The Press. THURSDAY. JULY 18, 1895. "FOR THE ENCOURAGEMENT OF THRIFT."

Press, Volume LII, Issue 9160, 18 July 1895, Page 4

The Press. THURSDAY. JULY 18, 1895. "FOR THE ENCOURAGEMENT OF THRIFT."

A highly suggestive return was laid on the table of the House on Tuesday afternoon, which must have been of deep interest to members anxious to know what had been the working of that wonderful measure, the New Zealand Consols Act, which, as everybody knows, was passed to create a sort of moral revolution in favour of thrift among the people of New Zealand. " Whereas it is expedient to encourage " thrift by affording to the people of " New Zealand facilities for the safe " investment of their money"—such is the preamble by which it is introduced in the Statute Book. The Hon. Mr.

Ward, in moving the second reading of the Bill, drew quite a pathetic picture of the number of deserving people who were yearning for some such safe and simple method of investing their frugal savings, and for whom the Post Office Savings Bank did not afford sufficient facilities. Not only private investors of small means, but the Friendly Societies, ho urged, would rush for the consols as the most eligible security in which to place their surplus cash. Well, the Act has been for the best part of a year on the Statute Book, and what do we find ? The total amount of deposits received is £158,025, and the following are the particulars of investments made:— " On the security of debentures issued " under the Government Loans to " Local Bodies Act, 1885, interest at " 4 per cent, per annum, £8000; on " the security of fixed deposits of the " Colonial Bank of New Zealand, " interest at 4 per cent, per annum, " _15O,O00." The nature of the lastmentioned transaction was explained to our readers some months ago. The Government sold £150,000 worth of consols to the Bank of New Zealand and deposited the proceeds in the Colonial Bank. In other words they borrowed £150,000 from the Bank of New Zealand and lent it to the Colonial Bank. It now turns out that the rate of interest paid by the latter institution is 4 per cent. This is the rate at which the Bank of New Zealand borrowed tho money from the British bondholders. If the consols were purchased on the terms at which they are offered to the small investor the Bank of New Zealand was generous enough to lend the money to the Government at 3k per cent., so that the latter in relending it to the Colonial Bank makes A- per cent, on the transaction to recoup itself for its trouble in the matter. But we do not see how all this tends to the " encouragement of thrift." Nor do we see where the small depositor and the friendly societies come in. When the Colonial Treasurer was moving the second reading of the Bill, if there was one subject which he was more eloquent upon than another, it was that this desirable form of investment must be kept sacred for the frugal depositors of humble means and thrifty friendly societies, to whom it was to be such a godsend. "The " desire of the Government," said the hon. gentleman, "is to protect " the people of the colony from any " possibility of these consols being " bought up by outside people and " syndicates that may desire such " security as this." The Government gave a singular proof of the sincerity of this desire by selling three-fifths of the whole amount of consols at their disposal to the Bank of New Zealand at the very earliest opportunity after the Act was passed !

But there is yet -88025 of the deposits under this thrift-encouraging Act which we have not dealt with. Of this sum £8000 is represented by debentures under the Government Loans to Local Bodies Act. We have no official explanation of what this means, but we take it that by some financial hocuspocus the Treasurer has sold or hypothecated consols to that amount, and lent the money to local bodies. When pressed in the House as to what he intended to do with the money raised under this Act, Mr. Ward made a great show of being about to give the House full information on this important subject. We have waded through a page and a half of Hansard supposed to contain this explanation, but the only definite announcement to be found in the whole cloud of verbiage is that "portions of " this money could from time to time " be issued in lieu of Treasury Bills." Not a hint about a loan to the Colonial Bank—not a hint about loans to Local Bodies! But we have .still left £25 unaccounted for, and unfortunately the return gives us no details as to how this was obtained. Perhaps this represents the Treasury Bills, upon which Mr. Ward laid so much stress; but if so, the honourable gentleman's warmest admirers can hardly say that it was worth while passing an Act of Parliament to relieve his finances to this extent. We are generous enough to believe that here at last we have evidence of the thrifty depositors, for whose especial benefit the Act was passed. To this end was the time of Parliament taken up, and elaborate legislative machinery provided—that some thrifty and cautious depositor or depositors, not satisfied with the Post Ofiice Savings Bank might purchase £25 worth of New Zealand Consols! We wonder how many depositors there are. There cannot be more than five, since the lowest amount of stock issued is £5. Or did some saving but adventurous person screw up his courage to launch out to the extent of a full £25 in this new and attractive and thrift-encouraging form of investment? We cannot say. The special correspondents are silent, and it may be even the Blue Book does not give the information. But we hope it will not be altogether withheld. We look upon the depositor, whoever he may be, as a patriot whose name should be embalmed for the admiration of his country. It will then go down to posterity with that of the framer of this wonderful Act. For whatever else may be forgotten— when even the 3 per cent, loan has dropped into oblivion—Mr. Ward should still be remembered as the originator of the New Zealand Consols. This is the stock which ought to be christened" Wards," following the precedent of the English " Goscheks." We certainly regard the Act as tho mo3t remarkable enactment for the encouragement of thrift to be found anywhere in the wide world.