WELLINGTON NEWS

Hokitika Guardian, 2 November 1931, Page 2

WELLINGTON NEWS

MINISTER’S APPEAL.

(Special Correspondent)

WELLINGTON, Oct. 31. The Minister of Finance (Hon. A. Downie Stewart) has signed a circular . that is being broadcasted, and which is entitled “A Personal Message to you from the Minister of 'Finance,” and the circular i s dated October 23rd. In this circular the Minister appeals to investors both large and small to invest their funds in Government securities, and these are given in some detail. First there is the Post Office Savings Bank, deposits in this institution boar interest .tit 3£% up £SOO, and 3% on deposits above that amount but not exceeding £2,000. For the past two years the .withdrawals from the Post Office Savings Bank have exceeded the deposits and this has not been the result of • ipiy* want of confidence in the institution, but is due to the adverse economic conditions forcing people to draw upon their savings. ■ Jt is unfortunate just now that there is the fate of the State Savings Bank of New South Wales to make people feel suspicious of politically managed institutions, and their fears are. not likely to be allayed by the announcement that the British Post Office was in peril in April and August because the funds in this institution '.Were drawn upon to bolster up the ' dql,e. In addition to deposits there -arejPost Office certificates'which very small holders may'prefer. With re- ; speet to these, certificates have a cur- ' rency of two yiears and five' years. The investor pays , a lump sum down for ; say, a )£lO .certificate , and-.at the elnd of two years or five years, as the case may be, he received principal and interest. For the shorter term the interest works out about 5%, and for ,the five-year period the interest is approximately 5%. For the larger investors there is debentures and inscribed stock. These are being sold over the Treasury counter at pah, and the rate of interest is 5%. The difference between debentures and inscribed stock is described. Tn the case of debentures the investor gsts a bond to which is attached coupons of the half-yearly interest and the due date. The owner of the bond severs the' coupon and presents it at the Post Office'or' any branch of the bank of New Zealand or at the Treasury and receive ca.r,h. or at the Treasury and retfffivps; cash;,‘ which will do the coEe’ctingA Tlie: name of the owner of theßbond : does: not appear on the document,£ and, so’ far as the Treasury -‘.is 7 ’concerned possession i s sufficient proof of ownership. A bond can be stolen or lost and the theif or finder can detach the coupon and obtain the cash/;-(Tp). savethemselves ;■ th& safe ors prefpr i inscrihett stock. I: As ...the title indicataljthe. Hame iof tile owner of the stock is;inscribed;in the register book in the Treasury, Tha investor get* a receipt or an. (acknowledgement that his amroe has been in?,crib-

? for so lurch' stock. This receipt •£j. has..negotiable .value, and therefore its loss need cause the least worry. The interest on inscribed stock is sent direct to the person whose name is inscribed or it will be paid into la bank as he may direct. ;L-A debenture or bond is transferable from person to person without any transfer document being required, but with inscribed stock there must be a duly executed transfer authorising the Treasury t otransfer the stock from the seller to the buyer as in the case of shares. The 5% stocks and bonds mature on the Ist September, 1937. In addition to this Rural Advances 5 pqr ,I : cent. bonds maturing

in 1947, aro''I*'being 1 *'being offered for sale at par.' "This ig "a"long" term investment jiwv.and has r.n attraction for certain Vk-i; classeS'Viof investors iof With the .idea,of .keeping down the v i'A rate of interest the Government is i offering.,-? jsy ; per /CCiUtJPji interest. The Goveriitrient is in fact trying to fix ||,'{\the price of, money, , and is finding its tf price-fixing effort rather futile, for 'vbjiits stocks and bonds are not being \4; taken* upr-fh's ' readily as " desired. In open market, that" is on the Stock ' Exchange, an investor can '.purchase "~f 5J- <percent. ■ stock at , £93, or 5 per stock at £99 10s, both maturing in i >1937, -yet for TD stock maturing the same year’ the Government want £lO9 . or par.' Rural advances 5 per cent. ;,v maturing in 1947 can be brought at £B6 or £l4 less than the price at the Treasury. Can’t be wondered that f, investors . are. not rushing' to the Treasury for stocks and bonds.