COMMONWEALTH BANK

Evening Post, Volume CXI, Issue 106, 7 May 1931, Page 11

COMMONWEALTH BANK

CHAIRMAN'S CANDOUK

BEFORE FEDERAL SENATE

CANBEBBA, 6th May.

An event unique in the annals of tha Federal Parliament occurred to-day when Sir Eobert Gibson, Chairman of the Commonwealth Bank Board, appeared at the bar of Senate to give tha Bank Board's view of the Commonwealth Bank Bill under which the Ministry seeks to ship large- quantities of gold overseas. Members of tho Ministry and tha House of Bepreseutatives crowded tha Senate to hear Sir Kobert Gibson's statement.

He said that the board was in continuous communication with the Bank of England, which had no. direct financial relations with the Governments of Australia. He confidently believed, that, thebank would do anything in its power to help Australia, either by .influencing the market in London in her favour,, or by helping his board. THE GOLD RESERVE. The amount of gold _ held iv Australia as a reserve against the noto issue, proceeded Sir Bobert Gibson, was £15,150,000. The total unfunded debts owed by the Australian Governments in London was £38,075,000, of which sum £5,000,000 was due to the Westminster Bank, £5,000,000 to the bill market, £2 350 000 to the Australian trading banks, and £25,125,000 to the Commonwealth Bank. Prom inquiries made in. London it would be very difficult to discount Australian bills falling due at an early date, or, if it could be done, it would be at a comparatively high rate of interest. _ Sir Bobert emphasised that the Commonwealth could make no further shipments of gold to London without reducing the statutory reserve. The fact that the note issue would be inadequately supported would create uneasiness and a loss of faith. Tho value of tho Australian not* would' depend entirely upon the confidence of tho pcoplo and tho ability of tho people to redeem the notes in some form or another. . The country had hail an instance oi what loss of faith meant quite recently, although in that caso the Government Savings Bank was backed by ample There'was the samo lack of faith m the fiduciary issues. On the other hand, the cold reserve had a psychological valao, and created confidence in the mind of the people and in those who handled the notes. POSITION IN LONDON. Sir Eobert Gibson added that £5 000,000 wortlv of bills were falling due on 30th June, and there was a dancer of default. He read a letter to the Treasurer, Mr. E. G. Theodore, in which he stated that the Commonwealth Bank already had shipped £5,000,000 worth of gold to meet the needs of the Government prior to 30th March. , Ha thought that if the country must default, it would be preferable to dofault to Australia and not to the people overseas. Senator Barnes asked: "Would you say that a better alternative would bo a further shipment of goldf Sir Robert Gibson; "Undoubtedly."