A State Bank.

Observer, Volume XI, Issue 752, 27 May 1893, Page 3

A State Bank.

It is instructive to read that the action of the Government of New South Wales in giving an. official guarantee was very effective in allaying the financial panic in Sydney. But, after all, what better argument can be urged for the establishment of a State Bank than this same guarantee. If the State— i.e., the people— can be called upon in cases of emergency such as this to step in and bolster up private enterprise, why should it not also have the profits- as well as the risk? We are all conscious that the effects of a financial panic are wide and far-reaching, and that they are prejudicial for the time being to the progress and welfare of the country, and also that these periodical ' rushes,' if persisted in, would break the soundest bank that ever existed.

Why then should we not take this decisive step towards sincere Socialism of keeping the banking business of the country in the hands of the country itself ? Under this system, there would be a perpetual State guarantee, inspiring confidence in the mindß of investors and depositors alike. The immense profits derived from banking business and from the use of a paper currency would belong to the State, and the State would guarantee the customers of the bank from losses by fraud or mismanagement. Banking is a source of immense wealth to individuals ; why should it not also be a source of immense wealth to the State ? At all events, the Government guarantee to the banks in New South Waleß is bound to set people thinking.