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Hokitika Guardian, 8 May 1931, Page 4

As a fiatufal .coiifiecjudnce of tliij disastrous shocks inflicted recently by Mr Lang upon the stability of the financial system in New ffoutli Widen, a serious “run” was started at the close of the week on the Savings Bonk department of the Commonwealth Bank. Of course, comments the Auckland Star, the depositors who were anxious about the safety of their money had no difficulty in getting it out, but if this state of apprehension and anxiety is prolonged or intensified, it will he necessary to retard the process ol withdrawal. No bank ever keeps in its possession the whole of the money deposited with it, for the obvious reason that, if it did, it would never he able to invest a surplus and make dividends for the shareholders. The facts of the situation, have been clearly explained bv Sir Robert Gibson, who, as Chairman of the Commonwealth Hank, has assured th e general public that the Bank is perfectly sound and their money is absolutely safe. 'the trouble lias apparently been caused by •v number of nervous people, who, being scared by Air .Lang’s threats of repudiation and confiscation, removed their money from the State Savings Bank to the Commonwealth Bank a few days ago, and arc now looking round for some safer place to put it in Sir Robert Gibson has told these people emphatically t,hat they had better withdraw their funds, as the Bank does not- want customers of this kind. Of course, if all the people who nut money in any bank should ask for all their money at once, no bank would be safe for an hour. The Common wealth Bank will certainly be supported by the Federal Government to the best of its ability, and Sir Robert Gibson lias already announced that the Bank will have at its disposal “any extension of the note issue deemed desirable in any emergency.” Tins statement does not indicate permanent inflation, but such a temporary enlargement of the note issue as was permitted to the Bank of England three times during the nineteenth century by the temporary “suspension of the Bank Charter Act.” As n measure of alleviation and relief, it was entirely successful at Home, and no doubt it would bo equally efficacious in Australia. But if Mr Lang persists with his fantastic tricks in high finance —as. for example, the demand for cash guarantees from the insurance companies—there is no knowing where the panic that- he lias started in Rydney may end.