AN UNCONVINCING EXPLANATION.

Hokitika Guardian, 30 March 1921, Page 4

AN UNCONVINCING EXPLANATION.

“The extension of the moratorium to apply to money on deposit at call is 1 a somewhat startling innovation.’’ says ' the ‘(‘Dominion“the consequences j of which may involve many firms and \ individuals in serious if temporary cm- ' barrassment. The explanation given by | the Finance Minister for this extreme 1 stej) is not altogether convincing. If the hanks are inconvenienced by being called on to meet th 0 demands due to the withdrawal of deposits at call with private firms, local bodies etc., who, if not the banks, will be called on tjj, meet the needs of the depositor who cannot get his money when he requires it to meet his ' current engagements? Trader A, for instance deposits £b()00 at call with Trader B, anticipating that lie will require the money a month hence to pay for goods due to arrive at that date. At due date, in ‘the ordinary course ol events, Trader lb would draw a cheque and if not in credit would arrange with the bank to meet it. Now under the new amendment of the law he can avoid payment to Trader A until tlu» end (Vi May at least. What then is the Trade A to do to secure the money to meet his own engagements? Obviously in the normal course lie will go to his bank. Dow, then, is the bank relieved? Instead of assisting Trader B to repay the deposit it is called on to assist Trader *A, who is unable to collect his money at due date. The new amendment may have its advantages, bet it should have been further safeguarded to provide against immediate cases of hardship instead of limiting appeals to a date subsequent to May .‘sl next.”