RUN ON FUNDS

Nelson Evening Mail, Volume LXIV, 4 May 1931, Page 5

RUN ON FUNDS

COMMONWEALTH SAVINGS BANK LONG QUEUES WAITING DEMAND CONTINUES TILL CLOSING TIME (United Press Association—By Electric Telegraph—Copyright) SYDNEY, 2nd May. 1 Apparently alarmed by recent developments and the question in the Federal House whether there had been a run on the Commonwealth Savings Bank, depositors of that institution yesterday displayed some alarm resulting in considerable withdrawals to-day. Long queues waited in the street outside the headquarters of the bank in Castlereagh street, the police controlling the crowd of people anxious to withdraw money. The demand continued till the closing time (noon).

COMMONWEALTH BANK WILL MEET EVERY DEMAND STATEMENT BY CHAIRMAN SYDNEY, 3rd May. Sir Robert Gibson, broadcasting, assured customers that the Commonwealth Bank would never close its doors. He said the Commonwealth Bank had the backing of a note issue and he had the authority of the Prime Minister to say the Government would support the bank board in any extension of note issue deemed desirable. The hank would meet every demand upon it. “Quite a number of timid people” added Sir Robert, “feared the Commonwealth Bank would close its doors. I know no safer place for one’s savings than the Commonwealth Bank, and if anyone thinks he.can find a safer place then by all means let him come to the bank and take, bis money away.” Sir Robert Gibson explained that Saturday’s run on tlie Commonwealth Savings Bank was due to timidity on the part of new customers who withdrew their savings from the Government Savings Bank and were largely responsible for its failure. Those same people, his officers informed him, were now rushing the Commonwealth Bank to transfer accounts to some other bank which they thought safer. Quite definitely he wishes to tell those people that the Commonwealth Bank did not want their business and the sooner they took their money out the better the Commonwealth Bank would likethem. The Commonwealth hank wanted regular and reliable customers, and so far as old customers of the Commonwealth Bank were concerned he could assure them the hank hoard would do nothing to jeopardise their savings in any respect.

SENSATION IN SYDNEY EFFORTS TO CHECK RUN SYDNEY, This Day. The run on the Savings Bank department of the Commonwealth Bank caused a sensation in the city and the authorities are doing their best to check it. It is regarded as likely that the bank will .decide to ration withdrawals early in the week. Enquiries elicit the fact that the majority of the bank’s customers are transferring accounts to trading banks with external' charters, including the Bank of Ne v Zealand, or arc using safe deposit receptacles. Tim Lang Government’s new plan to compel insurance companies to lodge cash guarantees is also causing the utmost concern following so closely upon the savings band debacle. Companies are offering no objection to the general principle of lodging securities as a safeguard against fraud by mushroom companies, but declare that there is something sinister in the proposals that hard cash should be provided for the Government instead of Government bonds. The holdings of life insurance companies in New South Wales bonds amount to £7,424,000.

AUSTRALIAN SITUATION A LONDON SURVEY (Received 4th May. 9,30 a.m.) LONDON, 3rd May. The financial supplement to “The Times” dealing specially with the Australian situation surveys fully the economic and industrial conditions. The managing editor of the “Financial Times”, Mr R. J. Barrett, emphasises the need of the young country to tell the world how she actually stands in order to correct misgivings and mfsappvehensions. Britain has not forgotten Australia’s wartime sacrifices, nor the crippling financial obligations incurred there in. It is ridiculous in the face of Australia’s remarkable developmental achievements to treat this passing phase of economic stress as symptomatic of decay. Australia is really in the flush of vigorous youth. She has natural advantages and potentialities unsurpassed in (he world. Paradoxically Sir Granville Ryrio s foreword gives an actual explanation of the present, crisis with an outline 1 of remedial measures, whereas Mr Scullin’s page article is virtually policy-less and merely recites Australia s resources, finally claiming that while Britain’s debt'is almost'entirely deadweight arise ing from the war, only one third of Australia's debt is associated with the war, the remainder being represented by assets contributing to the payment of interest on debt. Mr Scullin’s closing paragraph ends on a reflective note. “Perhaps no might have done better. If the. whole world spoke honestly of its endeavours wouldn’t the answer he the same? What would wo not all give to undo yesterday’s mistake?” ° Professor D. B. Copland, examining the factors underlying the crisis, points out the disparity between wholesale prices which have fallen only 18 per cent, and export prices which are f>o per cent, lower. Tie argues that the loss of income which is now mainly falling on the producers must be spread evenly over the community, and expresses the opinion that if Governments devise a three-ycaf rehabilitation plan confidence will follow and the fall in costs from a reduction of wages will provide the basis for an economic recovery. Mr A. C. Davidson, general manager of the Bank of New South Wales, declares that given a good season,. the termination of the decline in prices, and budget equilibrium, it should he possible by June, 1942, to pave the way for a reduction of internal interest rates and the extension _of credit to

assist the primary industries by raising a loan temporarily to finance exports. “Then,” he adds, “we shall look to Britain to contribute by funding a floating debt says at the'rate of £lO,000,000 or £12,000,000 each half year.” It is noteworthy that Mr Lang is not among the Premiers contributing articles.

MILD RUN CONTINUES STATE SAVINGS BANK BESEIGED (Received 4th-May, 12.50 p.m.) SYDNEY, This Day. Despite Sir Robert Gibson’s assurances a mild run, on the savings hank department of the Commonwealth Bank continued this morning. Apparently a large percentage of depositors are merely timid ones whose confidence in hanking institutions lias been shaken by recent happenings. The State Savings Bank’s head office was besoiged this morning when it opened for the payment of small allowances arranged for necessitous eases.

ANXIETY ABATED CONDIT lONS APPROACH ING NORMAL (Received •Ith May, 1.50 p.m.) SYDNEY, This Day. As the morning progressed and demands at both savings banks wen dealt with expeditiously, anxiety abated, and by noon conditions were approaching normal.