UNEMPLOYED CAPITAL.

Taranaki Herald, Volume XXXVII, Issue 8271, 18 September 1888, Page 2

UNEMPLOYED CAPITAL.

One hundred millions sterling lying on deposit in th 3 banks of a community of about three millions of people seems a very large sum, but tint, ia round figuee, is the amount now deposited with the leading Australaeim bankin< companies. To be exact, the (iopi<ut« at the end of June amounted to £90.724,722, or an increase of nearly £9,000,000 in two yean, and of this total no less thin £31,500,000 was not bearing interest. It is very significant that almost the whole increase in deposits in the two years was in the non-interest bearing class. Now there must he something out of joint when such lurge Bums are lying comparatively useless. Of oourse tho money is utilised to a greater or leas extent by the banks, who make their dividends largely from the difference in the rates of interest they pay to depositors and charge to borrowers. But that ie, at best, an unsatisfactory employment for such a lar^e amount of capital. The interest paid on it by the colonial borrowers nearly all goes abroad in the shape of dividends on bank shares, and this constitutes a la'ge annual drain on the colonies. It may be objected that if the money were lent direct from the ownerß to the borrowers the result would he tho same, but tnat in hardly so. In the first place much of this deposit money is owned by colonist?, not by foreign capitalists, and in the Beccnd place it is evident, in the face of the returns, that a very large proportion of it is held for direot investment in the colonies. The owners of over thirty millions sterling do not deposit their money with the banks without interest merely for the fun of the thin?. This money is evidently intended for investment in any promising undertakings which may turn up, and it is merely left with the banks for temporary safe keeping. The leading banks, indeed, do not seek after deposits bearing interest, even at the low rates now rulinsr, and rather make it a matter of favor to clients to I accept large sumb on fixed deposit. Their coffers are full, and more money is offered than they cara to employ. Thin is shown [ by the fact that the advances have by no means kept pace with the deposits. 'ho only colonies whore _ there has bron any market increase in advances nro Victoria and Queensland., while in Now Zealand j there has been an actual contraction of over £300,000 in advances in the last two 3'ears. There is a tendency to loose the purse strings now, and holders of satisfactory securities are readily accommodated on terms which would have been considered extraordinarily low n few years ago ; but on the other hand tho somswhut speculative advancps of a decade ago nre now entirely eschewed. Ciution \e, in fact, the watchword of the banks as well as of the ownprs of capital who are now pressing their money on thu banks al almost any rate of interest which may be offetel. It hns boon definitely decided by the local Firo Bri»alo not to send a team to the Inveroargill Djiuonttration, to be held in the early part of next yeat, as the distance is bo far that it would entail too great expense and loss of limn. As, however, there are some neven silver medals in possession of the Brigade for competitive purpose?, the Captain has decided to fix a day near l hristwns whereon \hn members will compete for them \h different events. Manilla paper bedolotheaaro bjing made in a Jersy oity factory. Mrs Cornelius Vanderbilt has twentyseven carriages for her own use. Tho King of Swedon while ia London RBBUtnes. tho title of O'ount of flaga,