NOT DRIVEN AWAY

Evening Star, Issue 19952, 23 August 1928, Page 11

NOT DRIVEN AWAY

P.O. SAVINGS BANK INVESTMENTS STATEMENT BY FINANCE MINISTER [l'noa: Our Parliamentary llei-orter.] WELLINGTON, August 22. Fads and figures wero quoted by tho Minister of Finance (tho Hon. W. Downie Stewart) in the House of Representatives to-day to disprove of the Labour allegation that he had driven investments away from the Post Offices Saving Bank as a result of the reduction in the maximum deposits on which interest will be paid. “I staled quite recently,” said the Minister, “ that it was quite improper to accuse me of having driven these moneys out of the Post Office Savings Bank, because tho moneys were, for tho most part, withdrawn before any action to alter the legislation was taken. Tho dates of the withdrawals will show how far it was true that the money had gone before I started to lock the door.”

The Minister recalled that the banks raised the rate of interest on May 9, 1927, and the legislation reducing the maximum amount on which interest would be paid by the Post Office Savings Bank was not introduced until October, 1927 From May to October, the period before the introduction of the legislation, the excess of withdrawals over deposits from the Post Office Savings Bank amounted to £2.321,571. Mr M. J. Savage (Auckland West): Then why was the legislation neeessaiw ?

The Minister: Because 1 wanted to have power to prevent getting into the same position again. I did not want to have thorn coming in and out at their convenience. 1 never anticipated that wo would get out of it as quickly as we did. I thought ‘it would be a gradual process. The Minister explained that for the period between November, 1927, and March, 1928, after tho law had been amended, the excess of withdrawals over deposits was only £508,574. Tho Leader of tho Opposition (Mr TI. E. Holland): Was it not in June, 1927, that you made your statement foreshadowing the legislation to reduce tho maximum deposits? The Minister: I mentioned it before tho legislation, but T don’t remember the date. After the reduction became operative in April last the excess of withdrawals over deposits jvas £527,000, as compared with £745,000 in the corresponding quarter of last year, before anyone thought of reducing the maximum. The Minister denied the truth of the assertion that tho Government now had to pay 5J pc’ 1 cent, of money which it had had in the Post Office at 3J per cent.