POST OFFICE SAVINGS

Evening Post, Volume CVI, Issue 8, 10 July 1923, Page 6

POST OFFICE SAVINGS

QUESTION OF INVESTMENT

AND SECURITY

COUNTRY BEHIND THE BANK.

Questions regarding the investment of I'ost Office Savings Bank moneys and the fixing of the rate of interest were asked in thve House of Representatives yesterday afternoon.

Tife Leader of the Opposition (Mr. T. M, Wilford) wanted to know what procedure was adopted in regard to renewing from the Post Office Saving Bank investments loans that matured, llns year there was £9,000,0C0 fall inn ?' ?,° \ enawa& !lt Home. He took it that all that, had to be done was that the Prime Minister consulted the Post-. master-General, and it was agreed th-L the loan should be renewed for live oten years and the terms were fixed li. look it, also, that no commissions and no brokerage fees were paid, and that ii was merely a-renewal of a mortgage between the Postmaster-General and the Minister of Finance.

NO DIFFICULTY. The Minister of Finance (Right lion sknnnn irifn Sfi! y),Said there .about £60,000,000 to be renewed during U'e next six years. About half of that was owing to Government Departments, it was just as difficult to renew loans due to some Departments as it was to those owing to the public outside. He was not finding fault with that.- because the Departments had to do what was right and look after the interests of their own Department. As far as the Post Office Savings Bank was concerned there was no difficulty. The Post Office Savings Bank would want money when withdrawals exceeded the deposits. Mr. Wilford: "You don't pay any money back. It is only a book entry. 5 ' Jlr. Maseey agreed-that no money was paid back. Where money was owing to .London or ur Australia it had to be paid Australia always wanted its money back and was the worst of any in that respect. When that happened the exchange, question became serious. .Included m the last four million loan was a million for redemption purposes. The Government was in possession of ;i considerable sum for' redemption purposes. Mr, Wilfora- :"What is the amount ot your unexpended authorities?" Mr. Massey replied that it was a considerable sum. .This year additional authority would • have to be taken fo'certain purposes. They were running out ot authority now because of the Advances Department. He proposed to q_sk Parliament, after consultjnjr the Department, for an 'additional ..authority for that Department's purposes! He did not know how far they were goinoto_ go in regard to public works auth' orities, which were .eoing to be bi°-o- e r than before because of flood damage."nnd he was afraid, also, because of "railway matters.' ■ • . .

MONEY FOR HOUSES. Mr A: Veitch (Wan'ganui) specially appealed to the Minister of Finance ' tv earmark Post Office Savings Bank i>ivestments to provide houses for the p«bple, and thus help to overcome the hoilse shortage Ho could not see that there was much trouble to be feared in retard to Australia, because only £15,500 had to be renewed there in- the next: three years. The amount-of money 'available to be renewed with the Post Office Sav™7^S^ year.,was ""Mess than 47,364,000. There was also a considerable sum of money to renew with other public Departments. Mr T. K. Sidey'(Dunedin South) asked what Jt was that determined the rate of interest the Government paid to the Post Office Savings Bank 'The Prime.Minuter used to say, "Why should., not the depositors in" the Post Offi ? e Savings Bank, get the. same rate of interest as the moneylenders?" He used also to ask why the'deposits should not be made available to'the farmers? Mr. Massej-nbw saw things in a different light, he knew, from when he was in Opposition. ■ It would be of interest " the House were told where the'menev' was invested. • ■ •'■'

■'• The .Postmaster-General (the Hon' J «... Contes] stated.that a paper he proposed to lay on the table showed-how money was invested. Tj.o present rate of interest on money in the Post Office havings Bank was 4 per cent, which was not bad for money on call. When be-took over the Post. Office the rale of. interest was only. 3i per cent. An Act of Parliament practically defined tlifi amount of interest that was to be paid NO NEED FOR MISAPPREHENSION? The Prime Minister said there need' be no misapprehension on the -subject lv addition to the ordinary securities, the security of the whole,country was behind the Post Office Savings Bank. J-he Leader of the Opposition: "Everybody knows that."

The Prime Minister: "Perhaps, but when those loosely-worded statements go out they very often cause a great deal of uneasiness, and it is very weir to put the matter right/ There was a very considerable sum in London lying idle as reserve against the Post Office Savings Bank. That could be called- upon at any minute. ■ - .

Mr. Veitch: ''Outside the£2.000.000?" The. Prime Minister: "Yes. ' Tho £2,000,000 is kept as a reserve,-being the liquid -securities' available at any time we require them. But. the question of the ordinary securities is small as compared with the security of tho country itself, and it is that which we really have in the.Post Office Savings Bank."