Are Deposits Savings?

Dominion, Volume 28, Issue 101, 23 January 1935, Page 11

Are Deposits Savings?

Sir, —Mr. Miller says that bank deposits are o£ two kinds, either in the shape of some lucky "windfall,” or a loan from the bank itself. This statement is surely not in accordance with facts. Many people’s deposits are from hard-earned savings, not "windfalls.” There are about £50,000,000 of them in the Post Office Savings Banks, not to mention other banks. Again, Mr. Miller says that those who make -deposits open an account with the bank. This shows a confusion between fixed deposits and deposits in a current account. Fixed deposits are for stated periods and rate of interest, and are practically loans to u bank. Many of these are undoubtedly from savings lodged temporarily until more suitable investment is formed. Many firms outside banking circles also receive money on fixed deposit; indeed, statistics show that commercial banks hold less than half the deposits made by the people of New Zealand. Mr. Miller also says, “the banks have acquired unto themselv.es the right of issuing the nation’s currency,” whereas that, privilege has been granted to them by the people through Parliament in those countries where this practice obtains. The State can resume this privilege at any time it may desire. From Mr. Miller’s letter it also appears that he has assumed that banks are responsible for most if not all loans. As a matter of fact twice as much credit is granted by way of loan from sources outside the banks as from the banks themselves.—We are. etc., N.Z. WELFARE LEAGUE. Wellington January 21.