FUNDS ON DEPOSIT

New Zealand Herald, Volume LXXI, Issue 21855, 18 July 1934, Page 7

FUNDS ON DEPOSIT

BANKS' CAUTIOUS POLICY PROBLF.M OF RE-INVESTMENT MONEY AWAITS REPATRIATION Reluctance to accept large sums of money on fixed deposit is a phase of present banking policy in the Dominion, brought about largely by an accumulation of private funds and the restiiction in profitable avenues of investment. Inquiries in the commercial community fail to reveal specific cases of deposits having been refused, but it is geneially accepted that bankers look askance at this business when offering in heavy amounts. Tho re,a son for a cautious policy is tho substantial increase in deposits held by tho banks, which find some difficulty in employing tho funds to advantage, ibis in turn is duo to a variety of causes hinging on tho general uncertainty in trade and economic conditions. Generally speaking, holders of funds arc more concerned with tho safety of their capital than in securing an adequate return on it. Many have been prepared to lodge tho money with the banks at interest rates as low as 1J per cent, or even on current account, which in effect transferred the onus of investment. Tho banks at first showed no uneasiness, but, as uses for the money became scarce, it was necessary to revise tho free and open policy. It does not appear that the banks aro working on any very definite line of action. Tho circumstances of each caso seem to receive consideration, so that individual business is treated on its merits. When confronted with an offer af a large amount tho banker looks to the opportunity for reinvesting it and is guided largely by this. Where in the past a banker may have looked twice at an overdraft, ho now looks twice at a deposit, although it is not suggested that strict banking principles have been sacrificed in tho process. The banks take an unfavourable view of actions likely to hinder the true operation of the high exchange policy. This is reflected in the restriction on capital transfers at a premium from Croat Britain, and it also finds expression in dealing with deposits. Funds estimated at about £3,000,000 are being held in New Zealand pending a fall in the exchange rato and the banks, it is understood, see no reason why they should carry these funds until holders see fit to remove them. Bankers point out that the money is a deadweight in the investment market and that it would have been repatriated under ordinary conditions.

Discussing this aspect of the position a banking official said yesterday that Australia was credited with a shrewd move when similarly placed. An "authentic" rumour was started that the exchange rate would be lifted to 30 per cent or more, and there Avas an immediate rush to get capital out of the country. The effect of the recent reduction in fixed deposit rates remains to be seen. It is stated that, judging from the return on short-term investment in other countries, a further fall in rates is not beyond expectation.

PRICES OF METALS SLIGHTLY EASIER TENDENCY (Received July 17, 7.35 p.m.) LONDON, July 1G Following are to-day's quotations on the London metal market compared with those of July 13:—

GOLD AND SILVER QUOTATIONS IN LONDON (Received July 17, 7.35 p.m.) LONDON. July 1G Fine gold is quoted to-day at £6 17s Hid an ounce, compared with £6 ]Bs on Saturday. Silver is quoted at 20£ d an ounce spot, and 20 11-lGd forward, compared with 20|d, and 20 11-3Gd on Saturday. The quotation for silver at per fine ounce is 22-Vd, compared with 22 3-16 d on July 13.

Following is a summary of the fluctuations in tho price per ounce of fine gold this year: — fed Highest price, Feb. 5.. 7 0 0 Lowest price, Jan. 9 ~ 6 G 84 July 10 6 18 Of July 11 ~ . . . 617 11 July 12 G 17 lli July 13 . . .. .. 618 OJ July H 6 18 0 July lli G 17 lli NEW ZEALAND APPLES FIRM LONDON MARKET LONDON. July 16 Apples are firm. The Port Hobart's New Zealand sold as follows: — Stunners, 8s to 9s 6d a case; Doliertys, ]os to lis 6d; Statesman, 9s to 9s 6d; Yates, 10s; ltomcs. 9s 6d; Granny Smith, 12s 6d to 15s. EXPORTS DECLINE NEW SOUTH WALES STATE SYDNEY, July .17 Exports from Xew South Wales during the year ended .Tunc 30 last were valued at £43,526,4(35 in Australian currency, a decrease of £3,145/176 compared with tho previous year. Smaller exports of gold account for the decrease.

RABBITSKIN SALE AUCTION AT WELLINGTON An attractive catalogue was submitted at the third rabbitskin sale of the season, held last week by tlio combined Wellington brokors. There was fairly good inquiry on American account for bucks, prices showing an improvement 011 late Quotations. Does sold well up to tli" level of previous rates. Other grades sold in tellers' favour. Skins are now coming forward froely to store, and, with the cold weather lately experienced, same good lines for winters were submitted. Super winter bucks sold up to 78d, first winter bucks to 71d, first early winter bucks to G4Jd. super winter does to 3Gid, first winter dors to 33Jd. outgoing bucks lo 35d.

Tlio following is the range of prices (per ]b.)Smalls, 2d to 3d; runners, to 6d; racks, 9Jd to 103 d; dawny autumns, lid to 12d; early, 15Jd to 16d; late, IGJd to 23d; first incomings, 31 d to 3Gd; second, 27d to 29} d; winter broken, lOd to 18d; second, to 3d; third, Id to 6d; outgoing bucks. 27id to 35d; docs. IGJd to ISJd: first early winter bucks. Gll d; does, to 29id; super winter bucks. 7Gd to 78(1; does, to 30Jd; first winter bucks, 72d to 7fid; does, to 93Jrl; incoming and early winter blacks. lf>ld lo lfild; winter, to 23d; autumn, IOJd to 12d; springs, 7Jd to 12d; summers, Gd to 73d; hares, fid lo Gd; milky, 7Jd to Bid; broken, blood-stained, and flatBlretclacd Bkins sold at low rates.

July 16 July 13 Per toil. Per ton. £ s d £ s d Copper, stan., spot . •29 9 4} 30 0 1\ Copper, stan., 3 mos. 29 18 li 30 G 101 •Copper, electrolytic . 32 10 0 33 0 0 to to 33 0 0 33 10 0 Copper, elect., wire bar 33 0 0 33 10 0 Lead, soft, spot 10 17 6 10 15 0 Lend, soft, forward . 11 2 f> 11 0 0 Spelter, spot . . 13 3 9 13 6 3 .Spelter, forward 13 10 0 13 12 6 Tin, stan., Bpot . 230 11 230 13 9 Tin, stan.. 3 rnos. 230 1 3 230 1 3 *American 9 cents a lb