FUNCTIONS OF THE BANKER.

Otago Witness, Issue 4031, 16 June 1931, Page 65

FUNCTIONS OF THE BANKER.

Some striking comments, evidently in tended as answers to criticisms voiced against the banks, were made recently at the annual meeting of the National Bank of Australasia, Ltd., by the chairman iSir John Grice) (says the Melbourne Age). Alost of the money the bank lent, he said, was the property of its despositors, wh - looked to the bank to safeguard then in terests by not lending unwisely or excessively. The main function of banks was to manage or control credit and not to create it. Were they at the present time recklessly to increase their lendings they would be in a position similai to that of the shipmaster who, in a stormclapped on sail instead of shortening it and by paying more attention to progress than to safety imperilled the welfare of all on board his ship. It was shown that the bank’s average loan by way of over draft was £373, primary producers numbering 42.7 per cent ; of the borrowers and people engaged in secondary industries only 3.4 per cent. The chairman pointed out that the risks attached to lending have increased greatly in the past 12 months owing to falls in values. in profit and in earning poxver. Land and income taxes, at £193.600. were £71.900 higher representing nearly 4 per cent of the bank’s paid-up capital. A special committee, consisting mainly of undertreasurers. had reported that there was a marked decline in vields of taxes despite increased rates, and new imposts. If Governments did the right thing con fidence would revive.-nnd there would be more money, easier rates and better trade In concluding. Sir John Grice said the directors would be very loath to see any diminution of the 25 per cent, gold reserve against the note issue, w-hich walow when compared with the customs of other countries. He declared that Gov ernment action, apart from costs and prices, of products, dominated Australia « financial position, and he expressed the hope that tbe meetings of Premiers now being held in ATelboiirne would result in xvise and effective narlinmcntary action.