CLOSED SAYINGS BANK.

Press, Volume LXVII, Issue 20315, 14 August 1931, Page 15

CLOSED SAYINGS BANK.

POSITION IN NEW SOUTH WALES. MR J. T. LANG'S OPTIMISM. (from 01-.r, OWN CORItESPOXDEXT.) i SYDNEY, August 6. j l)uring the last few days there Las j been just a suggestion of a swing of i public opinion in favour of the Premier j of New South Wales (.Mr Laug) because of his rejection of the scheme to amalgamate tlio closed Savings Bank with the Commonwealth Bank. There is a feel- j i"g in some quarters that he was right iu deciding that the terms were too j harsh, and it is sincerely hoped that | there is some justification for his latest I statement on Tuesday that it is possible j yet for tho State to reopen tho bank j and conduct it on lines that "will ensure j a profit and, what is far moro import- j ant, the payment in full of all the de- j positors. .It was certainly the most j optimistic uttoranco in regard to tho j bank for months past and has had a j heartening effect on tho people as a j whole. ! It Seems that Mr Lang based his re- S marks on a report he had received from I a special committee of State experts, j including representatives of the Trcas- j ury and the Auditor-General's Department. This Committee was instructed, to examine the position of tho bank im- j mediately it became certain that negoti- | ations with the Commonwealth Bank had-ceased. The Committee was asked I to report whether it would be possible j to devise a scheme whereby the bank j could be re-opened as a State institution and apparently it; has seen a way I out. Its plan has not yet been made public; but it is known that tho Com- j mittee reported to the Premier that tho bank could be reopened and run at, a profit. Legislation would'bo needed, and this is now being prepared. It is hoped to submit it to Parliament jiext week. The most outstanding feature of Mr Lang's announcement had refer- j once to tho need for absolute confidence in tho bank. He said: "Every semb- I lance of political control or interl'er-! nice must, and will, bo eliminated." ; What Figures Reveal. : The Committee, which recommended i that the bank should be reopened at | the earliest possible moment, had figures J prepared which showed that, allowing j for reduced earnings consequent on re- j ceipt of legislation to reduce interest i on Common wealt h and other securities, tho estimated gross earnings of the j bank would be £3,800,000. Interest on j deposits would amount to £2,650,000 and the expenses of management to .£710,000, leaving a substantial balance. The report showed that apart from new figures that might be obtained follow- ' ing the reopening of the bank, there j were ample funds to pay all deposits j and still show a profit. Mr Lang direct- I ed special attention to the fact that I of the securities £27,000,000 were iu ! Government bonds. Within tho next I few weeks all Government bonds would be converted into Commonwealth bonds, I and it was impossible to imagine assets | that would be more liquid. Perhaps it j would be necessary at first for the bank to borrow money in order to pay deposi- I tors who would be anxious to withdraw [ as soon as the bank reopened. The i requisite authority to borrow already i existed. ! Among those who have urged the re- j opening of tho bank was Mr O'Malley , Wood, formerly chairman of the New ! South Wales Savings Bank Board. He said he was convinced that tho bank could be run as a-.State institution, and ho criticised severely tho terms that wero offered to the bank by tho Common weal® Bank. Mr O'Malley Wood said thaPthe bank was in a position to pay all its depositors, .a remark that was endorsed by Mr Lang, who said that not a single person would lose a penny. The Government was behind every depositor and was determined that all would be paid.