The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, APRIL 29, 1931. NEW SOUTH WALES BANKING.

Hokitika Guardian, 29 April 1931, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, APRIL 29, 1931. NEW SOUTH WALES BANKING.

Tin: temporary closing of the Governmc.it Savings Biinlt in Sydney and its brunches tumugliout the Slate, pending its absorption by the Commonwtalm Hank, is, the Christchurch Times considers, tiie most serious development in that State for many years. The fact that at the end of the last financial year there were 1,330, 900 depositors representing nearly 55 per cent, of the population of the State, indicates the individual interests affected, and the widespread anxiety caused, n New Zealand the operations of the State Savings Bank are strictly limited, but in New South Wales they cover a very much wider field. There is there,' of course, the usual deposit business, but the Commissioners also control the Rural Bank, and in addition have been entrusted with tho liquidation of advances made by tho Government Housing Department. In a recent statement it was shown that nearly 19,olK) farmers had obtained loans from the Commissioners, and that over .24,000 citizens were purchas. ing their homes with State assistance. Made apprehensive by the retrogressive measures of the Labour Government with its talk of repudiation, and the drastic limitation of interest rates, depositors have been withdrawing their money and investing it in sonic other State.. It was reported some time ago that, interest payments due to the bank by the New South Wales Government were behindhand, so that the Commissioners, obviously, were unable to stand anything in the nature of a “run.” and for some time past have curtailed advances because ot the shrinkage of deposits. Efforts have been made to restore public confidence, and a week or two ago tile Premier issued a statement to the effect that “th e bank’s deposits, being guaranteeded by the State of New South Wales, bad behind them all the resources of the community.” Unfortunately, confidence in the political position has largely disappeared, and in efforts to safeguard their individual savings depositors have made it impossible for tho State Savings Bank to meet the demands upon it, and payment must be suspended until the greater resources of the Commonwealth have been made available. The experience in New South Wales shows how easily it is to lose tho confidence of capital.

The depositors are not capitalists in the general acceptance of the term, but the small investor or the man of thrift is iust as jealous of tho saiety of his money and savings, as the large depositor and man of means. Security is everything in backing business, and confidence on both sides of the

counter is necessary to assure safe stability. The institution which lends is as careful to see to the bona tides of its clients, ns the depositor is to see that his money is lodged in a sound institution. This interchange of relations is built on confidence, and as long as that exists, all is well. In New South "Wales the politicians play a very big hand in the State institutions, and the fads and fancies of the controlling forces has succeeded in wrecking tcmnorarily at least an institution which in the face of it has done groat things for the country. To restore that To c t confidence will be difficult indeed. but the State must come to the rescue a.rd it is nroposod now to absorb the Pavings Bank in the Commonwealth Bank This will be a delicate business for those concerned, anil confidence is not likely to he restored till the present Labour leadership in State affairs is ousted and a party more sane and stable placed in power.