THE MONEY STRINGENCY.

Gisborne Times, Volume XXVII, Issue 2446, 10 March 1909, Page 2

THE MONEY STRINGENCY.

STILL ACUTE. Last Thursday’s “Mercantile Gazette” says:—The monetary stringency continues and during the current month is likely to he emphasised, because three banking institutions close their accounts on the 31st instant, and it is usual for banks to- pull in overdrafts and do other things which in Stock Exchange slang is known -as “windoAV dressing.” The stringency is disclosed in the Rost Office Savings Bank accounts. During the second half of 1908 the AvithdraAvals exceeded the deposits by £62,949, while for the corresponding period of 1907 the deposits exceeded the AvitlidraAV-als by £515,792. For the year 1908 the deposits Avere in excess of AvithdraAvals by £256,254, Avhile 1907 exhibited a gain of £1,291,242. For the current quarter the AvitlidraAvals will again shoAV -a substantial excess, and it is to be feared that this will bo the feature of the year unless the Government steps in 'and increases the rate of interest to an extent to induce depositors to allow their funds to remain Avitli the department. But the experience of the Rost Office Savings Bank is not singular. The banking returns shoAved that the private banks had lost deposits, and'there is reason for believing that building societies a.nd similar institutions are also losing deposits Some of the joint stock companies have made a jn'actico of -accepting deposits, -and recently these concerns have offered very attractive rates for such funds.. The building -societies were thus forced to take some action. In Wellington these concerns were giving 44 per cent., for deposits fixed for t-Avelve months, and it Avas agreed to raise the rate to 5 per cent., but bank pressure Avas brought to bear on the societies and they were induced not to advertise the -higher rate. Some of the companies are -accepting, sub 1-osa, deposits at 5 per cent., and pressure has had to be exercised on the joint stock concerns to prevent them from forcing up the rates. If at the end tof the quarter the position shoAvs no change for the hotter it is just probable that the hanks may raise their deposit rates, Avhich Avould necessarily mean -a consequential advance in the overdraft rates. It is just -as well to prepare the public for this possibility. There is one feature that may exercise a favorable influence.. If at the next Louden wool sales, which commence on Tuesday next, tho 9th inst., the stajlc registers ,an advance, there may be a change in the views ?f bankers, and a higher rate may not be imposed.