BANK OF NEW ZEALAND

Te Awamutu Courier, Volume 71, Issue 6139, 21 September 1945, Page 5

BANK OF NEW ZEALAND

Sir, —I would like to thank J. T. Mcßeth for his letter answering some of my questions. I hope I am leaving school next year and if I get any money I will put it in J. T. Mcßeth’s Bank because he seems to be an honest man, and if the Government takes over the Bank of New Zealand and keeps men like Mr Mcßeth to run the Bank it should be quite all right and it should be much better for everybody because the Bank won’t have to make its customers pay so much interest because there will be no dividends to pay to shareholders who don’t seem to be any use to a Bank any how, Mr

Mcßeth explains it quite clear how the Banks make their money by writing figures in books and then lend it to the customers who give the Banks securities to' show they have got a loan from the Bank. Because the people want to have bank notes and coins instead of everybody using cheques, the Banks have to get them from the Reserve Bank by sending it some of the securities so it can see that the trading bank has lent some new money and because the borrower may need some of the loan in notes that the trading bank hasn’t got. I don’t think it is J. T. Mcßeth’s fault that the Banks call securities liquid assets sometimes and other times just “hard cash,” or tangible assets or reserved or deposits or bonds. It’s what a lecturer at our school sometimes would call “flapdoodle.” It sounds all right but isn’t and I am not surprised that the Banks get their friends in the National Party to try and keep the Banks for their shareholders and the Labour Party is trying to get it for their friends. I don’t think either of them should get it; they should belong to everybody like the railways and the post office do. If the Banks got hold of some proper money and only lent that to people instead of lending credit money they could jolly soon make Mr Nash sit up because they Wouldn’t have to get any more of his Reserve Bank notes and so could do just what they liked, but perhaps that would be just as bad a mess. I would like toi thank you, Mr Editor, for putting my letter in the Courier and getting Mr Mcßeth to reply to my questions.—l am, etc., SCHOOLBOY.