SERVICE BY BANKS

Wanganui Chronicle, Volume 80, Issue 245, 15 October 1937, Page 5

SERVICE BY BANKS

VALUE TO COMMERCE LOOSE TALK DEPRECATED Loose talk about the banks and the seiv.ee they give was deprecated by She lion. J. G. Cobbe (Opposition— Orcura) during the financial debate in the House o£ Representatives on Friday. Banks, he said, had grown up as a result o£ the great expansion of commerce and had become necessary, important and useful adjuncts of modern civilisation. Had they failed to fill an essential place in the business world they would have disappeared long ago. Referance was made by Mr. Cobbe to the statement of the Prime Minister, Mr. Savage, that the banks were not giving 100 per cent service. Banks were important business concerns and in the British Dominions and coli onies they had done much to promote the progress of settlement. Had it not been for the help of the banks trade, manufacturing and farming would not be as far advanced, nor as successful, as they were to-day. Traders in Money A bank was at any time prepared to advance money at the current rate to any person of good reputation who had reasonable security to offer, continued Mr. Cobbe, but the money it lent belonged either to its shareholders or depositors. As trustee for them it must be satisfied with the security offered and the honesty of the borrower. Banks were traders in money.

“Members of the Opposition,” said Mr. Cobbe, “do not hold any brief for the banks, but we are alarmed at this loose talk about commandeering them and are concerned at its possible effect. I do not think for a moment that the Government wishes to bring about any financial crisis, but the loose talk often does harm. New Zealand can only regard with consternation any attempt to place complete monetary and banking .control in inexperienced, irresponsible and socialistic hands. Socialism and Inflation “The Government has already departed from the fundamental principles of central banking by the issue of more currency than is required for trade and ordinary purposes. In placing the Reserve Bank under political control it has done the one thing that experience has shown it should have avoided.” New Zealand, continued Mr. Cobbe, was threatened with both socialism and inflation. The issue of currency of an amount greater than that required for the trade of a country was inflation, especially so when the notes were issued for payments necessary in connection with extensive public works or Government requirements. Tinkering with currency, whether it be called inflation or a greater use of the public credit, meant ruin and general disturbance. “In New Zealand we have a socialistic government ,and socialism is the worst enemy of individual freedom,” Mr. Cobbe concluded. “Pages of boastful rhetoric in the Buget cannot hide the fact that there is an insidious attempt to smother individual freedom under the blighting tyranny of State control.”