SAVINGS BANK INTEREST.

Auckland Star, Volume XLIV, Issue 83, 8 April 1913, Page 9

SAVINGS BANK INTEREST.

EFFECT OF INCREASED RATE.

(By Telegraph.—Own Correspondent.)

CHRISTCHURCH, this day

The rise in interest to be paid on doposits in the Post Office Savings Banks after May 1 will not affect tlie Government's borrowing from the Savings Bank, as a statement to that effect was made by the Postmaster-Genernl yesterday. "The policy of the Government in the past." Mr Rhodes said, "has been to borrow all the money that was available, and when there is enough money available the Government will continue to use it. The idea of the Government in raising the rate of interest was to give to the people with small capital the benefits of the present rates of interest on money, nnd 1 think that 33 per cent is a fair rate."

"There is no fear that the increased benefits to depositors will result in capital that is now free being deposited, and thus assisting to maintain the present stringency?" he was asked.

"I don't think that will be the case,'' Mr Rhodes replied. '"The experience of the past does not support that view. When the rate of interest was increased previously it was thought that there would be an influx of deposits, but there was no chance. I do not anticipate any increase in the deposits as a result of the higher rate."

Dealing with ' the possible effects on the other banks, Mr Rhodes remarked that he thought the other banks were paying as much as they could on deposits at present, and he did not think that there could be any advance in the rate paid by them. There was absolutely no fear that the action of the Government would tend in any way to assist in an advance in the rate of interest generally.