A FALSE SUGGESTION

Dominion, Volume 7, Issue 2131, 24 April 1914, Page 6

A FALSE SUGGESTION

The attempt, which has been made' to create the impression that tie : Massey Government is iu some way responsible for a falling oft in Post Office Savings Bank deposits is almost on a par with the action of one of the more stupid of the fircbraads at the time of the late strike, The'individual referred to, it -will perhaps ho recalled, urged that on a given day all in sympathy with the strikers should endeavour to embarrass the Government by withdrawing any moneys they might have on deposit at the Post Office Savings Bank. The idea that anyone could be benefited by creating a run on the State Savings Bank—in other words, by asking the people to embarrass themselves through their own institution—was so eolossally stupid that even at that time of heat and ferment no otto was mad enough to follow the advice- tendered. Members of the Opposition and some of their journals, however, continue to trespass on dangerous ground by attempting to sow seeds of distrust amongst the more ignorant of the public concerning the position of the funds of the Post Office Savings Bank. Keplying to criticism of this nature, the Minister of Finance recently remarked on the improvement that had taken place of late in the matter of deposits and withdrawal's, incidentally pointing out the falling off which ha-d happened just prior to the Government taking office. Needless to say, his remarks produced the customary outburst from certain Opposition journals, and a mass of figures presumably designed to show hew little confidence the publie has in'the Masses' Government. We have no sympathy with any party which attempts to securea political advantage regardless of the effect its. action may havo in prejudicing the safe conduct of the financial affairs of tho country, and in this connection it is very obvious that the.business of the Post Office Savings Bank should not be made a centre of conflict between contending parties. _ Bat since the attempt has been made to create the impression that there has been a weakening of confidence in the institution because the Massey Government is v in office, it is jnsfe as well that tho falseness of tho suggestion should be exposed. The method followed by the opponents of the Government has been to take certain quarterly . returns after the MassCt Government came into offi.ro. when tho withdrawals exceeded the deposits, and quote these as proof of lack of confidence- in the Government. It is, of course, a well-known fact that quite a considerable amount of the money deposited in tho Post Office Savings Ba*ik is placed there not as savings in tho ordinary acceptance of the term, but simply awaiting investment at a. higher' rate in ontside securities. As is now generally known, the demand for money the world over became excessive shortly before the Massby Government came into office, and the inflation of tho current market rates, in sympathy with this outside movement, afforded tho opportunity for more profitable use of th* money deposited with the Post Office Savin crs Bank. Tho withdrawals of fnnds from the institution, which followed as a natural eonsemiencc of this stateof things, was checked by the simple prooess'of bringing flic; rate of interest paid on deposits into harmony with the rate ruling in the open market. It, of course, does not suit the critics of the Government to take the position as they find it today. They sekc on the brief period when the sudden demand for money led to heavy withdrawals, and quote it, in the hope of misleading the public as to the true meaning' of the situation. The outstanding fact is that never at any time since 1894 up to the present day have the withdrawals in any one year exceeded deposits. ■ Moreover, the halanec p of (leposits over withdrawals during the last 'P-iai'kT of the -Ward Administration's term of office, and the

ilifilaiiccSvchiring'' the last and vnly qiihrtiM of,;'.the" Mackenzie Adminislratiriivs'" f t'cn])'" : of .office, . both company unfavouralily-.witli the balance ,shown jin , ' i .tho. last: fiiiartcivi; of.'--the 51 arsey Govprnmorit's-'.terniVof office."' That'there' shall he .rio, ; doubt.oitfihis-' point, .wc quote .the bflicial..figures lor the. quarters stated:.— ■■■'' " " : v* ~. .■ . ."'- '"■ Kscflis of' d-eposits. Ward' Administration— *■•£"■■ January 1 to March 31, 1012... 195,789 Mackknzik Administuatios-—' April 1 to July 7, 1912 152, V» Makbey Admisistkatiok— : '. . January 1 to aftircli 31, »l-t... 291,143 The Ward Administration actually left office on March 28, but this docs not affjicfc the position. The plain and indisputable fact is thai; the latest Available figures show that the -excess of deposits over withdrawals .was greater in the quarter ended March 31 last than in any quarter during the past two years, including, of course, the last two oua-rters oi the Liberal regime. Wo do not suggest that the Masse? Government is deserving of any particular credit for this, but- since the opponents of the Government have attempted to create the impression that confidence in tho Post Office Savings Bank has been shaken owing to iho advent to office of the Reform Government, it is desirable that the true position as it is to-day should be clearly known.