A MISLEADING PICTURE.
From the nature of some of these attacks which have teen made on the banks it might be supposed that in the dourse of.a. year the banks were in the happy position of having to pay nothing at all in the way of interest on a large part of their deposits and a maximum rate of I per cent, on the balance, with the opportunity of employ- ihg all these resources in loans and overdrafts at a mini- Mum charge of 5 per cent. That, roughly, is the picture conjured up by those who are challenging the' policy of the hanks,:and. if the picture were.a true one, then,- even after making all allowances for the heavy overhead °barges of the banks, there might be ground for regarding- banking as a highly privileged industry bringing enormous benefits to bank shareholders, but with disadvantages to the general community. Of course, with those in the City who are fairly well acquainted with the facts, these attacks to which I have referred have little weight, but because there arc many even among the educated section of the public who are only very slightly informed about the conduct of banking business, it may, perhaps, be useful to state a few general facts with _regard to the methods on which the banking business of the country is conducted, for, inci- dentally, a better knowledge of these facts also throws a good deal of light upon the whole question of profit-earning power. For at first sight I admit that there is something rather exasperating to an individual who, perhaps, because of the pressure of the Income Tax during the first quarter of the year, is compelled to pay his banker a minimum of per cent. for a temporary overdraft while _at_thP gar" time he may quite recently have obtained only a trifling rate of interest on his deposit with the same bank. Inci- dentally, - however (since- I have referred -to borrowing from the banks in connexion with Income Tax require- ments), it may, perhaps, he well to make the point quite clear that actually in the early months Of the present year, when there was the special rush to pay the Income Tax, bankers' deposit rates were as high as 4 per cent., though it is true that an overdraft charge at the same moment may have ranged from 6 to 7 per cent.
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