IRISH BANKING

Evening Post, Volume CXXVI, Issue 82, 4 October 1938, Page 14

IRISH BANKING

"PRUDENCE AND SKILL"

' The Irish Banking Commission which was appointed in November, 1934, has recently delivered: its report consisting of nearly 700 pages. The terms of re-j ference covered, in addition to banking and currency, State and local borrowing and the pledging of State credit j for agricultural industry and social] services. I The report consists of one majority | and three minority reports.. The former, to which are appended four addenda, one note, and three reservations, is signed by sixteen of the twenty-one members. Of the minority reports one is signed by three members and the other two are individual efforts. As to currency and banking proper there is little said. The present parity of exchange under which the holder of an Irish pound has the right to demand a pound sterling in exchange should not be disturbed. The whole banking system has been subject to the most searching examination, with the result that certain members who came rather inclined to curse remained to bless. MERGER REJECTED. The report declared: — "Banking is conducted with a high degree of prudence and skill; the cost of credit to an Irish borrower compares favourably with that anywhere else;] accusations of inhumanity towards j farming customers have been examined arid found to be unwarranted; the public has an exaggerated idea about the profits earned by banks; the banks place no restrictions on ■ the supply of normal commercial credit. The proposal to merge all commercial banks into one publicly owned and controlled unit is rejected." These are the main conclusions arrived at after long and patient inquiry by sixteen men, of whom only three represent banking interests. Recommendations are technical and minor in character. . , STATE BORROWING DANGEROUS. The most important section of the report is that which deals with public borrowing by the State and credit facilities through State agencies such as the industrial and agricultural credit corporations. Generally it is recommended that finance of this kind is dangerous and should' be drastically curtailed. It is advocated specially that there should be no increase in the dead weight public debt, and moreover that its volume should be reduced. In this connection the Douglas and other schemes of this character which create credit without cost are condenined as: impracticable. It, is round these limitations on the Government borrowing and State credit that most controversy is expected to revolve.