The Hastings Standard Published Daily TUESDAY, AUGUST 10, 1897. THE POST OFFICE SAVINGS BANK.

Hastings Standard, Issue 395, 10 August 1897, Page 2

The Hastings Standard Published Daily TUESDAY, AUGUST 10, 1897. THE POST OFFICE SAVINGS BANK.

For the cause that lacks assistance, For the wrongs that need resistance, For the future in the distance, And the good that we can do.

Quite recently we wrote condemning the high rates of interest paid by the Post Office Savings Bank. The point to be remembered about this institution is that all deposits are at call, and the money lodged must be utilised or invested in some way by the department in order that it may pay its customers the stipulated rate of interest. This rate, as we pointed out, amounts to per cent, on sums up to £2OO, and 3 per cent, on sums exceeding £2OO but not exceeding £SOO. Over that no interest is paid. Now it may bo taken for a moral certainty that no deposits over £SOO are lodged, for the simple reason that those commanding any such sum can obtain interest by placing the money with one or the other of the many banks and building societies. r £he rates P P° sfc Office Savings Bank are beyond the power of the Department; that is to say, the money cannot be invested to return per cent, and pay costs of management. That the deposits are payable at call increases the difficulties of profitable investment. If there is any loss, and that seems inevitable, then the loss falls upon the taxpayers of the colony. The chief reason for the existence of the Savings Bank is to encourage thrift, to place at the disposal of the laboring classes a bank that will receive their savings, however minute they may be, and allow them interest on such deposits. The principle is acknowledged all over the world as being good and sound, but it was never contemplated that the depositors in the Post Office Savings Bank should be the recipients of charity, for that is what it really amounts to. If the State pays more for the money than it can possibly earn with it then surely we may say it acts with benevolence.

Now is this right ? Is this just ? Is it necessary ? That it is not right can be readily seen, and that it is unjust is manifest, because the majority of the community are taxed for the banefit of the few. As to the necessity of paying high interest, looked at from a strictly commercial point of view it is unnecessary. We do not for one moment believe that the customers of the Post Office Savings Bank desire anything more than what may be classed as fair, and if the department is unable to pay more thaD 2 per cent we have no doubt depositors would accept the same without murmur. The necessity for paying the high rate may be viewed from another point. If the Government are using the funds of the Post Office Savings Bank for the services of the State, then there is good reason why the high rate should prevail. The Government under such circumstances would not onlj wish to keep as much of the money as possible, but would endeavor to attract more, and this seems to be the case. The funds of the Post Office Savings Bank are being used by the Government, not directly but in a round-about way, and as more money is needed concessions must be made to attract an increasing number of depositors. Thus we find that for the future interest will be paid without restriction as to the amount of the deposit on ail sums lodged by the trustees of any savings bank constituted under the Savings Bank Act 1858, or of any legally constituted friendly, charitable, or provident society. This means, if it means anything, that the Government stand in need of further funds aail -hope to raise the money by this method. It is a pernicious form of borrowing, and much to be deplored. It may be argued .that it is sound policy to encourage benefit and provident societies, and a little extra interest is neither here nor there. If encouragement is necessary surely these excellent societies couid

make use of the privileges under the Consols Act, and invest their funds in New Zealand consols. If that were done it would be better for the colony, for then the money would be fixed for a definite period. But Friendly Societies do not care for consols, because of the fixity of the investment, and therefore the only way the Government can get hold of the money is by offering them the inducements which we have stated. Are Friendly Societies entitled to special considerations which involve a tax on that portion of the community that are not connected with such societies ? It is a question that will have to be threshed out on the floor of the House.