Banking and the National Credit ITN:LESS I am much mistaken
there is nothing which will have done the Socialist Party of this country more harm at the recent General Election than the attack which was made by its members upon the banks. It was fairly obvious that this attack was inspired by two equally unworthy motives. ' The (hit was Manifestly connected with the desire to supplement the attack on capital resources, through the medium of taxation, by a control of the entire credit and liquid resources of the country. The other motive savoured of a species of revenge, for the leaders of the Socialist Party professed to believe that it was the bankers who were directly responsible for the halt called last August to the growth in national expenditure, and for the severe economy campaign which finally resulted in the balanced Budget presented by Mr. Snowden last September. I have little doubt that the_ true aims of the Socialists are clearly recognized by the public, but there are certain points connected with this avowed determination on the part of Mr. Henderson's Party to nationalize our banking system which it may be well to emphasize and place on record, for the campaign against the banks by the Socialists is of old standing and will, doubtless, be renewed.
SOCIALISTS' CONCEPTION OF THE BANKER.
in the last resort the State could draw upon the taxpayer for any shortcoinings in the national balance-sheet, and well does_ the taxpayer _know the extent to which his resources have already been drawn upon to make good shorteothiogs in the Exchequer 'accounts.' This power to draw upon.the ratepayer or the taxpayer, the ease may be,. tends, however, to .a slackness. in. the conduct of municipal and natiOnar finances `which in the ease of individual enterprise is prevented by the fear of early insolvency.
A CURIOUS PLEA.
It should be noted, too, that this latest attack upon the British banks was made at the moment when our leading statesmen had told us that Britain had been brought to the verge of insolvency by many years of gross extravagance, not in banking, but in the national expenditure, culminating in two disastrous years of administration by the Socialists themselves. The heavy withdrawals of money from this country by the foreigners and the flight from the pound on the part of many British residents. were . not occasioned by distrust in the banks, but by distrust approaching acute alarm occasioned by the conduct of the national finances and the confiscatory tendencies of the extreme Socialists. How then it could be imagined that the idea of State ownership would appeal to the mass of the community whose savings rest with the banks passes comprehension. Not only would the serious prospect Of control of banking deposits and the credit system by the State be followed by an immediate curtailment of deposits held by the banks, but unquestionably the blow already given to thrift and individual enterprise by excessive taxation
IF THEY TAKE OVER THE BANKS.
AANX MESSENGER : " The printer wants to know how much money he can print to-day, sir." Tim Guv'soa " You tea him to print as much as he likes and give the boys • good time."
[By the courtesy of the "DAILY EXPRESS." would be ren- dered complete and final by a nationalization of the banks. More and not less restraint upon the Go- vernment's control of the liquid resources of the country is called for at the present time.
FUNCTION~ OF THE BANKER.
It will never be possible, however, to get sane thinking upon the func- tions of bank- ing in the coun- try until this absurd notion of regarding the banks as a kind of super- capitalist in- stead of the custodian of other people's money has been blown to the winds. For a moment's thought will show how materially this view affects the attitude towards the banker on all matters con- : nected with the general financial well-being of the country. If the many millions of deposits in joint stock banks repre- ' sented private ownership by the directors it might well be said that should the chairmen or other directors of those institutions express views in public with regard to the conduct of the national finances their views would have to be discounted by reason of their super-capitalist position. - If however, the true situation - is not only that these directors are custodians of the liquid resources of depositors, but that those deposits constitute an ever- pressing liability, then surely not only are the bankers justified in expressing their views when they consider the financial safety of the nation as being endangered, but they would be failing in their- duty alike to depositors and the nation if they failed to make their views heard. And yet such has been the effect of this persistent attempt on the part of the rabid Socialists to hold up the banker as a kind of super-capitalist that it is only with the utmost hesitation that the banker ever attempts to make known his views on the conduct of the national finances.
RECENT TRIBUTES.
Yet surely if the events of the past few months are studied quietly and apart from the storm and stress of the General Election, which is, happily, a thing of the past; there can seldom have been an occasion in our history when more powerful testimony has been offered to the bankers of this country. The conduct of the national finances and the avowed policy of the late Socialist administration caused a certain flight of foreign and even domestic capital, but there was never a moment when distrust was shown in our great banking institu- tions. It was the bankers who, more than a year ago, were constrained to send manifestoes to the Government concerning the state of the national finances, and- it was at the annual dinner of the British Bankers' Association in the spring of this year that its chairman sent, through the chief guest of the evening, a message to the Govern- ment of the day with regard to the serious position with which the country was confronted. It was without doubt the bankers who, under pressure of stern necessity, finally brought home to the Government last August the need for immediate retrenchment, and there is scarcely, a speech which, during recent weeks, has been made by politicians of such divergent political views as Mr. Mac- Donald, Mr. Baldwin and Sir John Simon, which has not included an eloquent tribute to the part which has been played by the bankers in Britain's time of crisis. I am far from suggesting that there may not be sonic directions in which improvements both in our central and joint stock banking systems might be made, for bankers them- selves are perfectly alive to that fact. No one of those improvements, however, runs in the direction of State control, . and unquestionably banks in their present unfettered form will take a great part in aiding the financial recuperation of the country, which it is hoped may be witnessed in the near future.
For the time being, therefore, at all events, we are likely to be spared any such scene as that humorously depicted by that inimitable cartoonist " Strube," whose contribu- tion to the Daily Express of the 23rd inst. is reproduced by permission. It is only fair, perhaps, to remember that the Socialists avowed their determination not to inflate, but, unfortunately, the promise was somewhat inconsistent with the elaborate programme of continued high expendi-
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