ORDER-IN-COUNCIL

Auckland Star, Volume LXIII, Issue 136, 10 June 1932, Page 5

ORDER-IN-COUNCIL

COMMENT BY MINISTER,

SCOPE OF MAXIMUM RATES

In commenting on the Orders-in-Council which fix the maximum rates of interest that may be paid for deposits by savings banks, building societies, investment societies, and trading companies, the Minister of Finance, the Hon. Downie Stewart, stated that the maximum rates prescribed —except in the case of savings banks —applied only to new deposits and renewal of existing deposits. The rates fixed for building societies and investment societies (which under the Act includes all companies other than trading companies, societies, or associations, whether incorporated or not, formed for the purpoee of investing borrowed moneys) are for comparable periods £ per cent above those recently announced by the Associated Banks. The maximum rates for stock and station agents are in turn £ per cent above those for building and investment societies.

"These rates," added the Minister of Finance, "were decided upon as being equitable to all concerned after a careful review of all the available information and considerable discussion with interested parties. While the Government is anxious to bring down interest rates, it does not desire to discourage savings or diminish the funds available for financing trade and industry.

"No limitation of rates has yet been applied to deposits accepted by merchants and trading companies, apart from stock and station agents. The reason for this is lack of information as to the rates and terms of deposits at present held by trading companies generally. Although it is known that the practice of accepting deposits is fairly general, very little information was supplied in response to my public invitation published in the Press of the Dominion. Under these circumstances, the Government might perhaps have been justified in proceeding without more ado to fix maximum rates for all trading companies, but as it is not desired to hamper trade any more than can possibly be helped, it was deemed advisable to hold the matter over until the information that will be contained in the first lot of returns of deposits required under the Act has been analysed and reviewed."

The Minister takes the opportunity of reminding societies, companies, firms, or businesses, holding deposits, of the provisions of the National Expenditure Adjustment Act, requiring audited returns of deposits on the first day of cacli quarter. The first of such returns must be prepared on July 1 and be transmitted to the Minister of Finance within 21 days. In the first instance, however, he would ask that all such returns be posted or delivered to the Secretary of the Treasury, Government Buildings. Wellington.