The Feilding Star. SATURDAY, SEPT. 3, 1887. Cheap Money

Feilding Star, Volume IX, Issue 33, 3 September 1887, Page 2

The Feilding Star. SATURDAY, SEPT. 3, 1887. Cheap Money

It was reported in Auckland a feW days ago . that, the' banks doing business in * New Zealand had followed the lead initiated by the banks in the other Australian colonies, and arranged to reduce the rates of interest paid by them on fixed deposit from five* four, and three per cent, for twelve, six, and three months' respectively, to four or, four-and-a-half, three, ; and two per cerifc idem, i! We have no doubt that as the Auckland Herald publishes the report it is worthy of perfect credence, and may be accepted as a fact./ In our opinion this step has been forced on the banks in a great measure by their own act; When they had by overtrading, employed more money than their paid up capital or private deposits justified, 1 they .entered into keen competition with each other, as well as with persons or companies trading in money,* for capital to be deposited for certain: stated periods, at rates in excess of those offered . at Home on the best securities. As a natural consequence money has poured into their coffers to. an extent greater than they can now! profitably empToy, and they are compelled to check the influx by 'redudingy the rates paid for it. Of 2 course a' great^nuihber of deposits are new'falling due, and as the owners will ra^am;-dm^e::t? polled to «ast- abotifeifor, 7 other opengags of investment, '. "ffik .'may* then;' expect Bsme 'pi l this tealeased mraeyj will be used. profitably in reproductive works. There are thousandsof acres of good arable land now! lying, idle in many p^rts of JNew Zea-j land, simply because the 'capital required to work it has/not been available at a price Sufficiently low to be] remunerative ,$6" the farmer. < There; are local in jlustries absolutely wither-, ing^from the want of money io carry l-.hem.pn at. a profit, -by expanding the; 3ircle of. tbeir operations.. -ijntil the and of ..the : jpbapt.er, jthere.^ will exist farge numbers of cautious persons, who,.

will not be tempted to risk their savings in any other way than by bank deposits,, so there i& no chance or probablty^that^^b^iiks will ever suffer : k;tKat}dir^i|oi th^e public become doubtful btjfche security ,of the institutions. A; contingency not very probable under the plan which now obtains of publishing each quarter -m^yikm^ovemmeia^&ms&ttm^ sworn statements of their several and Viabilities: On the other hand .there are hundreds^ who are liolnTn^fiF^ot^sp^^ cheap money is the breath of their nostrils? ; aUhough dangerous at any time, while always a wonder or a terror to slow-going: plodders do a" lot'bf goodby sfirring up feelings of energy arid hopefulness so apt to I become dormant in people during a long peried of commercial depression:! They act as a kiricl of jmoral tonic or stimulant by bringing into action the recuperatrve powers of a body become inert through want of healthy exercise. They have confidence themselves and inspire the feeling in others. We do not wish it to be inferred we see any indications of the near .appi^p^ of a seas/n c %hen wild speculations or absurd money' making schemes con-' tanning within themselves the elements of their own ruin, will be rifd. On jthe contrary we think the lessons of Jcautidn and foresight taught by the bitter experience of the past, will go far to' obviate any such undesirable state of things. But we do think cheap money will make trade better, labor more plentiful, and all classes ■ tetter, satisfied with, their positions, i