“STATE” BANKING.

Greymouth Evening Star, 19 March 1934, Page 6

“STATE” BANKING.

*pHE story is familiar of the dying businessman, who was making his funeral arrangements, and nominated four hank managers as pall-bearers. “They have carried me all my life, so they may as well, carry me when I’m dead,” he explained. Reliance on banks is being encouraged to dangerous limits in the U.S.A, by the new proposals of easy advances to employers. It is just as well that it is State money that is to be used, because no private bank could' offer such terms, and hope to exist, itself. Little is said about security 'and what will happen if the borI rowers cannot, or will not, pay at date of maturity. It is no wonder that the more orthodox Federal Reserve Bank Board opposes this plunge of Re--1 construction Finance Corporation, and it will be surprising if important amendments are not made to the original proposals. The new proposals appear to be too much even for Mr. Roosevelt. The whole incident is a warning to the world that if State banks, excellent in themselves, are not run on strictly businesslike lines, enormous national losses must arise, the help given to industry being of a temporary character, and any increase in employment will be followed by drastic subsequent retrenchment.