STATE BANKING

Otago Daily Times, Issue 22504, 23 February 1935, Page 11

STATE BANKING

TO THE EDITOB Sib, —Mr P. Neilson, in your columns a few days ago, quotes a laudatory notice of the Commonwealth Bank by Dr L. C. Jauncey, who has written a book, “Australia’s Government Bank.” An imposing array of figures is presented and we are told that when the Labour Party secures power it will rectify a mistake made by the Seddon Government in not backing up Mr Martin Kennedy when he declared that complete control of the finance and funds of the Bank of New Zealand should be vested in the Government. Labour’s rectification will vest the control of the Bank of New Zealand (possibly all the banks) in the hands of the “ people,” thus placing the Dominion on the same exalterj plane as the Commonwealth Bank. The Bank of New Zealand, it may be said, has, since 1895, without undue interference or complete control by any government, achieved an unblemished record. Its depositors, as distinguished from its shareholders, are full of confidence as to its existing position and future, whilst the shareholders. 4000 of whom carry holdings of about £2OO only, find the yearly dividend an agreeable reward for their thrift and perspicuity. The Government itself has an item of £2,500,000 representing, goodwill—quite a. good remuneration for the guarantee—and in income tax. land tax, note tax, and dividend secures a handsome yearly revenue. Incidentally, it may be said that in taxation the Commonwealth Bank pays nothing, unless of course the position has been altered recently. Mr Neilson’s party in its scheme of rectification will place the “ people ” in control, to the alleged benefit of not only the depositors and shareholders, but of the whole body politic. He himself is quite evidently under the impression that Dr Jauncey’s figures present the beneficent results of “ people’s ” control in banking matters. May I be allowed to point out that in the management of the Commonwealth Bank the public has had no say whatever —not from it? very inception—and has had as much to do with its onerations as I had in the military activities of the Israelites at the battle of Rnmotli-Gilead. The control of the bank has ever been divorced from any Government interference. Sir Denison Miller was an intolerant dictator with a keen sense of the absolute of being at the beck and call of this, that, or the other Government. Sir Robert Gibson

kept up Sir Denison s tradition in its entirety, and whilst it may be granted that the “ people ” in Australia waste a paltry £7,000,000 per annum in providing their own consumption of sugar, it is equally true that the Commonwealth BanK, bv being completely out of their hands, was wisely protected from the visionary issues and facile convictions of successive Australian Governments.—l am, etc., Dunedin, February 20. -41-