The Banking System

Hawke's Bay Tribune, Volume XXV, Issue 162, 25 June 1935, Page 8

The Banking System

(To the Editor.) Sir, —On looking through the columns of the Press, I notice that quite a lot of space has been given to a few writers who would like us to believe that the present banking system is free from any defects, and that it would be nothing short of a national calamity for the Government to nationalise banking. They would also like us to believe that our money would be more secure in a commercial bank than in a State-controlled bank As private banking statistics provide that only 7 per cent, of the money deposited in those institutions shall be paid to depositors, it is quite evident that once that amount is paid out, the doors must close. That is what happened in the 1893 bank smash, from which many never recovered. Following this catastrophe in Australia, a Labour Government nationalised the banking system by building a Commonwealth Bank, and the die-hards fought it to the last ditch, warning the people that the Labour Government would seize their money. Needlese to say such a thing never took place; but on the other hand, the Government was able to carry out gigantic developmental works such as the Trans-Continental Railway, as well as financing Australia to the extent of £350,000,000 for her share in the war.

The late. Sir Denison Miller, who wa* Governor of the Commonwealth Bank during that period, stated at the termination of the war that he was prepared to provide whatever money Australia required for developmental works of a reproductive nature if called upon to do eo, and pointed out that there was no occasion for the Government to borrow money either internally or externally. However, a banker’s Government was in power, and they preferred borrowing. A money-tightening campaign followed by a belt-tightening campaign set in, and the clock was turned back fifty years. While Mr Banker informed the public that it was due to the aftermath of the war, the late Sir Denison Miller, Governor of the Commonwealth Bank, stated that he could supply sufficient money to place every man in work if need be, and at rates of interest such as would defray the coet of bookkeeping, about 3 per cent. Surely such an exposure of such eant and humbug should awaken the heaviest sleeper from his slumbers. If not, then he is a hopeless case. As money was invented to conform to the needs of the many, the moist effective way of compelling it to do so is in the establishment of a national bank under sympathetic administration.— Yours, etc., e. n. pallet. June 24, 1935.