UNTIL FURTHER NOTICE

Evening Post, Volume CXI, Issue 95, 23 April 1931, Page 11

UNTIL FURTHER NOTICE

STATE SAVINGS BANK

PAYMENT SUSPENDED

DEPOSITORS' PLIGHT

SYDNEY, 22nd April. The head office in Sydney, 192 brandies, and 648 agencies of the Government Savings Bank of . New South Wales are now closed, until further notice. This sensational announcement was made to-night by the bank's president, Mr. H. D. Hall, who stated that the intention was to consider the bank's position. Sir Robert Gibson, chairman of the Commonwealth Bank Board, made a statement to-night. . He said that the board had considered the adoption of some measure of relief to depositors in the Government Savings Bank of New South Wales who may be involved in serious embarrassment through the closing of that, institution. - Accordingly, the Premier, Mr. J. T. Lang, had been advised of the board's willingness to provide assistance through' the Commonwealth Bank in eases of necessity. ; . MEASURES OF RELIEF. ■■'■- ■ ' 1 ■ Certain proposals had been made to Mr. Lang's Administration which will require Parliamentary approval, after which1 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 will be pitiable when they discover in the morning that their bank balances are unavailable through the bank closing. Of the many _ hundrods who to-day were fortunate in withdrawing their money, quite a number declare that their livelihoods were solely dependent on what money they havo saved in this bank. The Premier, Mr. J._T. Lang, announces that when Parliament resumes on Tuesday next, emergency legislation will be passed without delay to give effect to the Commonwealth Bank's proposals, enabling' that institution to make advances to depositors. EXPECTED REOPENING. It is expected that the Government Savings Bank will reopen in about three weeks; meanwhile the necessary arrangements will be made for the absorption (not the amalgamation) of the Government Savings Bank by the Commonwealth Bank. The Premier has used the word "amalgamation" on all occasions, but the bank's president makes it clear tonight that the negotiations with the Commonwealth Bank are for absorption. For weeks past, the movoment of credits has comprised largely the transfer of depositors' accounts to tho Commonwealth from the State institution, which has caused a marked augmentation of the funds of tho Commonwealth Rank. Earlier messages stated that, notwithstanding tho dramatic suddenness of the announcement that the amalgamation of the Commonwealth and the New South "Wales State Savings Banks was under discussion, depositors in tho city showed no serious alarm to-day. A small crowd waited for tho opening of the headquarters bank, and, until noon, the withdrawals wero fairly heavy, being mostly for small amounts. After tfiat the position quietened. PRESIDENT'S STATEMENT. Mr. H. D. Hall, president of the bank, emphasised that the institution ''is quito solvent, but an amalgamation with^the Commonwealth Savings Bank will give depositors more effective protection than is afforded under.State control:" The position is reassuring, and the amalgamation is regarded as certain, though it will take a few days to com-. ote. . ■. ' , . ■ ■ I INVESTIGATION PROCEEDING. The proposals for the merger wore not Hubmitted' to tho Commonwealth Bank Board until last evening, and the position is now being investigated. Legal power exists for the Commonwealth Savings Bank to take over the State Bank, but the Federal Treasurer must approve of whatever is done. ■ Officially it is contended that it has not been lack of confidence in the State Bank which has caused withdrawals on such a considerable scale lately, but that political issues largely have been responsible, making desirable a reorganisation of control so as not to be influenced by State issues. Depositors' money in the bank is quite secure. Suburban brunches to-day reported many withdrawals, but the majority of customers'did not clusc their accounts.