THE BANKS' PART

Evening Post, Volume CXV, Issue 147, 24 June 1933, Page 12

THE BANKS' PART

AUSTRALIAN DEFENCE

"SOME OBVIOUS FACTS"

"Evening Post," June 24,

Much was said at the annual meeting jf the Bank of New Zealand yesterday .if what one speaker described as "pernicious propaganda" against the banks. New Zealand banks are not alone in this matter, for the National Bank of Australasia, Melbourne, has felt constrained to remark on the recent reduction of interest rates in the Common- { wealth that "is should not be overlooked i that the interest burdens of the taxpayers and the farmer could not have been lightened if the confidence of investors in our governmental and financial institutions had been weakened or impaired. This is so plainly evident to most people that it should not be necessary to say it. But we find certain sections of the minor •Press—fortunately not the _ recognised .financial papers—devoting their main efforts to destructive criticism of the Australian banking system. They entirely disregard obvious facts." The facts are set out by the bank in the following order: — 1. Public confidence in the banks has been all through the depression, and still is, unshaken. : 2. The banks have materially assisted Governments and people during the past few vcavs, aud continue to do so. . 3. The banks have maintained our credit structure during that period at a remarkably high level. This outstanding contribution to Australia's well-being has been made, despite most unfavourable conditions, some temporary and others still continuing. Particular reference is made to the extreme and rapid fall in prices, the heavy Budget deficits of the Governments, especially during the early years pf the depression, and, for a -while, a most unfavourable political situation with tyhich wild schemes of currency inflation ■jnd debt repudiation were associated. _ *.'- 4. No case has been made out against Hi. banks. There have been many •accusations but no proof. The truth ot 'the matter is that the banks are carrying out their share of community effort in the way the people want. There are always discontented individuals who would Jlestroy with some vague hope o£ recon•Aluction. "UNCONSCIOUS HUMOUH." "There is an element of unconscious humour in many statements of these would-be reformers and wonder-workers. One says: 'The banks have failed .to meet the demands made upon them. ' Cer--fainly they have not failed to meet debitors' demands. Another asks: Why should not the people be their own bankers, and the making of big dividends be eliminated V _. . "--. ('The banks are not making Ing dividends. When times were good and all business was returning large profits, tne. -'banks shared in the general prosperity. _\ow their dividends are no more than a •Very moderate interest on shareholders funds—last year this banks profits equalled about 3V. per cent. "Perhaps if banks made no profits the critics would be better pleased, but who ivould find the capital? who would carry the risks? and who would deposit money with an undertaking so conducted? And if banks, why should not the shopkeeper, 'the manufacturer, the farmer work lor little, cr no, personal profit? They are all part of the economic system. : BANKS' RESPONSIBILITIES. •'• "While nothing man does is perfect, progress is continuous and improvement certain. This applies to banking as to all other of our many economic activities, and every sensible person knows that, in their own interests, the banks will quicken that -improving process whenever and wherever they can do so with safety. Unlike their critics, they are responsible to the community generally. ' "Upon them centres the production ■trade and commerce of the country^ and, in a large measure, they uphold the integrity of a large proportion of the people s savings. While the banks welcome honest and constructive criticism, they are weary •of'the plausible insincerity or the cupa.le ignorance of the bulk o£ their detractors? Are these attacks upon the banking institutions part of a scheme for the^socialisation of Australian finance and comri'nerce?"