DOMINION FINANCE.

Hawera & Normanby Star, Volume LXXIV, Issue LXXIV, 3 August 1917, Page 4

DOMINION FINANCE.

RESERVE FUND.

In last year's Budget, says the' Minister tor Finance. I announced that a special reserve had been established in London for the purpose of meeting possibie sudden demands resulting from *6 %?& „ * felt -tilid: the reserve fund or £800,000 ordinarily maintained in London was insufficient under the present unusual conditions, and I'have invested in London out of surplus revenues a sum of £3,917,731 for this purpose.

The public has been, placing a large amount of its cash at call with the post office, and I fe.el convinced that when peace is declared a very considerable proportion of these deposits will be claimed. We have been borrowing these post office deposit moneys for war purposes and other local needs, and it. is probable that the consolidated fund may after the war, have to re-purchase some of the securities it has given to the post ! office to enable the Postal Department to meet its obligations. Since the war began we have borrowed approximately £10,000,000 from the post office. This is apart from the sum raised by the post office on fiveyear war certificates. After peace is declared it is probable tnaifc increased internal developments and business activities, together with the necessity of repairing the world-wide damage caused by the war, will create a great demand for money, and it would be cheaper for the Government to have its own money for use then than to borrow. It must not be forgotten, however, that the post office call-moneys are still accumulating and must be invested. At the end of the current year the total borrowed and invested by the Treasury from the post office will, in all probability, largely exceed £10,000,000. I trust honorable members and the country will recognise how important it is to have each-dear's surplus of revenue during the war invested and held for repayment to the depositors in the post office, and should events 6how it is not for that purpose tiien it should be used for paying off war advances from the Imperial Government. The above £3,917,731 has b.een invested in Imperial Government securities, which can, of course, be realised if the necessity t© do so should arise.' The important fact remains that we have a strong reserve fund in London.