June 13.
During the next few years the fate of the banks in Great Britain will become a burning political issue, for the question of nationalization is being brought more prominently before the public. The subjugation of banks to political control has been the doctrine of a large number of people and they have come to look upon such a step hot as the last radical move of an extreme policy, but the first and Prerequisite move of a policy which in its other elements may be comparatively moderate. 'The very clamant hostility to the banks may be traced to three important causes. Labour hates them ecause it earnestly believes that it was a bankers' ramp which brought about the split in the Labour Government in 1931. The fact that the situation then created had very largely been brought about by the misgovernment of the Labour Party means little to those who hold this view, and while they do not at present form a very substantial proportion of those who hate the banks, they will undoubtedly form the spear~ head of the movement designed to effect State control of the banks when the Labour Party is again returned to power. In that they will be assisted by the rapidly growing body of public opinion which accepts as an article of faith that Great Britain's economic woes are due to some curable defect in the money system, which can be eradicated by some form of politi~ cal control, Behind these two there is the larger school of thought, neither socialistic nor in favour of social credit, which believes, with what justification it is by no means clear, that the policies of the joint-stock banks are framed with too much attention to their private interests and too little respect for the common good. This third class, it {s contended, is potentially the largest and without its consent, or at least tacit assent, the other' two parties, even in combination, will be unable to carry on any radical reorganization, To all of this the banks have a perfectly good answer, but they have not up to the present done more than carry on with their usual indifference without making sure that their case is as adequately placed before the public as is that of the people bent upon bringing them to heel. For British banking a great deal can be said. It has passed through the period of depression without the faintest shadow of public distrust in its ability to meet its obligations. It has maintained a reputation for solvency which is unique. It performs for its clients, large and small alike, a greater variety of services than any other banking system in the world and that at a low cost, no greater than ig necessary to cover expenses and Secure a modest profit. Bankers naturally ask why, in view of the above, they should be singled out as one of the earliest victims of retributive expropriation. The defence is a good one, and it may be further added that the motive underlying the demand for nationalization is not one of distrust, but of dislike, due to a feeling that they are' not pulling their weight in the rehabilitation of the country. For example the following is taken from a home paper:—"The banks have so much money which they can't use and they are 'W. Beaumont of Lloyds Bank, Ltd,, at a luncheon of the British Engineers' Assoclation in London. He said the Aifleulty of the banks was to lend money.
"The spectacle of poverty in the midst of plenty must strike the Imagination," he went on. "It does seem as if something must be wrong.
"It is not that there is not enough money in the world or in the country. A more simple and natural explanation of this unfortunate dis-equilibrium between tne productive and consumptive power the waste of war, over-borrow-ug, inventions of science, inereas-{ng production, trade and exchange Fesriflions end Government sub-
Its such statements as the above, and the admission from the speaker, a man of authority, that does seem as if something' were wrong, which gives the opponents of the banking system the opportunity to preach the gospel of contempt in a manner likely to foster their own political ends. Thus the "Daily Herald:"
Tne banks have so much money which. they can't use, and. they are only too anxious to lend."
Mr. Beaumont Pease, chairman of Lloyds Bank, said this at yester-@ay's luncheon of the British En-
To this fact the "Dally Herald" has again and again directed the attention of the Government, Millions of capital idle. Millions of workers idle.
'Why not bring the two together? Gear' the slums. Abolish. level crossings. Build new roads and bridges. "Reclaim land. Plant forests. Settle families on the land.
These and many other useful developments clamour for attention, but The Government slumbers on.
Probably one of the strongest contentions put forward in support of the nationalization of banking, is the fact that as they are performing the function of providing the greater part of the money available to the community, they should be recognized as a vital public utility and accordingly sub-Jected to at least the same measure of public control as the railways, for the electrical industry. Theoretfeally there is something to be said for such an argument, but in practice it is doubtful whether sucha doctrine could be applied with any reasonable chance of turning out a workable success. That being so the banks will Sooner or later take up the cudgels in their own defence. They will have to emerge from behind the walls of complacent secrecy behind which they have hidden so successfully for decades past, not only for the purpose of presenting their case before the public at large, but also to ensure that the larger of the three classes detailed above is not driven by ignorance to support the extremist policies of the other two, without which support they cannot hope to be successful. It would be deplorable in the extreme if the banks' case were allowed to go by default. Yet unless they depart from their present aloofness they run grave risks of being placed under a socialist control, and deprived of the wealth they have under their care, and that will be dis persed into avenues calculated perhaps to give temporary relief in times of depression but con= tributing little towards the permanent betterment of which the nations stands in so grave a ced. It is symptomatic of such conservative institutions as banks that they endeavour to maintain a wall of secrecy around their operations. The result is that when certain facts do become known to the public, the latter because of the incompleteness of its information to arrive at judgments which have no solid basis in fact. It is to be noticed that some of the British banks have realized the position and by means of monthly reviews are placing their case before the public in a readily assimilable manner. But even with this they still have a particularly difficult task ahead of them—to offset the gospel of dis~ content with nothing'more popular~ ly appealing than the statement that all is for the best in the best possible-of worlds. It should be remembered that Labour and those which think like it on this one subject, are not striving solely for the ultimate state con~ trol of beaking, but for its establishment as' a preliminary step towards the nationalization of everything to which that system Jean in their opinion be applied. And if the banks do not prepare to fight for themselves it is difficult to see who can be better fitted to do so for them.
Text read from the printed page and cleaned; old type leaves the occasional error.