BANKING POLICY

Evening Post, Volume CVIII, Issue 133, 2 December 1929, Page 13

BANKING POLICY

CHANGES IN AUSTRALIA

FAR-REACHING PROPOSALS

(From 'The Post's" Representative.) SYDNEY, 2Sth November.

How the Federal Labour Government proposes to encourage prosperity by liberalising credit, and how it will ioform. the Commonwealth Bank with, this end in view, has been told by Mr. Prank Anstey, Minister lot Health, and one of tho party's foremost economists. Why it should havo been left to Mr. Anstey to explain a.L this is a mystery, as it seems to be the particular job of the Treasurer (Mr. Theodore). However, tho fact remains that Mr. Austey has been the spokesman of tho Ministry, and the plans seem to have been formed so definitely that ho cannot be accused of kite-flying. Of course, My. Anstey was appointed one of the members of a sub-committee, which also included the Prime Minister and the Treasurer, and this gives considerable weight to his views. , The Bill embodying the far-reaching view of Labour is expected at any time, an.d is evidently regarded as urgent, for this is not supposed to bo a business session.

Confirming the announcement that tho proposed legislation to deal with gold reserves would transfer the complete control to the Commonwealth Bank, Mr. Anstey indicated that this was a prelude to the fulfilment of Labour's promise to strike off the shackles that bind the people's bank. "I agree with President Hoover," he said. "Because depression exists there i? no reason why suppression of deflation should follow. In these periods it is essential that the advances should be made on good security. Advances should be made to anybody who has a good security to deposit, "in this way industry is prompted; naturally employment follows, and, of course, that means prosperity. America found that out long ago, and the progressive policy of its financial institutions has been a tremendous influence- in tho country's prosperity. Labour will see to it that the Commonwealth Bank is afforded the opportunity of providing this great service to the nation. As the private institutions must follow or perish, this will bo of incalculable service to industry and to general prosperity."

Mr. Anstey says that there is nothing revolutionary in the proposal to control the gold reserve of Australia. Ho Mentions, in fact, that Australia is probably the only country which has not taken steps to vest this important function in the nation's bank, and he recalls that it was only last year that Britain came into line with, the measure adopted by other great nations before the war. One of the objects of tho measure is to secure tho Commonwealth Bank against depletion of its gold reserves by the operations of other banks, and so protect it from any move to weaken its prestige. The Bill is described by Mr. Anstey as an important preliminary measure to the strengthening of the national credit, and the removal of antediluvian.theories that obstruct public and private developmental ventures, and to taking a lift along the road to prosperity. It is also proposed that the control of the exchange rate between Australia and other countries should be vested in tho Commonwealth Bank, instead of in the private banks. Bankers say that the Commonwealth bank cannot be a reserve bank and a trading bank as