A FINANCIAL SURPRISE

Hokitika Guardian, 30 March 1921, Page 1

A FINANCIAL SURPRISE

"Aimueiiirni must but feebly describe Lie experience of depositors of money at call,” says the Wellington ‘ Rost,” ‘•on learning that the Government has .-.tretched llie moratorium to cover them. Parliament appears to have been impressed by ilu* .Minister <J Kiiiance with the urgency of the measure, and generally endorsed it. It means that, excepting hanks and savings hanks, any firm, corporation, society or local body which has taken .sums ol money on deposit at a low rale of interest at call need not return the deposit when demanded until December :S! next, or afterwards, unless a Judge orders il to do so on the application of ;i depositor. The measure was conconed in the utmost secrecy, and was brought belore the Mouse ol ReproseiiI a lives at all hour when it would have he: n practically impossible lor any depositor to have made application lor the return of his deposit on demand, as before this legislation he was entitled to do. Two hours were allowed for the discussion of (.his emergent and important legislation, and il speedily passed on to the Statute Book. It evokes innumerable questions. The rhiel ol them is, uloil ahnut the depositors who are unable to obtain their money at call the paramount condition on which it was lent -and have to meet engagements, possibly outside ol New Zealand? It may he said that they should apply lo their hankers; hut the measure was pul through with celerity, it is said, in order to relieve the pressure on the hanks made by those with whom the deposits had been placed. Will the hanks, then, he anv readier than they

were before to meet requirement . ol customers who have ample funds of their ow n locked up by the moratorium ? Supposing that, they do make such advances, what will he the rate oi interest the hanks will charge? Will it lie 7 or S per cent to people who may have plenty nl money that would he available but for the moratorium and yet on which possibly only J to I or cent is being received? AA ho will hear the difference between the hank rate and th deposit-at-eall rate? There are other question, too. that readily arise in considering this drastic step. It was taken, so it was explained, to prevent embarrassment. That it may do in some cases, hut in others it will create it. in the absence of reassuring answers to the many knotty questions this application of the moratorium will evoke.”