SMALL INVESTOR TO RESCUE

Southland Times, Issue 24766, 10 June 1942, Page 5

SMALL INVESTOR TO RESCUE

■ SUCCESS OF LIBERTY ! LOAN r ! During the final stages of the Liberty i Loan campaign the appeal for support r for the loan was directed mainly to the > small investors. They responded well and the result was that the loan was over-subscribed by more than £2,000,000. This appeal was necessary, not only to make the effort truly national, but also because the distribution of wealth in New Zealand is so comparatively even that the floating of a £15,000,000 loan demands substantial support from people of small or moderate means. There are not many wealthy people in New Zealand. The latest income i tax statistics available, those for the ■ taxation year 1938-39 published in the ■ New Zealand Year Book, 1941, show . that in that year only 1371 people in > New Zealand had an income greater , than £2,000 a year, and only 77 had an ; income of more than £lO,OOO. Of the ' 214,165 people who made income tax ; returns in 1938-39,111,983, or more than ■ half, had an income of under £3OO. ’ It must be remembered, however, that . many of these would be young people , without dependents, and that between the two extremes were 100,811 people with incomes ranging from £3OO to £2OOO a year. It is no doubt in this ’ class that the majority of small investors in the Liberty Loan would be found. It is estimated that of the sum of £675,000 contributed in Southland to the Liberty Loan about £320,000 was contributed by some 10 large investors. This leaves £355,000 contributed by 2,210 investors, an average of £l6O each. This figure is sufficiently low to suggest that the bulk of the money came from small investors. The returns from the post office, which in the main handled small investor applications for the loan, will, however, give a better indication of the average subscription by this class of investor. The two rush days for loan investments at the post offices were June 2 and 3, when the offices in the Invercargill postal district handled 538 loan applications. The total amount of these applications was £58,330, giving an average of £lOB. INDIRECT CONTRIBUTIONS Although an analysis of the figures suggests that the bulk of the sum of £355,000 was contributed by small investors it would be a mistake to suppose that the balance of Southland’s contribution, £320,000 came from the wealthy. The reverse, in fact, is true, for the bulk of this portion of the loan was contributed indirectly by small investors. The biggest single contribution in Southland came from the Invercargill Savings Rank which invested £200,000 in the loan. However, as Mr W. A. Ott, chairman of the Invercargill National Savings Committee pointed out the other day, the Invercargill Savings Bank is a bank of small depositors. There are 26,000 depositors with an average deposit of only £63 each. Similiarly, the Southland Building Society, which contributed £50,000 to the loan, is supported very largely by people of small or moderate means. Savings banks and building societies represent co-operative efforts to achieve I certain ends which those who support I them are not wealthy enough to achieve as individuals. The same is true to a large extent of insurance companies. The majority of the policy holders in any insurance company are people of small or moderate means. Various local bodies in Southland, such as the Southland County Council, the Southland Hospital Board and the Invercargill City Council made substantial contributions to the Liberty Loan. These bodies depend on ratepayers, few of whom are wealthy, and their contributions may, therefore, be regarded as indirect contributions from the people of small or moderate means. When all these factors are taken into consideration it will be seen that the success of an undertaking such as the Liberty Loan depends in the last analysis not on the banks, insurance companies or commercial firms, or on wealthy individuals, but on the thrift and prudence of a large section of the population ranging from comparatively poor to well-to-do, for it is on this section that the financial stability of the country depends.