WELLINGTON NEWS

Hokitika Guardian, 12 August 1927, Page 1

WELLINGTON NEWS

MONEY RATES. (Special to “ Guardian.”) WELLINGTON, Aug. 10. The circular sent out by the P.O. Savings Bank directing attention to the comparatively high rates of interest offered by that State institution for deposits and other favourable terms offered was. as Sir Joseph Ward said, asking people in plain English to divert their deposits and hand them over tci tlie Government, and he went on to

observe that: “ If that goes on you will have money up to S percent before you are much older. How are the banks, whicli are the chief lenders, to both small and big men to lend if they have not the deposits?” Sir Joseph Ward was in his day PostmasterGeneral as well as Finance Minister, and lie knows the subject of finance better than any other man in the House. The P.O. Savings Rank woni'd no doubt like to largely increase its deposits just now. especially for the limit lots which carry only 3.', per cent for then the Government could borrow the money from the Savings Rank at a relatively low rate. The figures for

the P.O. Savings Bank for each of (he past six years to March 31st last shows that except for the 1023-21 term the withdrawals have consistently exceeded the deposits, while the number of depositors lias steadily increased and so lias the aggregate of the deposits. On March 31st, 1022. there were 078.030 depositors, and the aggregate of the deposits at that date was (M3,8-1],701. on March 31, 1027, the number of depositors was 783,827 and the deposits aggregated 018,0*3,502. The actual amount of deposits during the past year was 029,150,383, and the withdrawals 030.1 10,020. showing an excess of withdrawals of 0003.2-1(1, and yet the aggregate deposits at 018,085,502 shows an increase, of just over a million sterling as compared with the previous year. This arises from the fact that the interest credited to depositors amounted to 01.707.120, so that the excess of withdrawals amounting to 0003,210 did not prevent the aggregate deposits expanding. The position of the I’d). Savings Bank is in striking contrast with the private savings banks winch show steady growth in the number of depositors and except in 1022 substantial excess of deposits over withdrawals. The private savings banks

are carrying out the true functions for which such institutions are established, but the P.O. Savings Bank appears to be run with the object of supplying the Government with cheap loan money. Tf the trading banks arc to be forego! to face such unfair competition then Sir Joseph Ward’s prediction that a rate of 8 per cent may yet he imposed is likely to be fulfilled. BANKRUPTCIES.

The number of bankruptcies within the Dominion continues to increase and we shall probably have further increases. During the flush time of 1024-25 unite a number of people were temnted to venture into business, and it is feared that a great many did so with little or no capital and in some eases without sufficient knowledge of the business. The weak ones are now passing out,, and their commercial morlai'ity Is not to be mourned. During the months of June the bankruptcies

registered in the Dominion numbcrccl So against (50 in June Inst year, an increase of well over 50 per cent . For the six months ended June .‘loth there were Ml insolvencies, that is more than two per day, for every day of the six months, while for the correspondin'; six months of last year the number was .'1315, there was thus an increase of 103, equal to more than 32 per cent. The Auckland district, with 103 insolvencies, held the premier position and showed an ncrense of 51 as compared with flic first half of last year. Tn the Wellington district the figures were 121 against 00, an increase of 31 or 25 percent. Of the total insolvencies for the half-year 319 occurred in the North Island as against 210 in the first half of Vast year, an increase of 73. ennal to about 30 per cent. The South Island figures were 122 against 87 an increase of 35, or just over 00 per cent. Taking the figures for the year ended June 30th last the bankruptcies numbered 811 against 001 in the previous year, an increase of 150, equal to 22 J- per cent.