London Financial Circles See No Justification for Bank Nationalisation Plan

Otago Daily Times, Issue 26545, 21 August 1947, Page 7

London Financial Circles See No Justification for Bank Nationalisation Plan

Rec. 8.30 p.m. LONDON, Aug. 20. The statement that the Australian Government is preparing an actual Bill to nationalise Australian banking came as an undoubted shock in London, says the Financial Times. The indications are that such a measure will be strenuously opposed by the banks and other interests. ' The point raised in London is whether the proposals to nationalise banking go outside the mandate on which the Government was elected. The view is expressed that {here is no justification for the nationalisation move in view of the powers which the Government already possesses. These powers of control over the Australian banking system go far beyond anything that has resulted from nationalisation of the Bank of England. Referring editorially to the Commonwealth Government’s proposal to nationalise banking,, the Financial Times says that clearly the decision cannot have arisen from any failure of the private banks to meet the Commonwealth’s needs. The 1945 Act had already laid the foundation of a- banking system in which a central bank and the trading banks would come more effectively under State discipline.than in any country outside Russia. The Government’s plans are sure of a stormy passage, adds the Financial Times. The recent High Court decision was a setback to the Government and an equally vital constitutional principle is involved in the new proposals. If the High Court holds that the Governments proposed action involves encroachment on the private and financial affairs of individuals, then a referendum would appear probable and the Australian Government has not been particularly successful in past referendums.