THE BANKS

Evening Post, Volume CXV, Issue 70, 24 March 1933, Page 6

THE BANKS

POLICY IN AUSTRALIA

A SPIRITED DEFENCE

(From, "The Post's" Representative.) SYDNEY, March 16.

Since Australia felt the full effects of the depression it is certain that no organisations have come in for-greater criticism than the great trading banks. Politicians have not been alone in this matter, and it is remarkable that the banking chiefs have remained -silent for so long. . It is held by those who arc in touch with the facts that the banks, by their conservative policy, have sftyed Australia from a worse disaster. The credit policy of the banks is still being.criticised, and these criticisms, are dealt with in a remarkable manner in' the Monthly Summary issued, by the National Bank of Australasia, whose general manager is Mr. E. H. Wreford, chairman of the Associated Banks of Victoria. The attempts made to find fault with the banking system, says the Summary, stand out in-striking contrast-to the general acknowledgment of the loyal and invaluable service rendered by the banks to the Governments and people of Australia." . r

"The expansion in bank deposits" at is said, "is. in itself-. indisputableevidence of the people's confidence in the .banks—a well-placed confidence which is increasing as time goes on. it is regrettable, however, that politicians would seem to aim at wrecking the very institutions which* by • discriminate use of their have assisted the Governments in their efforts to surmount the great difficulties with which they were beset It is especially regrettable, because it might disturb the feeling of trust which exists between the people of Australia and the banks. It is altogether a wrong attitude "for politicians to adopt when they are so well aware of the great necessity not only .for .maintenance of the existing general feeling of confidence, but also for continuance of sound banking policy. - ■- "The real need for concern at the recent thrusts at the banks, however, is one for consideration by individual members of the community. The -present attack is directed at the banking system, but, just as likely as not, may be against others tomorrow whose prices, profits, or methods do not accord with the views of certain people. The primary producer, manufacturer, retailer, contractor, in fact any man in business, may later find it necessary to defend himself against onslaughts ot this character, and it is as well that he should understand this aspect of the matter and take steps to record his disapproval. Those -dissatisfied critics of present-day difficult business conditions are prone to- grope for relief in the hope that it may be found in a form causing to them neither suffering nor sacrifice—hence the attention that is often paid to- queer, socalled reform schemes, which can hardly be classed even as palliatives, and which, though each, acclaimed by its sponsor as the one complete, and permanent remedy for the ills of the social system, never come to fruition. "What is needed is not so much cheap money for everybody, the capable_ and incapable alike, bnt a resuscitation of international confidence and' friendliness, and a recognition of the principle of international interdependence, -which combined would lead to a revival-in industry and enterprise, offering not only reasonable prospect of paying fair Wages, but also winning profit and thus providing interest on capital. One of the principal complaints of the critics is that the banks have refused to 'release credit.' To well-informed residents of the' Commonwealth it is very apparent and it is also the general experience of the banks, that in time of depression business cannot as./ a rule usefully employ borrowed money. It is noteworthy, however, that, despite declining values the banks have refrained from adopting a harsh policy of calling up advances, and have also provided a sufficiency of credit to keep the wheels of industry and production moving.. The man in the street knows tlie inevitable end of the-bank which is willing to lend.de-* :positors'! money without exercising xea[sonable discretion, and care as to the j nature and extent of the security and I the objects of the borrower. Yet many critics would have the banks tread a path- so full of danger and risk of disaster.

"It is to the credit of the banking institutions of Australia that, despite extremely perplexing times, they have kept_ their heads, being neither optimistic nor pessimistic, bit providing powerful help to borrowers, including Governments, without endangering the funds entrusted to them by depositors."