HIGHER BANK RATE "IS UNFORTUNATE."

Star (Christchurch), Issue 18985, 3 February 1930, Page 9

HIGHER BANK RATE "IS UNFORTUNATE."

MR POLSON SUGGESTS HELP FOR FARMERS. (Special to the “Star.”) NEW PLYMOUTH, February 3. “It is an unfortunate time for the banks to raise the overdraft rate when farmers are requiring all the finance they can get in order to hold their wool,” said Mr W. J. Poison, in reply to questions. The curtailment of imports was important, Mr Poison continued, but a careful discrimination on the part of the banks might have effected that curtailment without penalising the farming community. Under the circumstances the Government might assist greatly by supporting the bonds of the Rural Intermediate Credits Board to enable it to lend against wool, as it did against wheat. That was not a question of wool control, which was highly controversial, but merely a matter of ordinary finance. “Any essential commodity which is 50 per cent below the cost of production must recover in price to some extent at all events.” said Mr Poison. Advances at present brokers’ values at 6i per cent up to £2OOO, the Rural Intermediate Credits Board’s limit, could safely be made against wool in approved stores in order to give the market a chance to rally, and would be of material benefit to the farming community. The question was of sufficient national importance, Mr Poison thought, to warrant the Government’s taking action. The Hon G. W. Forbes, in reply to a telegram from Mr Poison, had expressed the opinion that such a proposal should come from farming organisations with some degree of unanimity, before the Government considered it. “The proposal is one to which the producers might give consideration,” continued Mr Poison. “The necessary machinery already exists.”

UNEMPLOYED EXPRESS ALARM AT INCREASE.

An announcement was made last week by the chairman of the Associated Banks that the minimum overdraft rate would be increased to 7 per cent. At a meeting of the committee of the unemployed held in the Trades Hall this morning the following resolution was passed :—-“That this unemployed committee views with alarm the raising of interest on bank overdrafts, thus increasing the difficulties in the commercial and farming world as, by making money dearer, an increase of the unemployed will certainly follow. And also we shall be pleased if the Government will advise the Dominion of the reason why they have raised interest rates on Government bonds and thus given the banks a lead in raising overdraft interest.”