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Hokitika Guardian, 6 May 1931, Page 4

.HE internal financial plight jf Australia is a very.serious matter. , It is .clear that the investing public are losing confidence in the. security of the State banking institutions .consequent of the vagaries attending Labour’s, ideas of high finance. The, closing 01 the State Savings Bank was no doubt a serious blow to-public confidence. Mr Lang’s policy generally unsettled the public mind as to the security for their deposits, and the depositors |, e inn- largely of one mir.d, a 1 run on the bank resulted. The bank’* ready | money was not equal to the strain, and its securities could not be unloaded quickly enough to provide the money needed. No doubt before resorting to the final step.of closing the doors, the authorities of the Bank exhausted all means "of raising ready credit , so that the securities that remain will not he liquidated very, quickly. .It will he a matter of glow realisation, and unfortunately a good deal of the money is sunk in securities which at the moment arc suffering from a general market depression. .To realise, at such a time would mean a heavy writing down, and the position in the interests of all concerned, calls for patience. Unfortunately, too, the Labour Government is not helping the general credit situation bv is refusal to attempt to make good the financial drift of the country, default follow* upon default, with the consequence that the market value of State securities must he well down. The general confidence in the State institutions is not going to he assisted by the rushing of gold to the Old Country to take the place of trade returns. It is a desperate alternative to hear the security value of the paper currency. Already it was at discount outside of Australia, and it must decline even more now with the depletion of the gold reserve. It looks as if the Federal Labour Ministry is out for unrestrained inflation, and » that is so, the financial situation in Australia is not going to improve very readily The situation* in Australia point,- a moral to this Dominion to the effect that all effort within New Zealand should lie concentrated in maintaining the credit of the country There is certainly work for a National Government to do, devoting its talents in the direction indicated. Nor shone the duty of securing the situation >ovond reproach, be unduly delayed. Mr Forbes has stressed the urgency o the national position, and he is not a man to unduly alarm folk. Mi F<n • knows and feels what is necessary and the country having confidence in him will expect parties to unite nationally for the common good.