DOORS CLOSED.

Auckland Star, Volume LXII, Issue 95, 23 April 1931, Page 7

DOORS CLOSED.

DRASTIC ACTION. N.S.W. SAVINGS BANK. Commonwealth Ready to Give Assistance. INSTITUTION SOLVENT. (United P.A.—Electric Telegraph—Copyright) ♦ (Received 10.30 a.m.) SYDNEY, this day. The head office in Sydney and 192 branches and 64S agencies of the Government Savings Bank of New South Wales will now be closed until further notice. This sensational announcement was made last evening by the president of the bank, Mr. H. D. Hall, who stated that the intention was to consider the position of the bank. Sir Robert Gibson, chairman of the Commonwealth Bank, in a statement, said the board had considered the adoption of some measure of relief to those depositors in the Government Savings Bank of New South Wales who might be involved in serious embarrassment through the closing of that institution. Accordingly the Premier, Mr. J. T. Lang, has been advised of the board's willingness to provide assistance through the Commonwealth Bank in cases of necessity. Certain proposals had been made to Mr. Lang's Government, which would require Parliamentary approval. After that is given the nature of the relief will be explained without delay.

As there are more than 1.000.000 depositors in the Government Savings Bank, a large percentage of whom have lost their employment, their plight -when they discovered that their bank balances are not available, through the closing of the bank, was pitiable.

Of many hundreds who yesterday were fortunate enough to withdraw their money, a number declared that their livelihood was solely dependent upon what money they had saved and placed in this bank.

The suspension of operations caught many unions napping, as all their funds were held by that institution. Ofiicials' salaries and unemployed relief are nowjeopardised, likewise the salaries of the officers of the State Executive of the Labour party.

The question is also being asked as to -what will happen to the magnificent new headquarters of the State Savings Bank which took five years to build and cost £2,000.000. This edifice is in the centre of the city and the foundation stone was laid in 1922 by the "Hon. J. T. Lang" then Colonial Treasurer. The Commonwealth Bank is not likely to require the premises, for the reason that it already possesses stately headquarters to which an additional section costing £500.000 is at present being built. No Serious Alarm. Notwithstanding the dramatic suddenness of £he announcement that an arrangement was being discussed for the amalgamation of the Commonwealth and the New South Wales State Savings Banks business men and depositors in the city showed no serious alarm yesterday. A small crowd waited for the opening of the headquarters of the bank, and until noon withdrawals were fairly heavy, mostly in Email amounts,, After that "matters were quiet. Mr. H. D. Hall, president of the bank, emphasises that the institution is quite solvent, but amalgamation with the Commonwealth Savings Bank would give depositors more effective protection than is afforded under the State's control. The amalgamation ie regarded as eertain, although it will take a few days to complete it.

The proposals for the. merger were not submitted to the Commonwealth Bank Board until Tuesday evening, and the position of affairs is now being investigated. Legal power exists for the Commonwealth Savings Bank to take over the State Bank, hut the Federal Treasurer, Mr. E. G. Theodore, must approve whatever is done. Officially it is contended that It is not lack of confidence in the State Bank which has caused the withdrawals on gueh a considerable scale lately, but that political issues are largely responsible, which make desirable a reorganisation in control, so that the bank shall not be influenced by State issues. The depositors' money in the bank is quite secure. The suburban branches yesterday reported many withdrawals, but the majority of the depositors did not close their accounts.

Absorption Favoured.

A message from Canberra says that although no official announcement has been made, pending receipt of details from the Commonwealth Bank Board, it can be stated definitely that the Federal Government is prepared to agree to the absorption of the New South Wales State Savings Bank in the Commonwealth institution if suitable terms can be reached. The Federal Loan Council will meet to-day at Melbourne, when Mr. Theodore will be present, and the situation will fully discussed.

Mr. Scullin. in explaining his suggestion that the Fiduciary Notes Issue Bill might reappear sooner than was expected, said the Commonwealth Bank Board, in view of the increased responsibility it might have to assume, might possibly find it necessary to approach Parliament for authority to increase the note issue.

Mr. Scullin also said all the resources of the Commonwealth would be used to protect depositors. He urged members to keep their heads. So far as the Government could influence Parliament, it would induce it to extend all its; powers, and to trust the Commonwealth Bank to protect every depositor in every savings bank in Australia.

A message from Melbourne savs the State Savings Bank of is not perturbed bv the happenings in New South Wales" Business is proceeding as usual. At Adelaide banking business is normal and the New South Wales trouble is in no way reflected tliere. LONDON BRANCH. OPERATIONS SUSPENDED. (Received 10.30 a.m.) bedz:- LONDON, April 22. The London' branch of the New South Wales State'lpatingß Bank _ has been ordered to enspend operations until fnzfiterßotie*.