THE BANKS AND THE PEOPLE

Press, Volume LXXI, Issue 21411, 1 March 1935, Page 12

THE BANKS AND THE PEOPLE

Defence of Present System DANGER IN THEORIES The part played by the banks during the depression and the danger of allowing subversive theories concerning the present financial system to be freely circulated were subjects dealt with by Mr A. V. Winchester, retiring manager of the Bank of Australasia, at a farewell gathering held at Bcath's tea rooms yesterday. "In 1926," said Mr Winchester, "the barometer was set fair. It was a period marked by some extravagance, for exports were good and their volume had been increasing for many years. The standard of living was higher than it had ever been before. The poor are always with us, but unemployment and crushing taxation such as we have now were unknown. "But since 1912 borrowing had taken place at the rate of £5,000,000 a year, exclusive of the £80,000,000 borrowed for the war. Though they did not apprehend the full extent of the catastrophe the banks knew that values were out of hand and bore no relation to productive capacity. The welfare of the banks depends on the welfare of the community. For 30 years they had been building up reserves. They were blamed in some quarters for being too conservative and in others for lot being conservative enough. But they brought banking through a most severe crisis and their customers with them; they gave help to the government here and in the Australian states.

Newspapers and Free Speech "It is a pity," said Mr Winchester, "that the circulation of ill-conceived and pernicious criticism has been so freely allowed." He admitted that free speech was an excellent thing for education, enlightenment, and argument. "When our economic troubles commenced the newspapers were flooded with ideas as to what was wrong, and with suggestions for the overthrow of the present banking and commercial system," he said. "The system has stood the test of centuries and a most severe crisis. Until something better is found, it would be suicide to destroy our financial system, which is the envy of the world. The standard o v living is higher now than it was 50 to 100 years ago. "If these perorations are allowed in the paper it is a pity that some means is not taken, perhaps the addition of footnotes, to prevent people from being led astray. The banks have neither the time nor inclination to do this. "The press has position and dignity to maintain, but it gains in neither if it allows too free access to its columns."