ATTACKS ON BANKS

Nelson Evening Mail, Volume LXVI, 4 September 1934, Page 2

ATTACKS ON BANKS

“FALSE AND MALICIOUS STATEMENTS” GRAVE DANGER OF THREATENED NATIONALISATION COMMENT BY BANK CHAIRMAN in the course oi his address at the 68th general meeting of shareholders in the Commercial Bunk oi Australia, Ltd., at -Melbourne recently. Mr John L. Webb, Chairman of Directors, said: “Banks have hitherto maintained a policy of non-interference in politics, but unfortunately it has become necessary for attention to be given to this matter, owing to the unjustified attacks levelled at our financial institutions. By the very nature of their duties, which prevents bankers from divulging the business of their customers, they are unable to make public details which -would, in many cases, effectively answer the false and malicious statements so unwarrantably circulated by manv people who are well aware of the actual position, but mislead others.

“Unfortunately, there are, in our midst, a few who would nationalise our banks and financial institutions, and it is expected that this will be the main issue on which the next Federal election will be contested. This is a matter of vital importance which should be borne prominently in mind by shareholders and customers.

“The shareholders of this Bank now number 12,062, with an average holding of capital of £342, and depositors number approximately 92,000. “To quote the London ‘Times’: ‘Once any party secures control of a nation's financial machinery and begins to tamper with the springs of credit, politics become a matter of grave concern to business people.’ “It is, of course, possible that our monetary system is not perfect but the proposed change, of which so much has been heard of late, has nothing to support it. Many of the proposals, if given effect to, would ruin our credit structure, which has been built on sound foundations, and would lead to failures and difficulties which have aggravated economic troubles in other countries. I cannot think that intelligent persons will be led into the snares which are being set by groups of men untrained and ignorant of financial problems. “Attempts are frequently made by persons to lay the responsibility for the present depression dt the door of the monetary policy. They state that institutions controlling credit have deliberately engineered the existing depressed conditions. This is a fallacy, as banks and financial institutions can prosper only when general conditions are prosperous. “It is very doubtful if any system of Government or bureaucracy is capable of conducting the industries of a nation, especially if the responsibilities connected therewith are upon the shoulder’s of theorists who consider they have a genius for planning other peoples’ affairs. There is frequently a tendency for experience to give way to experiment. Monetary manipulation, mav give temporary relief to our economic troubles, but in the long run it would surely aggravate and prolong indefinitely the depressed condition.

“World recovery will be more likely to take place by the encouragement of individual effort and enterprise, under methods based upon proven principles, than as a result of artificial measures ol restriction and control.*”

| Mr H. N. Bainbridge, in endorsing the remarks of previous speakers, drew ati tention to The large groups of people, in 1 the Commonwealth; interested in-the welfare of the banks, and said : “Practically everybody in the community is, to a greater or lesser extent, interested in the proper functioning of the banks of the i nation. Tire first group is that of the customers of the banks. Talcing as an example a bank such as the Commercial Bank, which is interested in every State of the Commonwealth and in New Zea- | land, the scores of thousands of customers of the various branches of the Bank must compose a very, important body of i the public in Australia, These customers, whether they be debit or credit customers, have a vital interest in the proper conduct of banks’ affair’s. The next group is the much larger body comprising the employees of the customers. Very few of these people take account of the services which the bank gives. Yet the payment of their wages and salaries regularly is of vital importance to them in their daily life, and if it were not for the bank collecting anp paying the money the employer would not be able to pay the wages on the day on which the latter were due. That is a matter which should bo brought under the notice of that vast body of people who in the next few weeks will be asked to vote for a Party that wishes to nationalise the banks. Their again very few of use realise how the Governments lean on the banks. We have seen, especially in the last few years, how Governments have been coming to the banks and receiving assistance more assistance than tlrev ought to get Some Governments, when the banks were forced to tell them that the time had come when they could not get much more, turned round and abused the banks, lire fourth group, consisting of the bank officials, has already been referred to, and the next is that important body—the fixed depositors. The total of ; fix 'ed deposits in the trading banks in i Australia on 31st March, 1934, was the ‘ Huge sum of £188,C00,000. Is the Government, or anybody else, to be permitted to tamper with that immense sum, winch has been given to the banks on trust by so many interests in the community. Lastly, there are 70,000 bank shareholders scattered throughout Australia, and also in other parts of the P°s, Sc3^ n a funds amounting to £69,4i9,000. What is the Government, going to do with that money? We have been- tolcl thr.t if the Labour Party is returned. to power with a substantial ma« joritv in both Houses it will immediately take up the question of nationalising tlie banks. Y\ e are assured by some that compensation would he granted, but it is quite clear from the utterances of others that none would be granted if they mid their way, and I agree with previous speakers that/ it is the duty of shareholders, bank officials, and all interested in 11 1 3 welfare of our country to see that these facts are made known to people who do not know them to-day, so that the distortions that* will bo put before the electors may bo counteracted m every part of Australia.”