STATE BANKING.

Taranaki Herald, Volume LXVIII, Issue 16762, 11 June 1920, Page 4

STATE BANKING.

ADDRESS BY MR. LEO SIM. A public address, under the auspices of the New Plymouth branch of the Labour Party, was given by Mr. Loo Sim in tho Workers’ Social Hall on Tuesday evening, the subject being “The Establishment of a State Barit in New Zealand.” Mr. AV. H. Tweedale presided over a moderate attendance of the public. Mr. Sim, at tho outset said one of the most important reform, needed in this country was the establishment of a State Bank. It was most imperative for the Government to have the hacking of tho financial forces for the controlling of tho country. The establishment -of -suolj. a- bank would load to the elimination of exploitation of tho public generally. The present system of hanking was the mouthpiece of capitalism, and was run for' tho purpose of creating large dividends for the ■shareholders.

The speaker went on to say that banks are built upon the basis of the good faith and confidence of the public, and are dependent on the public tor the upholding oi) the credit system. Those who have followed the course of hanking legislation in New Zealand during the war know what anti-social methods have been adopted. The banks have been allowed to exploit public credit to the detriment of public welfare. Before tho war' bank notes were payable on demand, so that if tho hanks issued more paper than was called for by the business of the community, it simply came back on their hands.

Continuing, Mr. Sim said that if any bank in New Zealand defaults, the people of this country, through the Treasury, will have to pay the bill. The banks are exploiting public credit; they are making a. good profit out of it and, if there is a loss, the people have to pay the piper. Tho present Government is not interesting itself in State monopoly of ariy kind, so any reform in the banking system is not anticipated in the near future. Here is another instance of tho methods adopted by the ■ banks, detrimental to the public interest;—ln 1913, £1,674,333 worth of notes were issued ; in 1918 it was increased to £6,761,705 worth. The. final security for tho issue of a great amount of this paper is through a State guarantee, the work of the people as a whole. If there are profits, tho banks take them; if there are losses, the people bear them. This method was adopted some years ago when the State had to come to the assistance of tho Bank of New Zealand.

The establishment of a State bank, continued Mr. Sim. would prove a big factor in tho decreasing of tho cost of living, and incidentally tho unrest which is at present apparent. Some years ago when the Commonwealth Bank was ostablihsed there was a groat outcry that it would be a failure, ■ but time has proved it to bo one of the many successes of State enterprise. This institution, during the war period, was instrumental in floating five or six loans, and over £150,000,090 was subscribed locally. In conclusion; the speaker pointed out that in tho event of a State bank being established in New Zealand, it would not be necessary to establish, a State mint also, as tho gold could bo minted in Australia or England, where mints are already in existence. Numerous questions were asked and answered, and a vote of thanks to the speaker and a similar compliment to tho chairman, concluded the meeting.