BANKED-UP FUNDS

Evening Post, Volume CXVIII, Issue 33, 8 August 1934, Page 12

BANKED-UP FUNDS

Lack of confidence, ■* coupled with the fact of the high exchange rate, said Mr. A. G..Lunn, had resulted in capital funds banking up in the Dominion and forcing down rates of interest, which were now approaching a new low level record. v He was addressing, as chairman, the annual meeting of the Dominion Investment and Banking Association, Auckland. Mr. Lunn said it was not surprising to find that there was a large amount of capital seeking investment upon mortgage at low rates of interest and a scarcity of first-class securities. First mortgage funds were being offered as low as 4% per cent., which today might be ac-

cepted as the mortgage rate for first-class securities. That factor had necessarily had its effect in the past year upon the rate of interest earned in the reinvestment of the association's funds. With £57,000 of its funds invested iv readily realisable and liquid assets, the reduced rates must have a direct effect upon the earnings of the association. It might be suggested that the amount of funds thus held liquid was perhaps' large in relation to the whole of the association's assets, but the board had steadily kept in mind its responsibility to depositors.