REDUCING INTEREST

Wanganui Chronicle, Volume 75, Issue 139, 15 June 1932, Page 11

REDUCING INTEREST

SAVINGS BANK DEPOSITS FIXED MAXIMUM RESENTED AUCKLAND, Juno II Unwarranted Government interference with the policy of savings bank's and buildings and investment societies is alleged in connection with tho re-cently-gazetted regulations providing for a maximum interest payable on deposits. As far as Auckland is conI corned the effect of tho legislation will ibo felt mainly by depositors of the | Auckland Savings Bank. Many of the building societies in Auckland do not I handle deposits.

The action of the Government »* • strongly resented by Mr IL E. A’ailo, chairman of the board of trustees of the Auckland Savings Bank, who states that. the legislation was no’ sought by those whom it presumably benefits. He stated that his views could not ba regarded as those of the board, which had taken no active »»> *-110 matter. “As far us the Auckland Savings Bank is concerned there is no reason why we should reduce the rate of in- < terest to depositors,” said Air Vaile K 'stci lav “The bank formerly paid ! i

4J per cent., but this was reduced to 4J per cent, some months ago. There is no reason why the bank should not continue to pay at least 4 per cent., but. tho rate ar uow fixed at 3j| pox cent. This will brihg the rate into I line with that of tho Post Office Savings Bank.” Mr Vaile said the trustees apparently were to have no voice in tho matter. The lower rate of interest would create some hardship on many depositors, whose whole savings were in the bank. There had been no intention on the part of trustees to lower the interest rate, in spite of the lower interest which was now being received from investments in Government and other stock. r flie effect of the legislation would be % further means of ic'enue production

j for the Government, Mr Vaile said. It i would drive money to the Post Office , Savings Bank, would asaist the trading banks and would increase Auckland Savings Bank profits, thus allowing inj creased taxation, the latter result 1 was one which would bo directly con trary to the policy of the bank, which •sought to encourage thrift, and not U amass profits. Depositors, who ai ready indirectly lent a large sum of money to the Government at a low’ rate of interest, would thus bo called upon to give further moneys to P.