Trustee Savings Bank Proposed For Province

Press, Volume C, Issue 29469, 22 March 1961, Page 16

Trustee Savings Bank Proposed For Province

A successful trustee savings bank can now be launched in Canterbury, according to the member of Parliament for Riccarton (Mr M. A. Connelly) who is chairman of the Canterbury Trustee Savings Bank Committee. “A successful bank is one which would definitely add to the volume of savings,” said Mr Connelly. “This will be the principal ground on which the Canterbury Trustee Savings Bank Committee will make an approach to the Government through the Minister of Finance (Mr Lake) to establish a bank.

“The committee believes that if its approach is backed up by an indication of practical support from the public of Canterbury (which it is certain will be forthcoming* the Government will approve the establishment of a Canterbury bank. Consequently an immediate approach to the public for support is being made. “When the proposal to establish a bank was first made the ends to which it would be directed were set out as follows: Mobilisation of small savings for investment, in particular, in local body loans. Encouraging people to acquire the habit of saving. Ensuring, as far as practicable. that small savings in the Canterbury area are spent in this area, thus assisting business activity and development in the province to the advantage of all. Distribution of profits to worthy local welfare organisations. Providing extended banking services for those who find the present banking hours inadequate and who are obliged to leave large sums of money in office safes over weekends. “The advantages claimed were: good for thrift; good for the community and business activity generally; has a local flavour and attracts local patronage; is a community institution and not a Government department; collects savings locally and reinvests them locally; since it is not primarily concerned with profit it is better able to render a service to the community than other institutions; by the grants it makes to local organisations it builds up goodwill and is of real value to the community; would assist local body development; can offer extended facilities to the community; places in the community an institution which win operate purely for the benefit of the people. “Initially, like the new Waikato Trustee Savings Bank, a Canterbury bank would be required to take up the bulk of its investments in Government securities and would not distribute profits to local welfare organisations until it was firmly established.

“However, after less than 18 months’ operations the investment restrictions imposed on the new Waikato bank were removed, thus enabling it to expand its local body investments and also to open a mortgage department for the financing of new homes and other first mortgage securities.” said Mr Connelly.

"The proposal to establish a Canterbury Trustee Savings Bank has the full support of all major organisations representing the people and the business community and of local authorities as well. At a public meeting of representatives of these or-

ganisations in 1956 a committee was elected to obtain Government approval to establish a bank. “The committee made representations to the then Minister of Finance (Mr Watts) who. in 1957. put through legislation enabling new trustee savings banks to be established and also to his successor (Mr Nordmeyer), who authorised the establishment of a bank for Waikato. He also indicated he would give further consideration to the Canterbury proposal if the experience gained through the operation of the Waikato bank demonstrated that the opening of a new bank added to the volume of savings. "The Waikato bank has been a pronounced success. It opened for business in June, 1959. and 17 months later in December, 1960, it had investments of £1,479,000. comprising Government stock of £1,366.000 and local body debentures of £113,000, while deposits, which stood at £1,534,100, had accumulated at an average rate of more than £20,000 a week or nearly £lOO.OOO a month.

"It appeared that in the first six months after the Waikato bank was opened there was a net increase in the total level of savings in that area of about £381,000 because, although Jhe Post Office Savings Bank did not receive about £119,000 it could reasonably have expected by way of increased deposits, the Waikato Trustee Savings Bank deposits had increased by £500.000. “After nine months the returns showed the Post Office Savings Bank’s deposits were £300.000 below what could have been expected on the basis of the current national trend but the Waikato Trustee Savings Bank’s deposits had increased to £780,000 — indicating an apparent increase in the total level of savings of £480,000. “When the Waikato bank was about to be established it was able to place before the Minister undertakings by 200 citizens to each deposit £lOO (or a total of £20,000)

when it opened for business. In fact, increased deposits have come to the Waikato bank at an average rate of more than £20.000 a week since it started and by December. 1960, amounted to more than £ljm. "In the face of such results and because deposits earn a good rate of interest, can be withdrawn on demand, and are Government guaranteed, the committee is satisfied that a lot of Canterbury, the committee is terbury people will undertake to deposit and to save with a Canterbury bank when it opens its doors for business—and thus give vital assistance to the establishment of a bank here. "Many young people today receive high wages and could be expected to be among our most enthusiastic supporters in saving for their future needs. “After all, the pioneering spirit is not dead in Canterbury. This will be an opportunity for the public—both young and old—to pioneer the establishment of a local bank by undertaking to open a savings account in the proposed Canterbury Trustee Savings Bank,” said Mr Connelly.