THE POST OFFICE SAYINGS BANK.

Evening Star, Issue 2988, 16 September 1872, Page 2

THE POST OFFICE SAYINGS BANK.

To the Editor. Sm, —“Master Humphrey’s’’ onslaught on what promises to become an important national institution—the Post Office Savings Bank—is mischievous in the highest degree. While he addressed himself merely to the denunciation of a Ministry, and tortured his energies to misrepresent them, his observalions were perfectly harmless, To men unaccustomed to accept statements for facts, the pitiful shifts resorted to to degrade public men were too transparent to need contradiction —they carried their own refutation with them. Nor should I have deeim d “ Master Humphrey” of sufficient importance to notice his strictures, if they were not designed to shake the faith of the timid and unthinking in our national securi'i's.

Master Humphrey” sets out with the s atemcnt of the Duke of Wellington, that “ High interest is but another name for bad security/’ and because he discovers that the Bank interest averages two and a-haJf per cent., and the Post Office Savings Bank offers four per cent., therefore the latter is n ces-arily had security. This conclusion I confess brings no conviction to my mind. That the Duke of Wellington was right in the statement above quoted, may he admitted, but it does not prove what “Master Humphrey ” endeavors to make it prove. If the real value of money be as it is assumed to be at Home, live per centum per annum, then if a higher rate of interest be offered than the current rate, it may not be unfair tp assume that the security is questionable; because good security is not required to give abnormal interest. ' This position may bp best illustrated by a quotation from “ Master Humphrey’s’ own letter Imagine a man engaged in mercantile transactions—the nominal owner for example of a lino of steamships employed in a trade notoriously unprofitable. Let his private expenditure be extravagant beyond example, and add to that the fact of his being overwhelmed with debt to meet the interest of which he is constantly compelled to seek fresh loans : in such a case, with the facts before him, would any sane man be tempted to advance money as a loan by the offer of high interest. ” Not precisely ! Ten, twenty, or thirty per cent, would hardly under such circumstances prove a sufficient temptation. It is such circumstances that amply justify the Duke of Wellington’s stat pinout,; ■ but do tjiey justify “ Master Humphreys ” ? I think not. There is no analogy between this hypothetical case and the case of our Post Office Savings Bank. The one case offers the security of°a bankrupt adventurer; the other offers the national security—the honor of the people. Dishonest men may repudiate their just obligations, but honorable men will always meet them. Nor do I see any reason, in view of the increasing prosperity of our land, to apprehend the repudiation of our national liabilities. But to revert to our main argument. High interest is a relative not an absolute term. The rate of interest paid by the Post Office Savings Bank is not high, certainly not higher relatively than that paid by the Government' Savings Bank at Home. The price of mousy like pysryt&ng ebe is determined by the quantity. In Great Britain’, whf?rfc money is plentiful, two and a half percent, is given by the Post Office Savings Banks, while the normal rate of interest is only five; here the Government allow four per cent., while the current rates are from eight to ten. No one will advance money on the very best freehold see irities here at less than eight or ten per cent., because yjth a comparative paucity of monej' it is worth this per ceniage. Now while from eight to ten per cent, be the admitted current rates of interest here, by what right is it said that four per cent, offered by the Post Office Saving-! Bank is high, and therefore the security bad? Poes not “Master Humphrey” know that the Home Government pays to small inventors with a view to induce habits of temperance, prudence, and thrift, a larger rate of interest than they poul'd secure from the banks ? Does he not know t'hftV thfj institution Wo/m admirably at Home ? Then by what right does }:o the laudable efforts to establish a cog r nate institution here ? Does he not see that, while endeavoring to shake public faith in the national security, he is casting a slur upon the national honor ? But enough. Small ca; italists will not need the guidance of “Master Humphrey” in a matter so nearly concerning themselves as the judicious investment of their savings, nor will they be deterred by his ridiculous doubts from availing themselves of the perfectly safe means of investment provided by the Government and guaranteed by the people—the Post Office Savings Lank.—l am, &c., Buoij, Dunedin, Sept. 14.