MONEY MANAGEMENT

Evening Star, Issue 25699, 24 January 1946, Page 5

MONEY MANAGEMENT

STATE INTERVENTION IN BRITAIN VIEWS OF PROMINENT BANKERS (N.Z.F.A. Special Correspondent.) LONDON, January 23. London banking circles are pacing : attention to statements made by Lord ex-Viceroy, of India, who is now chairman of the Midland Bank, and Mr Colin Campbell, chairman of the National Provincial Bank. Lord Linlithgow, making his first statement as chairman, sees the growing intervention of the State in economic affairs as a natural development of experiments in the management of money which were; being made before the war. He accepts the ideathat the of economic direction is to achieve greater steadiness and general prosperity. The process is now affecting the banking system in the same natural way. The Government had already become responsible for determining the total of bank deposits. It had intervened more and more actively to determine interest rates and, through them, capital values, and it had concerned itself directly with the allocation of the community's capital resources and the lending capacity of the banks. Lord Linlithgow,added that the Midland Bank would work loyally and progressively within the new framework. It would combine its' duty to the community "as part of a.' flexible monetary system " with jts responsibility as a custodian of the liquid money resources of its customers. . He sees no reason why the nationalisation of the Bank of England should disturb the friendly relations between the hank and the-clearing banks, and takes it as a silent tribute to the banks, as well as the intentions of the Government, that no untoward reactions from "so delicate a. legislative project" have been seen among depositors at home or abroad. Commenting on the prospects of Government finance, Mr Colm Campbell points" out that in the next five years a series of large" loans fall due for repayment and must be dealt with._ He expects that the skill and experience of the Treasury, will ensure success, " with equitable treatment of the investor," but he-adds that any " undue forcing " of the situation would involve a great danger. Referring td the danger'of: inflation, Mr Campbell, expresses the opinion that the best protection is an adequate supply of goods in the home market, and he suggests that the importance of a large home market for the production of export goods at competitive prices is not being •sufficiently appreciated. Regarding governmental experiments, he remarks that some of them give cause for " grave concern," and may retard Britain's recovery. He thinks that prosperity in Britain can be achieved only through a system based on individual enterprise and hard work, supported by. " wise and broad advice " from the Government.