“WHO MADE IT SO?”

Star (Christchurch), Volume LXVI, Issue 20233, 17 February 1934, Page 9

“WHO MADE IT SO?”

Banker Discusses State of Money Market. (Special to the *’ Star.”) WELLINGTON, February 17. I “ In his criticism of the money market in New Zealand, Mr W. J. Poison, j president of the Farmers’ Union execu-! tive, is reported to have said that in-1 terest rates were too high. He also referred to the amount of money in the banks to-day as indicating that | money was too dear. Who made it so?” Asked a banker in discussing Mr Poison’s remarks with a representative of the “ Evening Post.” He answered his own question: “ The Government,” and continued;— “ Mr Poison has made an important omission, but I am not surprised at that. He has failed to take into account Treasury Bills held by the banks. Mr Poison will find what they amount to in the Government’s statenine months which has just been pubnine months which have just been published. There he will see that these Treasury Bills so held amount to nearly £20,000,000, or £19,313,294, to be exact. “To the end of January the banks advances totalled £41,800,000 of their total deposits of £60,800,000, showing an excess of deposits over advances of £19,000,000, excluding the Government balance. Therein is the answer to Mr Poison’s criticism that the amount of money in the banks indicated that money is too dear. " Had Mr Poison consulted the ‘ Gazette ’ he would have seen what the banks have advanced to the Government. Ilis conclusion that there is a surplus of'money in the banks is unsound and he could have assured himself of the facts before speaking, had he taken the trouble to do so. He preferred to speak first.” It was also stated on banking authority that there is no difficulty today in obtaining advances for credit for worthy purposes. As a matter of fact, it was added, that the banks are continuing to carry farmers and other clients who are in difficulties, and they have been doing so all along.