COMMONWEALTH BANK

New Zealand Herald, Volume LXXIII, Issue 22315, 13 January 1936, Page 11

COMMONWEALTH BANK

SUCCESSFUL EXPERIMENT AID TO NATIONAL DEBT SYDNEY BARRISTER'S VIEWS "I believe that Australia and New Zealand have a great deal to learn from each other," said Dr. Frank Louat, a prominent Sydney barrister, in the course of a broadcast address from station IZB last night, when he referred to the common problems of these countries. "Our two countries share in common the problems, the difficulties and the actual dangers of isolation in the Southern Pacific," said Dr. Louat. "We in both Dominions are wrestling with the great world problem of the twentieth century—the problem of how every man and woman can live a full life and get the full benefit of what science, with its miracles of production and transport, has to offer. Both countries are tackling this question in the only spirit which will ever solve it—the spirit of restless search for the truth and readiness to try new ideas." A National Asset Speaking of Australian experiments in the matter of public finance, Dr. Louat said the establishment of the Commonwealth Bank was one achievement which stood out head and shoulders above everything else. It was a national trading bank, owned by the j people as a national asset and managed I in their interests. He believed it was i the only trading bank in the world j which was actually owned by the j people. It had made huge profits, half of which went to swell the reserves of the bank and the other half to reduce , the national debt. In addition to being a trading bank, i he said, it performed two other important functions. It had a savings hank department, the solvency of which j was backed by the note issue, and in j which practically the whole of the | money savings of the Australian j people were invested. As well as this, ' it performed the task of arranging I finance for the various Australian j Governments, enabling money to be j found for public works and re-employ- j lnent. Help in Times of Crisis "The Commonwealth Bank has no shareholders," said Dr. Louat. "The whole of the money necessary to start its operations was found by the Government. It was established in the teeth of bitter opposition,, but now, after more than 20 years of its life, there is not a man who could dare to suggest publicly that it ought to be abolished. Although its history is short, it has lived long enough to be of invaluable help to Australia in two separate financial crises, namely, the Great W*ur and the depression." Referring to the closing of the New South Wales Government Savings Bank, Dr. Louat said there were many contributing causes of this- disaster, and the real reasons for the event were still a matter of controversy. It was certain, however, that one important cause was unwise election propaganda, which had undermined the confidence of the people in the institution.