RUN ON SAVINGS BANK.

New Zealand Herald, Volume LXVIII, Issue 20863, 4 May 1931, Page 9

RUN ON SAVINGS BANK.

federal CUSTOMERS.

LONG QUEUES IN SYDNEY.

AUTHORITIES alarmed.

broadcast by chairman.

STABILITY AFFIRMED. Uj Telegraph—Press Association— Copyright. (.Received May 3, 5.5 p.m.) SYDNEY, May 3. 'Apparently alarmed by recent develop, and by the question in the Federal House of Representatives whether had been a run on the Commonwealth Savings Rank, the depositors in th.it institution displayed sonic fear which resulted in considerable withdrawals yesterday. Long queues waited in the street, outtic'e the headquarters of the bank and the police controlled the crowds, who v rre anxious to? withdraw their money, until the closing hour of noon. 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. Tt is regarded'as likely that the bank will dci-ide to ration withdrawals early in the week. /

Inquiries elicited that the majority of tho bank's customers who withdrew their deposits are transferring their accounts to <h,3 trading banks with external charters, including the New Zealand banks, or arc nsng safe deposit receptacles. Backing oi the Note Issue.

The chairman of the Commonwealth Hank, Sir "Robert Gibson, in a speech which was broadcast to the four States at 9 p.m. to-day, assured its customers that tha Commonwealth Bank would never close its doors. The Commonwealth Bank had tho back-

inj; of the note issue, and he had the authority of the, Prime Minister, Mr. J. H. Seullin, to say the Government would support the bank board in any extension cf the note issue, deemed desirable in any emergency, and the bank would meet every demand made upon it. Quito a number of timid pcoplo feared that the Commonwealth Bank would close, its doors. I know no safer place for oivj's savings than in the Commonwealth Bank," said Sir Robert, "and if anyone thinks he can find a safer place, then by all means let him conic to the bank and take his money away.' Sir Robert stated that Saturday's run on the Commonwealth Savings Bank was dus to timidity on the part of new customers, who had withdrawn their savings frcm the Government Savings Bank, and were largely responsible for its failure. Those same people, his officers informed him, were now rushing to the Commonwealth Bank to transfer their accounts to some other bank which they thought sale)'. 1 New Customers Not Wanted. Quite definitely he wished to tell those people that tho Commonwealth Bank did not want their business, and the sooner they took their money out the better tho Commonwealth Bank would like it. The Commonwealth Bank wanted regular and reliable customers. So far as the old customers of the ' Commonwealth Bank were concerned, he could assure them that the bank board would do nothing to jeopardise their savings in any respect. The Lang Government's new plan to compel the insurance companies to lodge cash guarantees is also causing the utmost concern, following so closely upon the Government Savings Bank debacle. The companies are offering no objection to the general principle of lodging securities as a safeguard against fraud by mushroom companies, but they say there is something sinister in the proposal that cash should be provided for the Government / instead of Government bonds.

The holdings of the life insurance offices in New South Wales bonds amount to £7,427,000.