REPLY TO THEODORE

Evening Post, Volume CXI, Issue 105, 6 May 1931, Page 9

REPLY TO THEODORE

EFFECT OF BIG PAY OUT

WOULD MEAN INFLATION

(Received 6tli May, 10' a.m..)' SYDNEY, 'This Day. Replying to Mr. Theodore's iemarks about tho banks, Mr: A. C. Davidson, general manager of tho.Bank of New South Wales, said that if, as suggested, the banks paid' out £100,000,000, they could do.it either by credi-t extensions or drawing; on tho Commonwealth Bank for , notes. . Tho effect, however, would, be sheer inflation! Jf it were done, tho purchasing power of the £1 note would be1 reduced to 63 Bd, and the burden would fall most heavily on the wage-earnors. lln the course of !an address' to iailwaymen,* Mr. Theodore again attacked tho banks for obstructing his financial policy. He said it had been represented by Sir Robert Gibson that the banks could not extend further credit, yet in ihe case of the New South. Wales Savings Bank emergency the „ Commonwealth Bank came to its aid and accepted'the responsibility for a liability the amount 'of which might easily run into £1,----000,000. Mr. Theodore said that it was ivillainous misrepresentation to say that the Government 1 sought wild inflation. Fiduciary enrreney "would be used to make credit available in large sums for every industry' where there was need for it. "Wo'propose," he said, "that, if the banks do not adopt a,more liberal policy and make credit available ■ in largo 'amounts for trade -and business, then we mu6t regain control of the eurrencyi " , ■ • "I am convinced that the' Commonwealth/Bank directors are preventing the country from returning to a stable condition. If banks wanted to payout £100,000,000 they could do it."