ECONOMIC CRISIS FEARED

Otago Daily Times, Issue 26543, 19 August 1947, Page 5

ECONOMIC CRISIS FEARED

REASON FOR GOVERNMENT ACTION Rec. 11 p.m. CANBERRA, Aug. 18. According to an official statement today. the Commonwealth Government decided to nationalise banking because it feared an economic crisis. To meet this threat, the leaders of the Government decided that it was necessary that they should have cornplete control of banking and monetary systems. Mr ( Chifley believes that the crisis will be an inevitable sequel to the plight of Britain and Europe, and an unavoidable large-scale depression in the United States. Senior Ministers believe that it will be two years before the plan operates. Meanwhile the Associated Banks’ meeting in Melbourne to-day decided to engage counsel for the legal battle. A senior Minister revealed that before the High Court decided that the Commonwealth did not have the power to force public bodies to conduct their banking business with the Commonwealth Bank, Mr Chifley asked the Ministers to turn over in their minds the question of nationalisation. When the court gave its adverse decision their minds were made up. The Attorney-general, Dr H. V. Evatt. and the Government's legal advisers believe that the Government has ample constitutional power to support its decision. A delay is expected because the Opposition will use all the forms.of the House to delay its passage, and once the Act is proclaimed the private banks will launch their legal attack. Dr Evatt has left Canberra to confer with constitutional advisers and banking and Treasury officials in Sydney. The ' officials announce that British trading banks operating under licence in Australia will have their Australian branches taken over by the Commonwealth. Branches of Australian private trading banks in other countries will be embraced by the general banking plan.