Untitled

Pahiatua Herald, Volume II, Issue 192, 22 August 1894, Page 2

I 1 hf. bank rate of intoront on deposit# has at last boon reduced. It was only last Friday that we oallod attention to tin. novel feature exhibited by the

banks of this colony in maintaining high deposit rates and restricting ■dvances, while at the same time the vaults were full of coin. The reduction announced is as follows, Union Hank. Bank of Australia, and Bank of New South Wales, 4 per cent for 12 nonths and 24 per cent for G months. The Bank of New Zealand reduction amounts to 4 per cent all round, the 12 months’ rate being 14 per cent or £ >:r cent more than the Australian banks. No action on the part of the Jolonial Bank or the National Bank • s mentioned, and we may presume that these two institutions adhere to 'he old rate of 5 per cent for 12 . aonths. It will be noticeable that the banks have departed from the old custom of concerted action for a go-as-you-please movement, and the change is not calculated to inspire confidence, on the contrary it is a direct incentive for want of confidence. When banks reduce the rate of interest on deposits the inference is that they dc not require money. This position would appear to be reached by the three Australian banks, only partly so by the Bank of of New Zealand, while the other two institutions seem not to be in it. The effect of this on the public mind is to cause distrust, for if bankimg was run in safe channels, unanimity would prevail. We beiieve the abandonment of the old style of joint action is answerable for much of the uneasiness prevailent in commercial circles, although perhaps no real ground for it exists. It is, however, pleasant to note that a reduction has been made for it will tend to divert money into productive channels, and thereby galvanise trade and business. A cloud of rumours still hangs over our financial world, and until they are dispersed we shall not see the sun of prosperity.