NEW LIGHT ON POST OFFICE SAVINGS FIGURES.

Timaru Herald, Volume CXLIV, Issue 20969, 23 February 1938, Page 8

NEW LIGHT ON POST OFFICE SAVINGS FIGURES.

Within recent years the people of New Zealand and indeed the people of all the principal countries have become so accustomed to witnessing the dizzy dance of tens of millions and even, in the case of the United States, thousands of millions, that the statement issued by the Postmaster-General of New Zealand dealing with the Post Office Savings Bank deposits is not likely to make a very deep impression. The Postmaster-General on his part claims, as the Cabinet colleagues repeatedly claim, that the volume of transactions of the Post Office give a plain indication of the prosperity or otherwise being enjoyed by the country. This may or may not represent a careful analysis of the causes and effects behind the statistical story of the business of the Post Office Savings Bank; indeed, an accumulation of deposits in the savingsbank where the money earns interest, while at call until the depositor wishes to make withdrawals, may demonstrate not that the country is prosperous but that a measure of lack of confidence suggests to investors to take less interest and await developments. The Postmaster-General, on his part, insists that an abnormal increase in deposits over withdrawals in the Post Office Savings Bank presents definite and incontestable evidence of the general prosperity of the people of the Dominion. This deduction can not be made without knowledge of the nature and amount of individual deposits flowing into the Post Office Savings Bank. In former years, the Government placed a limit up to £5OO on the sums that could be deposited, because experience had shown that depositors were making a practice of using tiie Post Office Savings Bank as a convenience for temporary deposits of fairly large sums of money awaiting investment to the obvious disadvantage of the savings bank. This limit has since been raised to £2OOO. The Postmaster-General, however, is content to accept the plain figures as they stand and draw his conclusions which are directed, of course, to emphasising the claim of the Government that the figures of the Post Office Savings Bank provide the country with an accurate barometer of the economic conditions of the Dominion. The Minister proceeds to make much of what he describes as the abnormal increase in deposits. “The amount of excess of deposits over withdrawals for the year 1937,” the Minister announces, “is £1,342,795.” This means, the Postmaster-General says, that the people of New Zealand have added to their accounts nearly £4,500,000. On the surface, the Minister’s deductions would seem unassailable. The Minister knows quite well that the average New Zealander will accept the official interpretation of the I’ost Office Savings Bank figures, but if anyone cares to- subject the Minister's figures to a critical analysis they will make the interest ing discovery that although the excess of deposits over withdrawals runs into nearly £4,500,000, the so-called ilemonstration of very general prosperity represents an average increase in the savings of people of less than 2/per week per depositor. In other words, the 912.608 depositors who have accounts in the Post Office Savings Bank during the most prosperous year the Dominion has enjoyed for many years, have added to their savings in twelve months by £5 each. The Minister, moreover, indicates that something like £1,500,000 has been added to the accounts as interest payments. This represents something like 8d per week per account. One or two aspects of the Savings Bank deposits which were not discussed by the Postmaster-General, call for comment. The first is the unpleasant topic of the depreciating purchasing power of the savings of the people because of the rapidly rising cost of living, and secondly, the use of the people's savings to pay for building railways that will never pay their way. In other words, as the Mayor of Waimate pointed out some weeks ago, the people of New Zealand may yet find themselves in the position of being taxed Io pay interest on their savings!