RUN ON BANK.

Auckland Star, Volume LXII, Issue 103, 4 May 1931, Page 7

RUN ON BANK.

DEPOSITORS' PANIC. Excitement at Commonwealth Savings Bank. CHAIRMAN'S ASSURANCE. (United P.A.-Electrie Telegraph-Copyright)

SYDNEY, May 3

Apparently alarmed by recent developments and by the question in the Federal House of Representatives whether there had been a run on the Commonwealth Savings. Bank, the depositors in that institution displayed some fear Avhich resulted in considerable withdrawals on Saturday.

Long queues waited in the street outside the headquarters of the bank until the closing hour of noon, and the police controlled the crowds, who were anxious to withdraw their money.

The run on the savings bank caused a sensation in the city, and the authorities are doing their best to cheek it. It is regarded as likely that the bank will decide to ration withdrawals early in the week.

Inquiries elicited that the majority of the_ bank's customers who withdrew their deposits are transferring their accounts to the trading banks with external charters, including the New Zealand banks, or are using safe- deposit receptacles.

The chairman of the Commonwealth Bank, Sir Robert Gibson, in a speech which was broadcast to the four States, assured its customers that -fche Commonwealth Bank would never close its doors.

The Commonwealth Bank had the backing of the note issue, and he had the authority of the Prime Minister, Mr. J. H. Scullin, to say the Government would support the bank board in any extension of the note issue deemed desirable in any emergency, and the bank would meet every demand made upon it. Fears of Timid People. Quite a number of timid people feared that the Commonwealth Bank would close its doors. "I know no safer place for one's savings than in the Commonwealth. Bank," said Sir Robert, "and if anyone thinks he can find a safer place, then by all means let him come to the bank and take his money away." .

Sir Robert stated that Saturday's run was due to timidity on the part of new customers, who had withdrawn their savings from the State Government Savings Bank, and were largely responsible for its failure. Those eame people, his officers informed him, were now rushing to the Commonwealth Bank to transfer their accounts to some other bank which they thought safer.

Quite definitely he wished to tell those people that the Commonwealth Bank did not want their business, and the sooner they took their money out the better the Commonwealth Bank would like ' it. The Commonwealth Bank wanted regular and reliable customers. So far as the old customers of the Commonwealth Bank were concerned, he could assure them that the bank board would do nothing to jeopardise their savings in any respect.

The Lang Government's new plan to compel the insurance companies to lodge casE guarantees is also causing the utmost concern, following so closely upon the Government Savings Bank debacle.

The companies are offering no objection to the general principle of lodging securities as a safeguard against fraud by mushroom companies, but they say there is something sinister in the proposal that cash should be provided for the Government instead of Government bonds.

The holdings of the life insurance offices in New South Wales bonds amount to £7,427,000. TIMID DEPOSITORS. Mild Run Continued This Morning. NECESSITOUS CASES PAH). (Received 1.30 p.m.) SYDNEY, this day. Despite .Sir Eobert Gibson's assurances the mild run on the savings bank department of the Commonwealth Bank continued this morning. Apparently a large percentage of the depositors were merely timid ones whose confidence in banking institutions has been shaken by the recent happenings. The State Bank head office was besieged this morning when it opened for payment of the email, allowances arranged- for necessitous cases. As the morning progressed and the demands at both tlie Commonwealth and State Savings Banks were dealt with expeditiously, anxiety abated, and by the forenoon conditions were approaching normal.