WELLINGTON NEWS

Hokitika Guardian, 26 February 1929, Page 2

WELLINGTON NEWS

SAVINGS BANKS AND THRIFT.

[Special To The Guabdian]

WELLINGTON, February 22

The Post Office Savings Bank was established in' New Zealand to encourage thrift among people of small means and to a certain extent it has achieved its purpose. While it confined itself to its legitimate purpose it was certainly doing good work. Baring the war it became necessary to secure as much money as possible to finance the war savings certificates were issued and about *the sarnie time the limit of deposits was increased. Later ihe limit of deposits further increased and men began to make use of the institution. Largely| owing to this the Savings Hank experiencing some trouble for during the first five years tbe withdrawals have exceeded the deposits, that is more has been taken 'out than has been-dodged in the hank. Tn tne calendar year 1924 the withdrawals exceeded the deposits by £93,626, in 1925 which wait, generally regarded as a prosperous year the withdrawals uoio again in cxcekfk although only to the amount of £2Sfc»l23. In 1926 the withdrawals went up to £727,116, in 1927, however, which;'happened to be a year of depression the withdrawals exceeded the deposits by the huge sum of £9,908,879. :jy Last year the excess was still most marked for it 'totalled £l-,859,616. The movement, and it has been an adverse movement, lias been too consistent and too prolonged to he passed over lightly, and the matter .'should - receive, the attention of the authorities, for it is obvious that a radical change must be effected in the policy of the Savings Bank and new methods ..adopted, to encourage the people to be thrifty. In other countries close 'atteiition is being given to the matter and success is being met with even in countries suffering from unemployment. A case m point is the Glasgow Savings Bank," •which set up several records last year, •notwithstanding the great amount of unemployment. Over 300,000 depositors have at their credit £23,000,000 —an increase of. £1,000,000 for the year. In 40.000 home-safes was played £163,000 In the report of the. bank it is stated that the numbers of- depositors, volume of business, balance lit depositors credit and bank reserve, each, constitutes a record. The bank ■'•is claimed to bo the largest trustee Savings-bank in the British Isles and one of the largest in the world. It is stated by an authority that the amounts to the credit oi the depositors in trustee savings banks in the Post Office Savings Bank and in other similar institutions representing the savings of those with small means, amount to about £1,200,000,000. On the other hand unemployment had increased and in the light of these facts it is suggested that the time is ripe for a comprehensive inquiry into the better direction of the thrift of the people. One of the greatest financial tragedies in Britain since the war has been the expenditure of at least £650,000,000 from public funds in mere relief. A comprehensive inquiry is needed in New Zealand, for five years is a long time to tolerate the adverse movement. It is true we have unemployment, but our circumstances in that respect are nothing as compared with Britain, arid they are saving there while we are not. No doubt the cost of living has a great deal to do with the matter, for extravagance is everywhere obvious. It is surely some part of the duty 6f the State to induce the people, and particularly the people ■with small means, to cultivate habits of thrift and avoid extravagant luxuries.

THE USE OF THE CHEQUE. Gold has ceased to circulate in most countries, and perhaps the United States is the only exception, and yet the gold standard is now fairly universal. The withdrawals of gold from internal circulation has created no difficulties but has brought about a great development in the use of credit instruments. An idea of the volume of this growing business is to he obtained from the Bankers’ Clearing House for last year. 'Hie bills, cheques, drafts, etc. handled in 1928 totalled £44,204,729,000 and exceeded by £2,654,188,000 or 6.3 per cent, the figures for 1927, which was itself the highest reached up to that time. The daily, weekly and monthly totals all touched new high levels and on no Jess than fifteen occasions more than £200,000,000 was dealt with in a single day. The factors responsible for this record are the sale of Treasury bonds and other Government financial transactions, the increased turnover of jnoney in the short money market, and the activity on . the Stock Exchange. Tho United States would probably show much larger figures but then America has about three times the population of Britain. If the figures for New Zealand could be collected it would probably be found that the use of credit instruments is increasing, and will go on increasing more particularly if confidence exists.