BRITISH BANKS

Evening Post, Volume CXV, Issue 66, 20 March 1933, Page 10

BRITISH BANKS

STRENGTH CONSIDERED

Mr. A. C. Davidson, manager of ■the Bank of New South Wales, in reviewing the recent banking crisis in the United States, laid stress on the strength of the, British system. In an article contributed •to the "Sydney Morning Herald" Mr. Davidson pointed out that under the British system of large banks having' numerous branches spread over a wide area, any setback in any one district or industry is minimised by its smallness compared with the business of the bank .' as a whole and by the continued sound- ' ness or prosperity of other districts and pother industries. It is only necessary for C'a large bank.to draw to a small extent on its_ resources in other districts to maintain and carry such afflicted districts or industries successfully until prosperity re- - turns to them again. The greatest advantage, however, of the British system, as compared with the American, is" that the large banks throughout the British Empire provide a suitable field into which men of ability are attracted and may be trained for the executive positions of the banking world in a manner beyond the capacity of the American one-branch bank. Such highly specialised training and experience given the public a greater guarantee of integrity and good management.

"The present debacle," Mr. Davidson concluded, "is only an intensification of a process constantly going on in the United States, due solely to a faulty system. One could not even imagine such a position in Great Britain, Canada, or Australia, except under stress -of some political calamity. The banking systems in Britain and the Dominions are systems in the true sense of the word, and not a collection of heterogeneous institutions. There is proper co-ordination, in most cases by central banks, but even where these do not as yet exist, there is mutual co-operation between a relatively small number of large and well-managed banks."