CONFIDENCE SHAKEN

Wanganui Chronicle, Volume 74, Issue 114, 16 May 1931, Page 8

CONFIDENCE SHAKEN

CLOSING OF STATE BANK DEPOSITORS ON RATIONS. SYDNI Y, May 8. Thousands of workers who left their meagre deposits in the State Savings Bank on the understanding that a Labour Government would never let them down find that thy are unable to touch their savings. The State Bank was opened this week, but unless depositors can show th:.*- they are destitute, with no other income, they are unable to withdraw. Even when inquiry shows their claims to be correct, depositors with £lO or loss are alowed only £1 a week; with £2O, £2 a week; and in no case is a depositor granted more than £3 a week. The reaction of the closing of the Government Savings Bank was felt so severely, and came as such a blow to the confidence of bank depositors, that a particularly heavy run set in on the Commonwealth Bank. Depositors were withdrawing all their money, and placing it in the trading banks. People argued in this manner: If Lang was so unscrupulous as to default, to us; Scullin may do the same to the Commonwealth Bank. In that case, we have some chance of recovering from trading banks, while a bill could be put through the Federal House wiping out all claims on the Commonwealth Bank. The consequence was that- on Saturday there was a rush unprecedented in the history of the Commonwealth Bank. Usually the bank closes at noon, but the last customer had not been satisfied until 4 p.m. The position was so serious as to necessitate a broadcast address by Sir Robert Gibson, chairman of the Commonwealth Bank Board. This was given on Sunday night, and it is safe to say that every person in Australia who had access to a receiver listened to his announcement. “The Commonwealth Bank will never dose its doors so long as the nation stands,” he said. He deplored the timidity of depositors, and invited those who had any doubts as to the bank’s stability to withdraw all their money. “We don’t want that type of depositor,” he said, “and we will appreciate it if you will come in and take all your money away.” Sir Robert Gibson ’s reassurance had an immediate effect. Banking business in the Commonwealth Bank has returned to normal dimensions.