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Issue #1902      February 10, 2020

“Bankers seek to control our destiny”: Merger of bank, finance capital

“They who control the credit of a nation direct the policy of Governments and hold in the hollow of their hands the destiny of the people.”

The man who wrote that knew what he was talking about. His name was McKenna, a former British Chancellor of the Exchequer and Chairman of Directors of the Midland Bank. “THE CONTROL OF CREDIT”— that is what the private bank syndicate is seeking at the present time through the Menzies Government’s Bank Bill.

Under existing law, the commanding control of credit is with the Commonwealth Bank.

At a moment’s notice it can call up twenty-five percent of private bank deposits in the event of economic emergency.

But if the bank bill goes through, the Commonwealth Bank will have to give ninety days’ notice.

A government could be broken or forced to its knees in ninety days, if there was an economic crisis and the banks refused to advance credit.

Menzies and the private bankers know this: They have had experience in blackmailing governments.

Remember 1930 and the Great Depression. The only way for the government to ease the burden on the people was to borrow from the Commonwealth Bank.

But [Prime Minister] Bruce and Page had foreseen this.

They had changed the constitution of the Commonwealth Bank, putting it in the hands of representatives of the monopolies.

The Commonwealth and private banks ganged up on the Scullin Government.

Premier’s Plan

Sir Robert Gibson was their spokesman, and his words were very plain. He said:

“Subject to adequate and equitable reductions in all wages, salaries and allowances, pensions, social benefits of all kinds, interest, and other factors which affect the cost of living, the commonwealth bank will actively co-operate with the trading banks and the government of Australia in sustaining industry and restoring employment.”

Scullin caved in, and the result was the Premiers’ Plan, just as the banks dictated.

Can anyone ever measure the cost of that bank dictatorship in human life and human suffering?

Some people think that the banks are merely agencies for the distribution of money.

Others think they are an all-powerful oligarchy, dictating to industry as well as to governments and the people.

The truth lies in neither of these directions in our country, as advanced capitalist countries, the same men control the banks and the industrial monopolies.

Industry and banking are combined in one great oligarchy known finance capital.

Squeeze Small Man

Industry feeds the banks with business.

On the other hand, the banks buttress the monopolies with credit and help destroy their competitors.

Together they squeeze the worker, the small businessman and the farmer.

A glance at the lists of directors of the private banks shows their indissoluble connections with the other monopolies.

Of the fifty-one banks which were in operation in 1867, only seven remain today.

Two — the E S & A and the Australia and New Zealand Bank are owned and controlled in England by large financial and industrial interests.

The directorate of the E S & A for example, reads like a page from Debretts: Hon. David F Brand, Lord Aldenham, Lord Baillieu, Lord Huntingfield, Sir George Schuster, A D Marris, Sir Keith Officer, Sir George Binney.

The directors of Bank of New South Wales, Australia’s wealthiest bank, are also directors of the following industrial interests:

Sir Leslie Morshead: Amalgamated Wireless, Mutual Life Insur., Sydney Exchange Co., Trustees, Executors and Agency Co. Ltd.

John Cadwallader: Allied Mills Ltd., Aust. National Industries, Queensland Insurance, Trustees, Executors and Agency.

R C Wilson: Allied Mills, Aust. Guarantee Corp., Tooheys, Transport and General Insce.

D B Lewington: British Tobacco, Courtaulds, Farmed Holdings, Tooth and Co.

S G Rowe: Anthony Horderns, Aust. Mutual Provident Society, Aust. Stock Breeders Co., Goldsborough Mort, Hastings Deering, Queensland Trading and Holding, Royal Exchange Assurance.

J H Fairfax: Aust. Mutual Provident Society, John Fairfax Ltd., Sydney Exchange Co.

J W Dunlop: Colonial Sugar Refining Co., Edward –Dunlop & Co., United Insurance.

Entwined

But this is only one way in which the banks and industry are entwined.

The banks also own shares in big industrial firms, and vice-versa. The Australia and New Zealand Bank, for example, owns over twenty-four million shares in fourty major Australian companies, including BHP.(metals), A C I. (glass), Ampol and H C Sleigh (oil), Coles and Myers (retail), Dunlop Rubber, Goldsbrough Mort (pastoral), Drug Houses of Australia, British Tobacco Company, Bradford Cotton Mills, Huddart Parker (shipping), I C I. (chemicals), Taubmans (paints) and Tooths (beer).

The Bank of New South Wales owns over 600,000 shares in some of the same companies.

Banking pays dividends as the following figures of declared net profits show:

Bank of NSW: £1,830,240 (1957). ($3,660,480.00)*

National Bank: £926,807 (1957). ($1,853,614.00)

E S & A: £347,210 (1957). ($694,420.00)

The figures do not tell the whole story.

They omit the incalculable profit salted away by devices such as depreciation allowances, bonus share issues, and revalued assets.

One indication of the truth, however, is the growth in their combined assets from £377 million ($754,000,000.00) in 1939 to £1,357,102,000 ($1,999,999,998.00) † in 1955.

H P racket

A recent innovation by which the banks have intensified their robbery of the people Its their entry into the hire purchase field.

If you can’t get a loan from the banks — why, then you just step along to their H P subsidiary, and there you will be accommodated at an interest rate equivalent to four or five times the bank rate.

If the E S & A, regrets try Esanda Ltd. (1956 profit, £206,147) ($412,294.00)

Or if the Bank of Adelaide can’t accommodate you, visit Finance Corporation of Australia Ltd. in which they have a forty percent interest.

Liberal Governments, representing the interests of Big Business, have always done their best to boost the wealth and power of the banks at the expense of the people.

The present Bank Bills of the Menzies Government are openly admitted to have been drafted by the Private Banks.

Nationalise banks

There is only one way to smash the power of the banks – NATIONALISE THEM.

The Chifley Government tried to do this in 1947, and because it was too timid in mobilising the people, the banks and their press defeated the move by a hysterical campaign.

At that time, many employees of the private banks were misled into canvassing for their masters.

But today, they are much less likely to do so. They have their own troubles with the bankers.

At present, they have applied for increased salaries, a five-day working week and penalty rates for Saturday work. The banks have rejected these reasonable demands out of hand.

By supporting the claims of bank officers, the labour Movement can win them to a realisation that their interests too would be best served by the policy of the working class.

* These figures are adjusted for AUD in 2019 via the RBA

† This figure is the closest approximation via the RBA

This article originally appeared in the Tribune, February 1958.

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