GOVERNMENT INTERFERENCE

New Zealand Herald, Volume LXIX, Issue 21289, 16 September 1932, Page 15

GOVERNMENT INTERFERENCE

Sir, —There is some excuse, and even an amount of justification, for the action of the Government in arbitrarily fixing the rate of interest which shall be paid by. mortgagors, tho rents tenants shall pay their landlords, and other interferences with personal contracts; as tho avowed object was to enable the debtors to tide over the present extraordinary depression. But it cannot be urged that the same object is sought—or -could be gained—by Government interfering and determining the maximum amount of interest the Auckland Savings Bank may pay to its depositors. It is a notable fact that in all the Government schemes for "equality of sacrifice" the associated banks were left severely alone. They wei'e left to fix what rates would pay on deposits, what interest they would charge on mortgages and overdrafts, and what dividends they would pay to their shareholders, and' this Government did not dare to interfere or dictate to them. But with the people's savings banks, designed and carried on purposely to encourage thrift, the Government steps in, and, without mandate or reason, fixes the highest rate of interest the savings bank may pay at 3$ per cent, a lower rate than it is both able and willing to pay, and thus deprives the depositors of some of their interest, at a time like this when every penny counts. The same arbitrary interference with the rate of interest a trading concern may pay for money borrowed from people willing to lend it, has been enacted, and. in neither case, has one word of justification been attempted. Power to do such . things by Order-in-Council should never have been delegated by Parliament to anyone, but when this power is so manifestly abused (as in theso latest Acts) then that power should be curtailed, and the mischief righted as soon as Parliament. meets. J. Thornes. 231 Parnell Road.