The Press. PRICE .. ONE PENNY. FRIDAY, JUNE 2nd, 1922. OVERDRAFT RATES.

Waipukurau Press, 2 June 1922, Page 2

The Press. PRICE .. ONE PENNY. FRIDAY, JUNE 2nd, 1922. OVERDRAFT RATES.

“The Mercantile Gazette” defends the Brinks in New Zealand against the attacks of those who object to the charge of 7 per cent. overdrafts. “It is obvious that those, attacking the banks have very little conception of the duties and responsibilities of bankers. or the functions of a bank. There is an idea dosely hugged by some that the .banks can from some mysterious source find money at any time for those who aro in want of advances. These people do not understand that bankers are no different <to merchants, and that both are bound by the iron laws of supply and demand. The merchant sells commodities, and if there- is an abundance prices fall. The banker buys and sells credit, and his prices rise and fall according to the volume of credit available at any given time. It has been suggested that since the Bank of England minimum discount rate had fallen, to 4 per cent., therefore tho banks in Now Zealand should reduce their overdraft to, say, (i per dent. There is no connection, and there can be no closesympathetic movements between the two. The Bank of England’s rale is for the. discounting of tho finest trade' bills, generally with bank endorsement, with malurily in 90 days. These are gilt-edged securities and quite different from the class of soeuritios which tho banks in Now Zealand, are asked to aecept for advances. The overdraft rate in New Zealand does not depend entirely on (he monetary rates in other ijpuntries, but upon the/ volume of credit available in the Dominion. When this credit is in small supply the rate , is naturally raised, and when tho supply ismmplc the rate is reduced. The banks obtain the credits that they advance to their clients from depositors, and mainly from those who place their money at fixed deposit, and so sell credit to the banks .for a period. A part of the current: account balances or free deposits are also mvailublo for the purpose, and so are the liquid securities belonging to the banks themselves.” BOROUGH HOUSING SCHEME. Encouraged by tho suceesss of the Borough Housing Scheme, initiated with a loan of £1'6.000, the AVaipukurau Borough Counc.il has arranged io borrow another £5OOO, and -in individual loans of £7OO if is expected to erect another Ifoven. houses. Applications for loans ■close on Monday,. June sth, at 4 p.m. The conditions, are all favourable to those anxious to secure their own house, , The money is at a verj’ reasonable rate ■ of interest, the re-payments are' not at H.ll oppressive and building will prob- i ably never be cheaper than it is to-day.

in fact an advance on present prices i« not improbable. “Building timber win never be cheaper than it is now,’’ stated the Director of Forestry (Mr. L. McIntosh Ellis),.in the course of an interview at Wellington on Wednesday. “Now is the time for the homebuildsr to get busy. Wth ithe slackening of demand from Australia, stocks arc piling up at the mills on the West Coast of the South Island. Millions of feet of choice rimu, totarn-, and beech are in stock, ready for'the market, and prices arc down to bedrock. With the advent of spring, however, these choice seasoned stocks will be purchased; and, with resultant quickened demand, prices are certain to harden.” This is an unbiased and disinterested opinion. Ttie house shortage remains acute in .Waipukurau iand with an increasing population the only relief is by the erection of) new houses. There is not much chance of residences being built for letting purposes and the Borough scheme offers an opportunity to build on easy terms