LIMITATION OF DEPOSITS

Sun (Auckland), Volume II, Issue 445, 29 August 1928, Page 12

LIMITATION OF DEPOSITS

SAVINGS-BANK POLICY AGAIN ATTACKED FURTHER LABOUR CRITICISM (THE SUN’S Parliamentary Reporterj WELLINGTON, Tuesday. Discussion on the second reading of the Post and Telegraph Amendment Bill this evening allowed Labour to reopen its attack on the Government’s policy regarding savings bank deposits. Mr. M. J. Savage, Mr. J. A. Lee and Mr. H. Holland shared the criticism which echoed the now familiar refrain to the effect that the Government, by limiting the maximum on which the savings bank will pay interest, has played into the hands of private banks. The Hon. W. Downie Stewart, Minister of Finance, after traversing his previous answers to this criticism, said that it would not have been a business proposition to pay extra interest on £50,000,000 just to call back £2,000,000. Labour members’ criticism -sVas so unsound that he could not understand them persisting in it. Mr. H. E. Holland said that a public declaration of policy by the Minister of Finance had been responsible for the heavy withdrawals by which the Dominion had been deprived of cheap money. Mr. D. Jones said that the Opposition’s policy would result in dearer money for New Zealand, while the Government’s policy had kept interest rates down. Mr. Jones explained that solicitors, moneylenders and others with money to lend had been in the habit of placing large sums for short terms with the savings bank. This practice had made such deposits a liability, and the Government, after this type of deposits had been withdrawn, had wisely closed down on them. The associated banks had now got these deposits for two years at 5 per cent., and were very sorry about it. Labour members were full of admiration for the post office as a socialistic enterprise, said Mr. Jones, but they didn’t carry their administration as far as defence, which was equally socialistic. Mr. D. G. Sullivan said the Government had been unable to convince the people of the Dominion that it had not deliberately served interests of the associated banks. After further discussion the Bill passed its second reading.