Another Bank Challenge Expected In Australia

Greymouth Evening Star, 13 August 1948, Page 6

Another Bank Challenge Expected In Australia

CANBERRA, August 12. An outright challenge to the .1945 Banking Act, under which the Australian Commonwealth Government has tied, up nearly £300,000,000 of private bank deposits, is expected now that the High Court has rejected the bank nationalisation provisions of the 1947 Act. Even without nationalisation the Government has held the trading banks under severe controls, with the declared objective of curbing the inflation which might follow the unrestricted issue of credit. These controls were notified to the banks last year in a long list of instructions which covered every type of credit advance. The latest banking statistics show that £294,000,000 is held in the special accounts deposited by private banks with the Commonwealth Bank, as required by the 1945 Act.

Mr Chifley regards these accounts as the crux of the credit control giv-! en to the Commonwealth Bank. He i has expressed doubt whether the High Court would uphold the validity of Sections 18 to 22 of the 1945 Act,' which require the trading banks to make special deposits. It is believed * that the trading banks were consid-. ering challenging the validity of these sections when the Government, knowing this, decided on the bold course of ' . nationalisation. With the natipnalisa- < tion now only a remote possibility, j observers believe that the banks are ■ almost certain to proceed with their j intention to challenge the 1945 Act. > With only 13 months remaining before the elections, the Government has to consider to what extent it desires

its bank nationalisation fsolicy to be the issue on which that election is decided. Party members now have no illusions about the extent of the spontaneous and angry protests which 'greeted the proposals. Members with borderline seats are certain to have a strong voice in caucus. Time is all-important for an appeal to the Privy Council, which would, keep the banking issue alive well into next year, and the amendment of the 194’7 Act, precipitating another struggle in Parliament, would have much the same effect. There are many in the Labour Party who believe that no political good can come from an appeal to the Privy Council which, in any case, is against official Labour policy.