicinity of seven per cent, per annum. I think you will adfiiit. that this is a very modest return when compared with other commercial ventures that show a relatively higher net return on the capital invested. Mr Dickie moved that the attention of the. Dominion Executive be drawn to the unsatisfactory nature of the reply. This was carried.