BANKS TO RETALIATE

Wanganui Chronicle, Volume 73, Issue 347, 19 August 1930, Page 8

BANKS TO RETALIATE

GOVERNMENT TAXATION ISSUE OF TREASURY NOTES HIGHER INTEREST LIKELY [ Per Press Association.] WELLINGTON Aug. 18. It is understood that the Government is calling for applications from the banks for treasury bills of short date or until collections of land tax and later of income tax are available. The rates of interest at which tenders may be submitted are likely to be definitely influenced by the proposed increases in the bank note tax and in the income tax to be paid by the banks. In other words, a higher rate of interest may be asked for these new treasury bills in consequence of the proposed increased taxation. The increase in the note tax, if given effect to, is likely to lead to the realisation of Government securities and a considerable calling up of advances in order to reduce the note circulation, and the charges of the banks may be increased. It has been explained that the banks must perforce hold a substantial quantity of gold in their vaults as a foundation of credit, as the Government would have to do if it were the sole note issuing authority. Notes must have gold backing.

The views of the banks on the proposed taxation, and their objections to it and probable consequences if it is carried, have been fully set out in a private deputation to the Government.