BANKS AND THE STATE

Evening Post, Volume CXXXV, Issue 150, 26 June 1943, Page 4

BANKS AND THE STATE

"Some time the Government is going to have to take over the private banks and use the people's credit for the people," declared the Minister of Transport (Mr. O'Brien) when speaking in the Budget debate this week. Since the Government had taken office, said the Minister, there had been an increase in the wages of the people, and those wages had been gathered in by the banks in the form of deposits. This statement, coming from a responsible Minister of the Crown at the present time, is most unfortunate. Especially is this so because it follows so closely on the endorsement by the [Labour Conference of the declaration by the Minister of-Finance (Mr. Nash) ithat it was not considered necessary, in view-of the control already exercised

over the banking system, to purchase the trading banks. The Minister, in his address to the' Labour Conference, said that the very nature of the banking business was such that under.a system of State ownership it would be hard to carry out some oi' the principles, particularly during the shortage of man-power and the more urgent necessity of the war effort. Under the present system customers who were dissatisfied with one bank could take their business to another bank. Under a State-owned system they could not do this. The resistance afforded by the trading banks to the importunities of borrowers who wanted to commit themselves beyond their resources was a valuable bulwark to any Government. The circumstances of today— the controls available and operating— and the co-operation now being given by the trading banks, said Mr. Nash, rendered it unnecessary to acquire any or all of them. " , This statement, which, according to the official newspaper of the Labour Party, was endorsed by the conference, may be accepted as the definite policy of the Government. It is, of course, open to any member of the party to disagree with such a policy, and to express publicly such disagreement, but it is unusual, to say the least, for a Minister of the Crown to adopt such an attitude. Such statements cannot fail to cause concern in the public mind. In Mr. O'Brien's statement, too, there is a suggestion that there is something wrong in people depositing their surplus money In the trading banks, and that they should not have the right to decide in whose care that money should be placed. .The people's wages have been "gathered in" by the banks only because the people have chosen that way of safeguarding their capital. They have other channels through which they can make th&ir investments, and the State should certainly not restrict their choice. It would be entirely wrong for any Government to say that because people prefer the private bank method, therefore the Government will take the banks over.