BANK CO-OPERATION

Evening Post, Volume CXXII, Issue 68, 17 September 1936, Page 12

BANK CO-OPERATION

ULTIMATE DRIVING FORCE

Proposals have been made to the Australian Monetary and Banking Commission that the Commonwealth Bank should be granted power of access to the London funds of the trading banks; that trading banks should be forced to keep statutory deposits at the Commonwealth Bank; and that all Government and semi-Government accounts should be held by the Commonwealth Bank. They were opposed by Mr. J. L. McConnan, general manager of the National Bank of Australasia.

"My main comment on these proposals," said Mr. McConnan, "is that they savour of coercion, an element which, in my opinion, is unnecessary and which would be most undesirable in the Australian banking system. "I believe firmly that the spirit of ec-operation should be the ultimate driving force in any system that has as its objective the most efficient and satisfactory operation of the banking organisation in this country. I do not expect, in the most favourable circumstances, that the course of co-opera-tion will run smoothly; but I submit that there is, in fact, co-operation sufficiently strong to serve the needs in view, and I am convinced that, with continued and determined effort . by both parties, this spirit can be strengthened , and firmly established.

"The trading banks in the past have shown themselves willing and anxious to support a policy best suited to the national interests. There is no evidence to indicate a desire on the part of the banks to regard profit-earning as an overweening consideration. "If the trading banks were coerced and hampered by arbitrary legislation the benefit of their experience and of their intimate contact with the "public might be "lost to'the Australian banking system and a policy f might' be enforced upon them which would be inimical to the best interests of the Australian economy. "I acknowledge that in the few years since the Commonwealth Bank began to function as a central institution good progress has been made, but the years that have passed have been too few to enable either the Commonwealth Bank or the trading banks to acquire the art and practice, of central banking and applying them to Australian conditions."