IN DEFENCE OF BANKS.

Auckland Star, Volume LXV, Issue 10, 12 January 1934, Page 6

IN DEFENCE OF BANKS.

In view of the general tendency to blame the banks, and the banking system, for many of our present economic ille, it may be useful to give some actual facts regarding the part which the banks have played in helping forward the financial recovery; of Australia. How great this recovery has been is shown by the Budget. After making special relief to ■ primary producers of £2,250,000, and remission of taxation to the extent of £1,000,000, there was an actual surplus of over 4 £3,500,000 instead of an estimated deficit of £1,300,000. This recovery was largely due to the way in which the banks provided funds to finasce both Government deficits and public works during a period of acute financial difficulty, when normal borrowing operations -were impossible. The nine trading banks held about £32,000,000 of Government Treasury bills. The banks also stood by their customers' and did their best to help them / through during the eluinp in commodity prices. This was a potent factor in helping on national recovery. They did not pursue a policy of credit restriction either towards the Government 'or private customers, as has been sometimes asserted. 'Nor do the banks represent only a few wealthy capitalists. They are owned by about 71.000 members of the public, with average holdings of between £500 and £600. They have over 755,000 depositors, with an average deposit of under £370. Their wise and consevvative management has had a. steadying influence on the whole Australian nation during the crisis, and they have stood apart from political and party influence. It is very' dmibtful if any nationalised banks would have shown a better record, or rendered greater service to the community. - ECONOMIST.