N.S.W. SAVINGS BANK

Grey River Argus, 24 April 1931, Page 5

N.S.W. SAVINGS BANK

■ TO REOPEN SHORTLY i Advances Obtainable FROM COMMONWEALTH BANKS (Aus. & N.Z. Cable Assn.) SYDNEY, April 23. It is expected that the New South I Wales Government Savings Bank will reopen in about three weeks. Meanwhile. necessary arrangements will be made for the absorption, not, the amalgamation, of the Government Savings Bank by the Commonwealth Bank. The N.S.W. Premier, Mr Lang, announces that when Parliament resumes on Tuesday next, emergency legislation } will be passed without delay to give effect to the Commonwealth Banks’ i proposals enabling that institution to niake advances to depositors in the Government Savings Bank, who desire tempcrary relief. 'fhe Premier has used the word “amalgamation" on all occasions, but the Bank President’s speech makes it clear that the negotiations with the Commonw’ea’th Bank are for absorption of the Government Savings Bank. Following is a summary of the proposals put forward by the Commonwealth Bank Board for affording temporary relief to the N.S.W. Government Savings Bank depositors i a nece sitous circumstances:— (1) The N.S.W. Government Savings Bank shall hypothecate to the Commonwealth B.ank such securities as the after may require' to cover such advances as may be made to depositors. (2') The Common wealth Bank shall be expressly made a preferential creditor in respect ofj*uch advances. (3) J That upon production of-deposit-or,?’ pass books, to the Government Stfyings Bank, an s um s paid to depositors together with interest and other charges, shall be repaid to the Coinin on wen ’.th Bank. (4) That the New South Wales Gov* erhmeni shall guarantee all advances so mad? on behalf of the State Savings Bank. The Premier, Mr Lang, announces that tjiese proposals have been approved. For weeks past, movements or creditg hate 'comprised largely transfer of depositors’ accounts to the Commonwealth from the State institution, wlrch caused a marked augmentation of funds for the Commonwealth Bank. ASSETS THERE, BUT "FROZEN." An examination of the State Savings Bank’s position disc’oses that accompanying the persistent withdrawal movement. there was an increasing "frigidity” in the bulk of the securit leg held over, as-cover for a portion of its (abilities. It? holdings in Government stocks last June to £30,382.907. Political and economic factors int.uded, and it became impcssib’-e to liquidate such assets freely, without undersirable reults. The bank is therefore in Possession of a large portion of its assets in more or less frozen form. Its advances for homes totalled nearly eleven millions sterling, and money at sh< rt call seventeen mil-ions, which is we’l above the • fatutory requirements. The Labour Daily says: Unscrupulous •enemie 1 ' of the power of the people, and the Lang Labou r Government, at last by employing the most cowardly and despicable means—-bare-faced lying—have succeeded in closing the doors of the Government Savings Bank of New South Wales, he future of the bank and the disosal of the people’s money are the problems of the morrow, and unfortunately, . they are problems which because cf chance circumstances, are i i the hands of people who proved that they will stop at nothing to serve their po’itical or financial ends. It is n 0 use glossing the fact. The crisis :s the inc?t serious in the forty years o' our banking hi tory. Sus’ ension of operations by the Government Savings Bank caught many unions napping. as all their funds are held by that institution. Officials’ salaries and unemployed reief are now jeopardised, likewise the salaries of offiftirg of the State Executive of the Labour Party. The question is aFo being asked as ?o what will happen to the magnificent new headquarters of the State Savings Bank, which took five years tc, build at a cost of two millions, in the centre of the city, the foundation stone cf which was laid in 1922 by Hon. J. T. Lang, then Colonial Treasurer. The Commonwealth Bank is unlikely to require it for the reason that it a’ready possesses stately headquarter to which at 1 resent, an addiIjoiial section, costing half a million, is being built.

The "Hera'd” editorially says: Mr Lang returns from a tour of the Southern States, where he has been on a campaign to spread the mad doctrine of repudiation as a means of recovering prosperity, to find a grim nemesis awaiting him in his own State. The people have revealed in the most striking manner that they had no confidence whatever i u his di astrons ecurse, and a crisir which descended on a g eat institution, in which the people trusted their savings, owing to the State’s use of them, is the most telling possible denunciatiofi of tire Lang Government by every depositor therein, even to the smallest. M r Lang must resign, and the State must secure a table Government with the least possible loss of time. Only by such action can public confidence be restored. A drastic scheme of economy, involving retrenchment of several officers and rationing of employee* in the civil service, was decided upon by the Reform A’de men of the City Council. Faced with a deficit of £1.00,000, with < a million pounds loan maturing in London on August 1. the Council is < forced to explore every avenue to reduce expenditure. The time allotted to the churches < for rais'ng a-quarter a million pounds f> r hospitals, in preference to ■ a State lottery, expires shortly. It < was obvious from the discussion at the meeting of the Congregational Union, that the collectors had faded. A tax i; suggested as a'n alternative. Mr Seullin announced in the Hou e of Representatives that the Commonwealth Bank Board had decided to as-s-'st the Government Savings Bank of New South Wales. Great relief was expressed by Mr Latham and Mr Lyons, who congratulated the Commonwealth Bank. AUSTRALIAN GOLD REACHES LONDON. (Reed. April 23 at 9 p.m.) LONDON, April 22. i Curiosity has arisen at the unexpect- <

