BANK ‘DOMINATION’

Dominion, Volume 24, Issue 287, 31 August 1931, Page 9

BANK ‘DOMINATION’

Story May Be Disregarded FALSE LABOUR VIEWS Cause of Weaker Sterling OPPOSITION’S POOR CASE By Telegraph—Press Assn.'—Copyright (Rec, August 30, 5.5 p.m.) London, August 29. Although its credits were practically exhausted, the Treasury had not approached foreign banks directly or indirectly during the week preceding the crisis, for which reason the talk of foreign bankersdominating Britain may be disregarded. “The Economist” points out that the attitude of foreign financiers is comparable to a man who refuses to lend to an acquaintance living beyond his income unless he shows definite evidence of his intention of pulling himself together. Continuing the parallel the paper adds that the acquaintance would not even seek a loan unless he were sure that the request would be granted, since his creditors would immediately overwhelm him if it became known that he had unsuccessfully attempted borrowing. Suggested Means of Relief. A prominent London banker, criticising the Labour scheme of mobilising foreign securities, points out that the bulk of them could only be sold in Britain. He suggests as a pendant economy plan that £t limited number of the hlgh-est-grade securities, readily marketable in the world’s financial centres, should be exchanged for British Government bonds in order to form a centralised reserve, and thus enabling the Bank of England to meet the extraordinary demands for the reimbursement of foreign short-term loans. Labour Manifesto’s Effect The “Morning Post’s” City Editor attributes to-day’s weakening of sterling exchange, and of British funds and other securities, partly to the necessity for a second Budget within a year, with the certainty of additional taxation, and partly to the virulent Labour manifesto. . ■ / He says that while the city is not sorry that the Opposition has shown its hand and so disclosed the weakness of its case, these things are not easily understood abroad. He expresses the opinion that until Parliament meets and a full financial statement is Issued, the markets are bound to reflect the nervous uncertainty.