MONEY MARKET.

Wairarapa Daily Times, Volume LVIII, Issue 8940, 14 December 1907, Page 2

MONEY MARKET.

(New Zealand Trade Review.) The Chairman of the. Bank of New Zealand, at the recent half-yearly

meeting of that institution, uttered a word of warning and a note of complaint, as to the growing habit of certain trading companies and associations, which trend) upon the busilfcss of the banks by inviting and accepting deposits at interest and giving interest on balances of current accounts. He pointed out that jwhile banks are compelled by law, for the protection of $

the public, to hold coin reserves in a certain proportion to their liabilities, no such obligatiou rests upon the trading bodies referred to, a position which involves an element of possible danger in case of a crisis. The effect on the money market is similar to that caused—and in a greater degree —by the Post Office Savings Bank, which in the two last years has ab

sorbed over two millions of the floating funds of the community, and now holds about £11,000,000 of such deposits, while the fixed deposits of the banks are not only not increasingbut in the latest twelve-month show a falling-off of over £250,000. While the supply of money in the Dominion is still good there is an evident tendency to an increase in the demand and if the sources of supply are to be diverted from the banks their power of affording finaucial assistaune may

be in danger of being crippled or at least restricted, and thus the price of

money be forced upward. Theragran be no doubt that a portion of the deposits now drawn to the Post Office Savings Bank by the

ever-widening scope of its operations is not in the character of funds'for which that institution was designed.