ed arrival of half a m’llion sovereigns from. Australia, coinciding with the incidence of a New South Wales interest payment of about £340.000 due on May Ist. It is stated that the gold is not earmarked for any specific purpose, and that it goes to meet Australia’s obliga-

tions generally. Investors are already asking whether the interest will be paid on May Ist. In the city opinion is • hopeful of this. some Excitement out back. 1 (Recd. April 23 at 9 p.m.) 1 SYDNEY. April 23. The suspension of payment by the I Government Savings Bank caused con siderable excitement in the country cen- - ties, where the bank’s business has • been very large. The Mayor of Deniliquin has con--5 vened a meeting of the citizens with 1 the object of requesting the Govern ; ment to take all constitutional-means of dissolving Parliament. > Politicians Blamed I IN ALL PARTIES. ' FOR DISTURBING CONFIDENCE. SYDNEY. Atuil 22. The Sydney Sun says, editor ally .that - the closing of the State Savings Bank - tcimporaTilrO i.K the result of politics. - The Austral’air politicians, it.says, hold ■ that nothing is more important than • politics. For s : x months this bank has been treated by politicians in all of the 5 parliaments as a means to discredit ■ other politicians. It began, it says. > wth the Nation a ’ists who made an - election forecast that if Mr Lang became Premier the would be ‘ml perilled. Then the Federal Treasurer. • Mr. E. T. Theodore, commented unripe essarily on the Sav : iwrs Bank Com ■ mission errs’ aurioon comer ts as being <f ■ forts fo convince the pcopl * that Mr Lang t.ou : d not lav his han is oa iheir ’ savings. Mr Lang’s own action in resorting f ( , roplulintren. and also the cbndult of some nimJe-s of the Federal caucus in thpir hostil ty towards Mr ! La ng had been deliberately shaking the 1 ereditiof the bank. AH of these polihad been responsible for d:s--1 turbing the confidence on which this bunk, like pther banks, must ex st. On‘ had advised the electors publ:cly to t:rke their money out of the. bank. Jand so help to destroy the iniquities jof tin; capita list’e system. A general assault on thu banks had been a notable feature of the Labour politics 'for live past nine months,- and neither Mr Lang nor his enemies could escape censure for what had happened. LONDON. Airi 1 22. 1 The’ London branch of the New South Wales Savings Bank has been ordered tu .suspend operations till fur ther notice. NEW YORK. AP i’ 22. Australian b nd« dropped sharply following retorts of the com’ng closure cf the New South Wales Savings Bank. Commonwealth Bank GAINS BY CHANGE. SYDNEY, April 23. The Savings Bank crisis caused a tremendous shock throughout the Si a te the .actual suspension of operations being unexpected, owing to the repeated assurances in official a.nd unofficial quarters concerning the safety and the vast resources of this institution. However, thousands of depositors' today bemoan the fact that they were not among the never-ending stream of customers who withdrew either the whole or potion of their savings. It is stated”small tradespeople are likely to be inconvenienced, and among them scores of elderly people who took full advantage of tThfc? liberal interest the bank provided on current accounts. Quite a number of depositors went to tl-ie Commonwealth "Bank to-day to try to learn whe n the' Government Savings Bank would reopen, or whether there was any hope of the Commonwealth Bank tiding them over thp present difficulties. The business to-day at th© Commonwealth Bank was above /orm al, with a fairly general excess of deposits ove'r withdrawals. Some other banks report substantial increases in depositors. LANGITE GETS IT! A question was asked in the Federal House of Representatives at Canberra to-day by Mr Ward, the newly-elected member for East Sydney, whethe r it were true' that there was now a run on the Commonwealth Bank as the result of whiv.h it was likely to close its doors shortly. The Prime Minister replied that this question was entirely unwarranted. It was without any foundation, and the rumouf, h)e said, existed the mind, of Mp Ward, and nobody else

Theodore’s Plan

VINDICATED BY EVENTS. (Recd. April 23 at 11 p.m.) LONDON. April 22. "The Times” C’ty Editor says: The closing of the New South Wales Savings Bank is the outcome of Mr Lang’s policy of repudiation. His reckless talk has naturally unnerved the depositors. In order to give the necessary assistance the Commonwealth Bank may have to increase the fiduciary issue. Although the Bank has frowned on Mr Theodore’s Fiduciary Bill, such an :s--sue to meet an emergency of this kind differs fundamentally from a deliberate pol’cy of permanent inflation. In the one case, the depositors have a claim to be paid in currency, and in the other case there is no such claim, the • object of inflation being to raise the | price level. In times of grave emer- | gency a prompt, but temporary, issue of fiduciary notes is unavo dablo