LIMIT ON CREDIT

Gisborne Herald, Volume LXVIII, Issue 20625, 28 November 1941, Page 6

LIMIT ON CREDIT

AUSTRALIAN RANKS

ADVANCES FOR BUSINESS INVESTMENT CONTROL (Rccd. Nov. 28, 10 a.m.) SYDNEY, Nov. 28. The new banking policy covering the restriction of credit to business and for control over new investments, was outlined by the chairman of the Commonwealth Banlc, Sir Claude Reading, in an official statement issued last night under the national security regulations. The statement advises trading banks that bank accommodation to retailers and manufacturers of goods for civil consumption should, in future, be definitely limited and. as a general rule, assistance should not be granted to permit new investments being undertaken for, any purpose which is not regarded as essential to the war effort. Taxation, as far as possible, should be met and dividends paid from income, and by no means by new or increased bank accommodation.

“It is appreciated," says the official statement, “that this will mean many heavy sacrifices.. It is inadvisable for anyone to enter into commitments requiring bank accommodation to complete, without consultation, his bankers." Sir Claude Reading explained that this policy is designed to assist the diversion of men, labour and materials from private enterprise to the prosecution of the war to overcome the shortage of man-power and obviate the competition of private enterprise for resources needed for the war effort-