THE SAVINGS BANK.

Gisborne Times, Volume XXIII, Issue 1910, 20 October 1906, Page 4

THE SAVINGS BANK.

THE HATE OK INTEHEST. (Special to Times.) Wellington, last night. Hie Joseph Ward his introduced a Post OULco Act Amendment Bill. The Colonial Treasurer is to bo empowered to pay to each dopoaitcr in the Post Office Savings Bank intorost as follows (a) on bo much of his deposit as does not excef d £ISOO, a rate of five per centum, and (h) on so much thereof as exceeds £3OO and does not exceed £OOO a rate of four per centum, provided that in the case of savings banks under the “ Savings Bank Act, 1858,” and of legally constituted friendlj', charitable, or provident societies, and such other non-mercantile societies as the Government from time to time by Ordor-in-Conncil prescribe, the aforesaid limit of £OOO shall not apply. Except in tho case of the aforesaid savings banks and societies no interest shall bo allowed to any depositor on more than £OOO.

In view of the foregoing provisions for increasing, if tlie Treasurer sees lit, (lie interest rates of the Post Office Havings Bank, some remarks in the latest number of the B’ew Zealand Trades’ lleview issued tho morning before the Government Bill was made public, will bo read with interest. deferring to tho plethora of money available at the present time in Aue* tralia and New Zealand, the review points o it that the produce season upon which vo are now entering promises ho' liter Vustralia ami oiv Zealand a profitable issue, biinging with it further eddi ious to tho funds of the the colonies m the next six months.

“ Curiously,” adds tho Rev ew,” t his flourishing' condition does not bring with if, any general reduction in the price of money, and tho reason of this departure from the ordinary effect of tho law of supply and demand, is to be found still more strangely in the action of the Government, one of whoso aims and boasts has been in tho past to see that tho settlers get cheap money. The effect of the higher rates given by the Post Office Savings Banks may be gathered from a comparison of the respective results of the first six months of 190 G Tho Government establishment, with a total of deposits on 31st December, 1905, of £8,062.023, added to this fluta in tho fu. lowing six months £ 167,705, equal to 5 4 per cent. The united bank;-, with a total of £9,770,098 in fixed deposits (which may bo called tho savings bank branch of their business), added only £91,275 in the six months, or l-.ss than one per cent. This fact clearly proves that an undue proportion of tho savings of the community is being diverted to the Government institution, owing to tho high rates of interest that are being paid. Under these circumstauces it is of courso cut of tho question to expect tho banksto further lower the rates for deposits and consequently for loans.”