DANK EXCHANGE RATES

Taranaki Daily News, 25 November 1929, Page 9

DANK EXCHANGE RATES

LABOUR CABINET’S IDEA - —< CLIPPING THE BANKS’ WINGS STATE CONTROL ELEMENT By Telegraph—Press Assn.—Copyright. Rec. 5.5 p.m. Canberra, Nov. 24. The Labour Ministry’s new banking proposals involve the removal of the present restrictions on the proportion of notes to the cash reserve and the transfer of power to fix exchange rates with London from the Associated Banks to the Commonwealth Bank. Mr. F. Anstey, Minister of. Health, forestalled Mr. E. G. Theodore, who is Treasurer, with the explanation of the Government’s intentions. Mr. Anstey declared the banking institutions must cease to be the masters and must become the servants of industry. He pointed out that exchange rates at present were not fixed in accordance with the movements of money and credit between Australia and London, but largely on the result of secret understandings between private banks. In those periods of depression, continued Mr. Anstey, it was essential that advances should be made on good security. Labour would enable the Commonwealth Bank to have the opportunity of providing a great service to the nation, and the private banks must follow suit or perish. Thus industry would be promoted, employment would follow and prosperity would be the outcome. America’s prosperity, Mr. Anstey claimed, was largely based on the progressive policy of her financial institutions. IMPAIRING NATION’S CREDIT. NEWSPAPER’S FRANK COMMENT. r— Rec. 5.5 p.m. London, Nov. 24. The Financial News states that the new super-tax proposals will accentuate the complaint of double taxation from those liable both here and in Australia. The efforts of the increased Customs duties may be considerably more serious. Manufacturers here will necessarily be injured, while from Australia’s stand-point the tariff changes will perpetuate the policy which already has been condemned as contributing to that failure of expansion of national income which is the root of Australian financial difficulties. The writer of the editorial awaits details of the banking proposals and says a disturbing element lies in the source from which they proceed. “Mr. Theodore has admitted Australia’s credit is somewhat impaired,” the paper concludes, “and his statement has not given grounds for thinking he is on the right road to restore it.”