STATE BANKING.

Manawatu Standard, Volume LXV, Issue 256, 27 September 1945, Page 4

STATE BANKING.

(To the Editor.)

Sir, —Your correspondent Mr Roe is as evasive as ever, and refuses to give a direct answer to my questions. He missed Mr Langstone’s contradiction as reported by you, so I am not surprised that he also missed, the following statement, also reported by you. “When the Bank of New Zealand became the only one authority to issue public credit (against overdrafts) the other banks would shrivel up, etc.” That is not a statement of opinion—it is an often-declared policy statement made by Mr Langstone in no uncertain terms.

Replying to Mr Richards, he also admits lie aid not notice the contradiction regarding bank deposits and makes it equally clear that he also missed the signiticanco of the second quotation of Mr Langstone’s for he talks of “competition.” There could be no competition when the trading banks were debarred from making advances, their principal means of revenue. In conclusion, unlike Mr Roe 1 will answer Mr Richards’s questions: (1) Of course, they lend their deposits. They would not pay £300,000 a year (Mr Langstone’s figure) for nothing. (2) Mr Langstone says they did, but I can’t see how they could. The Reserve Bank of New Zealand started with £1,500,000. (3) I did not mention or criticise a State bank’s efficiency. The Reserve Bank and Post Office Savings Bank are extremely efficient. Mr Nash has said there is no necessity to take over the Bahk of New Zealand, defeating the proposal at two Labour Conferences, and only gave way under extreme pressure at the third conference, when the delegates were carried away by Mr Langstone’s enthusiasm. Also on a number of occasions the Prime Minister has warmly commented on the wonderful assistance the trading banks have beon to the Government during the war. At June 25, 1945, they had lent the Reserve Bank £39,240,243 at call. —Yours, etc. OLD BANKER.