BANKING REFORMS

New Zealand Herald, Volume LXXV, Issue 23111, 9 August 1938, Page 5

BANKING REFORMS

AUSTRALIAN LEGISLATION A POSTPONEMENT LIKELY DILEMMA OF GOVERNMENT There is a strong likelihood of the Federal Government postponing until next year the introduction of the legislation giving effect to the recommendations of the Banking Commission, according to a Canberra report. Chief of the reasons which would prompt this decision is the anxiety of the Federal Government to avoid hostility in the ranks of its supporters against any phase of the proposed legislation in view of the pending £"0,000,000 conversion loan. The proposed banking bills, it is understood, will be in two forms —one establishing a mortgage bank and the other dealing with the recommendation of the Banking Commission that private banks lodge part of their deposits with the Commonwealth Bank. In view of the election promise of the Prime Minister pledging the Federal Government to legislation "to strengthen the banking structure," the Government now finds itself in an awkward position. If it proceeds with the promised legislation, it must face opposition within its party ranks to compulsion on private banks to lodge portion of their deposits with the Coinmonwealth Bank, while abandonment of this phase of legislation would invite the charge i'rom the Opposition that the Government was pandering to the interests of the private banks Opposition to the recommendations of the Royal Commission on banking with regard to the transfer of any percentage, of deposits at present being held by the trading banks to a central bank being given effect to was expressed last week by Mr. R. J. Hawke in his presidential address to the Sydney Chamber of Commerce. He thought there would be ample time for every section of the community to consider what might certainly be a threat to the present banking system of the country; the system which hitherto had withstood the depression and emerged with added strength.