BANKING CREDIT [To the Editor of the SPECTATOR.] SIR,—In your
issue of December 27th Mr. A. G. Sayers rails against the banks (the big five) in their control of credit as being" simplytyrannical " and" inimical to the public interest," and' he instances the rebuilding of Regent Street instead of financing the building of houses for young people who want to marry and settle down as an example of what he means. Everyone sympathizes with the housing shortage and is at his
wit's end to know how to remedy it at the present time, but the causes are many and various, and largely economic. Banks, however, are not philanthropic institutions, and are managed principally for the benefit of their shareholders. They owe a duty to the public and to the traders in particular, and .provided the security is a sound one, arc, I imagine, ready and willing to lend when applied to. But to finance house-building must obviously be judged on its merits and with regard to security.
What would give confidence and lea4 to an increase in lending, and an expansion of credit, would be the resumption of specie payments and the restoration of a free market in gold. I understand that Mr. Darling is of opinion that if this was done it would mean that we would be controlled from the United States of America. This is quite beyond one. In the first place, I do not believe it, and secondly, I am convinced that if it was possible America does not desire it. As Sumner, a great economist, points out, control is present. where there is convertibility as in America to-day by the trade or specula- tion is the best sense controlling the currency, and where there is inconvertibility as in this country then the currency controls the trading. What we want is a free market in gold and a sound currency, and what Mr. Darling fails to perceive is that our national engagements, debts, &c., are not incompatible with a sound system. On the contrary a sound system and currency will help us to carry these burdens.—I am, Sir, &c., D. M. MASON. Reform Club, Pall Mall, S.11' .1.
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