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Wednesday, 23 November 1960

Mr HAROLD HOLT - I think the honorable gentleman has overlooked the fact that, associated with a rise in the interest rates chargeable by the trading banks, there is to be an increase in the interest rates which they will pay to people who lodge moneys with them on deposit. There will be quite a substantial and sharp increase in deposit rates. Only after one could see the total outlay which the banks would have to make in respect of the increased deposit payments, set against any increased returns they could obtain from the increased interest rates on overdrafts, would one be able to determine just what increase, if any, had occurred in their profit earnings. I think it is only reasonable and fair to the banks to add that in recent times, according to my information, their profit earnings have been somewhat lower than the returns from industrial and other investments have been.

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