Political Control of Banking

Hawke's Bay Tribune, Volume XXV, Issue 148, 8 June 1935, Page 6

Political Control of Banking

(To the Editor.) Sir,—The Socialist-Labour Party in England has declared definitely for the nationalisation ot the banks. The case fdr nationalisation is not based on present mismanagement, but upon the fact that the banks are independent. “The pivot of any economic system lies in the control of its currency, its banking institutions and its methods of investment. Such control is a necessary foundation of Socialist reconstruction, and without it the achievement of the party’s aims will be impossible.” This is the frank statement of the party; once the banks are in possession of the Socialists, the “capitalist fortress” is won. There is no pretence whatever that the control, when gained, will be impartial or non-political. The directors put in charge must show their “ability and willingness to co-operate loyally in the work of Socialist reconstruction.” To quote Mr. Lansbury, a director must be “a convert to our policy.” No depositor in any bank will be able to feel that his savings will be used on safe lines. They will be entirely under political control, and the Government will have the free run of whatever funds there are in the banks. This is evidently contemplated by the LabourSocialist Party in New Zealand, for one of its leading members has declared “that if the Government had a majority on the Board of the Bank of New Zealand we could get all the credit we want.” Even it the banks were nationalised, the same problems would have to be faced. The soundness of borrowers and of the propositions financed would have to be considered; if this were ignored for political reasons the depositors’ money would be tied up or lost.— Yours, etc., N.Z. WELFARE LEAGUE. June 7, 1935. i