WELLINGTON NEWS

Hokitika Guardian, 26 June 1926, Page 1

WELLINGTON NEWS

THE BUTTER -MARKET. (Special to “ Guardian.”) WELLINGTON, June 23. The quotation for butter in the London market has been somewhat peculiar recently. Last week Danish butter was sold at a lower rate than New Zealand for which there is of course an explanation. Danish butter is sold mostly in the Midlands, but that max-; ket has been disturbed through the coal crisis, and the demand lias slackened because there is not the purchasing power. The consequence is that increased quantities of Danish butter have hud to be marketed in London Furthermore, owing to the increase in the Customs tariff, the importations into Germany of Danish butter lias declined considerably, and this surplus lias had to be sold in London, and furthermore it is reported that the Danish output shows nn increase. It is well known that the Danes make it a rule to clear their stocks each week irVespective of price, and that is apparently what they have been doing in London which accounts for Danish butter realising less than New Zealand. The High Commissioner’s last cable message gives the quotation for Now Zealand butter at 175 s (id per cwt and for Danish 1775, so that whatever advantage New Zealand butter had over Danish, it was short-lived. Still it is somewhat remarkable that the throe principal butters. New Zealand, Australian and Danish should show so little margin in value. Danish is only Is (id per cwt above New Zealand, and the hitter is only 2s (id above Australian. the average prices being. Now Zealand 175 s fid, Australia 1735. ami Danish 1775. To what extent improvement in quality lias diminished the i margin between New Zealand and Aus- i Malian, it is hard to say. and it would be also difficult to say what extent | .he long storing of New Zealand butter | las influenced the price. Notwith- t Banding the relatively high prices of ( New Zealand butter, in authoritative , ■ircles, it is felt that there has been )

too much storage lately, and that the companies that have been holding { stocks in store from six to ten months , are overdoing it. New Zealand butter held so long loses its freshness, and in s some cases opens out stale. Some p November butter is reported to he still c in New Zealand. As a general rule it

("in be .said that the shorter the tunc between eliurii and consumer the better. Ever since about the middle of March last New Zealand choicest salted butter has boon making 171 s and over, except at the end of May when the control exorcised during the strike was abandoned, when the price dropped to Kills for a few days. The .statistical position rather favours prices, for the imports into the United Kingdom in the live months to May 31st last totalled 2,578.000 cwt, against 2.817,000 cwt in the same period last year, a shrinkage of 11,900 tons. European supplies have apparently not made up the deficiency from New Zealand and Australia. POST OFFICE SAYINGS BANK. The basis upon which Post Office Savings Banks were established was the encouragement of thrift. The object was to encourage those who could save Itv pennies and sixpennies to do so; the encouragement offered was undoubted security for their funds, being guaranteed by the State, and a comparative high rate of interest on deposits at call. In most countries the lim.it of deposits on which interest is paid is ColiO. it is so in Britain where 21 per cent is allowed, and in the United States, where the interest rate is 2 per coni. In New Zealand I per cent is allowed on deposits up to 12500. and 3', per cent on deposits above that amount up to CoOOO. Up to C-iOO the depositors could lie reasonably classed as “small.” and it is perhaps right that the State should undertake the safe investment of their funds, hut when it comes to Cl,ooo to Co,ooo deposits it is finite a different matter. It is stated by an authority that, the Oovernmen borrows from the P.O. Savings Hank at a rate of 1 per cent, below what would have to he paid in the open market and that there are no flotation expenses to ho paid. The same authority asserts that deposits of Clooo to CoOOO represent about C 17,000,0000 of the total C 17.000,000 held by the Post Office Savings Bank. - This C 17.000.000 rightly belongs to the joint-stock banks and should he available for the industrial and commercial development of the Dominion. But the Government needs money at a. cheap rate and so it competes unfairly with the banks. Another Government pressed for funds may raise the deposit limit to £IO,OOO or even £20,000. Tt is not so much the encouragement of thrift as the means of getting money at a cheap rate that animates the authorities.