POST OFFICE DEPOSITS.

Hawera Star, Volume XLVII, 29 August 1928, Page 8

POST OFFICE DEPOSITS.

LIMITING THE AMOUNTS. LABOUR CRITICISES POLICY. (By Telegraph—Press Association.) WELLINGTON, Aug. 28. The Hon. K. S. Williams moved, ill the House of Rop rose ntati vcs to-night, the second reading of the Post and Telegraph Bill. He explained that the Bill .was 'purely a consolidating measure and contained no new matter whatever. Mr M. J. Savage said he was glad to hear there Was no new matter in the Bill, 'but he supposed there was enough in the old Bill to keep them going for a considerable time. He then entered upon a criticism o'f section 82, which authorises the Minister to pay interest to depositor's in the Post Office Savings .Bank. He argued that the Post Office Savings Bank was not 'being used to the bes't advantage. By refusing to receive deposits of amounts over £2OOO they had driven that money into the coffer's of the private competing banks, whereas it might have been used by the State Advances office to lend to settlers. The policy of 'the Government had driven aWay from the public funds money Which could have been Wad at 3f per cent., and then, When the Government wanted to borrow itself, it had to pay 5J per cent. There were millions of money in that category. The Government had taken authority to stop investments leaving the Post Office Savings Bank by paying higher .rates of interest, but instead oJ using the power the House had given it it did the reverse and hia l refiused to pay any interests on large amounts. Mr J. A. L;e (Auckland East) said the Minister had not answered the question repeatedly put to him, “Why did the Minister take the power to attract deposits to 'the Post Office >Sav ings B'ank if he did not intend to use it?” The Opposition did not complain at the Minister taking power t;o attract deposits, but it complained because he did not. use it. From now onward it would be a question of whether they could accept the Minister’s statement, of his intentions. MINISTER ’S REPLY. The Minister of Finance said the point raised by Messrs 'Savage and Lee Wad been raised so often and answered so often that he could not help thinking they were speaking with their tongue in their cheek. If they Wad Watched .the course of .events they would have seen what was happening. In May, 1927, the private banks raised the rates of interest on deposits, but the Government did not legislate till October. By that time large sums of money which the Opposition said was driven out Wad already gone out and legislation was brought in to stop that sort of thing happening again. Mr Stewart Said he had been charged with not raising 'the rate of interest to depositors to attract deposits, but how could he rai'sc the interest on £50,000,000 just -because £2,000,000 Wad gone out? That would not Wave been a busniess proposition. The ease might have bpen different if £20,00,000 had gone out, but for a mere drop in the bucket the rates of interest .could not be increased to all the departments borrowing from the Post Office. The Government had not itised the power to pay increased interest because there was no need to do so. He would . have done so if large .sums had Continued to leave the Post, Office. Money was not now leaving- because the small depositor was not influenced bv the bank rate of interest, and matters were again normal. It was absurd to say the banks were dictating the fiWancinl policy of the country. The Government'. Wad taken the only possible course, which was a perfectly businesslike course. Mr G. W. Forbes thought the wh'ole difficulty with regard to the sudden withdrawals of large deposits might have been got over if a stipulation for certain notice 'before withdrawals Wad been made. With such a Safeguard as that he could not see any objection to the Post Office- Savings' Bank taking large sums on deposit. The Leader of the Opposition said the Minister had clouded the issue considerably. It Was well known th'at private banks were attacking the manner in which -the Post Office Savings Bank was conducting its business, and on that the Minister made a statement that interest would not be paid on the larger deposits. It was then tWat heavy •withdrawals took place, because there was noVcertainty What exactly the Government was gojng to do. TWat Was as clear as day, and that was the true explanation of what took place. The Hon. K. S. .William's, aeting-Postnraster-'General, in reply, siaid the Minister of Finance had covered most of the ground. There had been criticism on the Score of foil charges for telephone calls, but the New Zealand rates compared favourably With those of other countries. Every effort was made to keep the charges down in order to help the .country people. Tlie Bill was read a second time.