Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-04-09
AUSTRALIA WANTS
CONTROL OF BANKS
Federal Labor Party Given
Flat Refusal of Credit
by Melbourne Firm.
BY Cable to The Star.

by Cable to The Star.
MELBOURNE, Australia, April
(N.AN.A). - Although up to the
present the ruling Federal Labor party,
which dominates the government in the
absence Of the prime minister, Mr..
Scullin, has failed to bludgeon the
banks into submission to its so-called
wildcat" financial policy, there are in
dications that it will persist with its at
tempt to effect naturalization OF bank
ing in Australia.
So far the Commonwealth BanK-tne
national inStitution-haS Wlthstood the
assault Recently the full cabinet met
the bank board in conference in Mel
bourne and demanded credit OF $lOO,-
600. 900 to "rehabilitate industry" ana
to provide for immediate government
needs.
The chairman of the bank, Sir Rob
ert Gibson, told the ministers Dluntly
that the institution simply could not
"carry" the government any longer.
The credit was refused. Then followed
dire threats by radical ministers that
bank bill would be introduced next
session to place the Commonwealth
Bank definitely under political control.
such a measure, however, has no pros
pect of passing, because the government
Is in minority in the Senate.
Loan OVeTSuUSCElUcus
The bright spot on Australia's eco
nonic and financial horizon is the over
subscription of the conversion loan OF
<I4o oo0 600. In new cash and con-
versions nearly S150,000,000 was applied
for an indication Australians still have
faith in their country. The result OF
the loan was favorably received IN Lon.
dom and Australian stocks, which nao
slumped heavily, improved.
The trading banks OF Australia nave
concluded an important conference In
sydney In a manifesto the conference
declared that continuance OF demands
nv governments on the resources OF the
hanks would force drastic curtallmentS
of accommodation, with resultant serl-
ons losses to industry. 1t pointed out
that in the last three years the aool-
ional assistance given by the banks 10
the Australian community and TO Aus
tralian governments in Austrana anu
London amounted to S350,0O0, 600.
THE banks manifesto proceeds: :,
"IJnless effective steps are lmmeol-
atelv taken by the governments OF AUS
tralia to balance their budgets and re-
dlIce costs. the time is coming wnen
banks and other financial mStltutloliS
will be unable to assist the governments
TO meet salaries, wages ana otner COM
mitments except at the expense OF
widening the gap already in evidence
between the costs of and returns from
Australian industries.
Position Held Serious.
"The seriousness of the drifting po-
sition was fully explained to the rep
resentatives of all the Australian gov
ernments at the conference OF premiers
in Melbourne last August. If the policy
embodied in the resolutions OF that
conference had been fully carried INTO
effect the drift could have been checked
Unfortunately that policy Is not being
fully observed, and banks are faced
with heavy demands to enable govern
ments to meet their daily obligations.
1.-THE continuance of such demands,
in disregard of the very heavy reduc-
ton of the real income Of the nation,
will force upon the banks drastic cur
which are imperative to the contlnu-
ance Of productive industry.
This would involve serious loss TO
many of our industries, both primary
and secondary. AS these industries give
employment to IS per cent OF our work.
ing population, the <result. sooner or
later, would be vast increase OF I'M
employment and of government ex-
penditure in relief thereof.
Cost Curtailment Asked.
"The banks are unable to accept such
q policy as sound, and can take no re-
sponsibility for the consequences which
must inevitably follow unless there is
drastic curtailment of government ex-
penditure and sactive cooperation by
governments in the reduction OF costs.
1.-THE banks make this statement
without the slightest desire to dictate
the policy of governments. 1t Is
statement of fact which they consider
should be made for the information OF
the public.
Notwithstanding the seriousness OF
the position, 1t must be clearly under
stood that the danger to Australian
industries, both primary and secondary,
can be averted only by return to
sound economic basis. If this is done
the banks will be willing to meet the
situation as far as their resources and
responsibilities permit.
Revenues DwindIe.
'The discrepancy between Aus
tralian costs and the returns obtain
able for our products is largely inter-
fering with the normal reduction or
repayment of bank advances. Stimuli
taneously Government revenues have
dwindled, notably those from taxation
of trade at the ports and from railway
traffic. As this has not been accom-
panied by the necessary reduction in
expenditure. banks have been called
upon to make additional advances to
governments.
las much of their ordinary and gov
eminent advances are, because of eco
nomic conditions not liquid banks
have had to withhold facilities which
would otherwise have been available,
and this has caused in some minds
the idea that banks have been delib-
erately restricting business In truth
the banks have made efforts unparal-
1eled in the history of the country to
help all classes Of the community.
In order that the banks may con-
tinue their task of supporting indus
try, trade and administration of gov
eminent, it is now imperative that in
dustry and trade be placed on a basis
that will show margin for the living
of the producer and for the mainte-
nance of solvency in public and pri-
vate finances throughout the common
wealth"
(Copyright. 1881. by North American News
paper Alliance