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Tuesday, 15 March 1932

Mr LYONS - On the 25th February, the honorable member for Melbourne Ports (Mr. Holloway) asked the following questions, upon notice: -

1.   Was the £50,000,000 of credit made available to the New South Wales Government Savings Bank provided by the Commonwealth Bank?

2.   What was the security upon which the Commonwealth released that amount of credit?

3.   Is it a fact that, during the period when the Government Savings Bank of New South Wales was closed, financial gamblers made profits amounting to several hundreds of thousands of pounds by taking advantage of the fear and ignorance of the people to buy up their deposits at about half their real value, thus imposing a similar loss upon the legitimate depositors ?

4.   Because of this gambling in the peoples' deposits, did the hank authorities find it necessary to notify the public that transferred accounts would not be recognized?

5.   In view of the very serious and farreaching importance of the closing and reopening of the Government Savings Bank of New South Wales, will the Treasurer give the House a brief history of how the collapse and restoration of that institution were brought about?

The following replies have been furnished by the Commonwealth Bank: - 1 and 2. £50,000,000 credit was not made available to the Government Savings Bank, but upon the absorption of that institution by the Commonwealth Savings Bank liabilities exceeding £59,000,000 were taken over by the Commonwealth Savings Bank in consideration of the transfer to it of assets extended at a similar amount.

3.   It seems that a number of depositors, actuated either by fear or necessity, sold their deposits - in some cases at a considerable discount. There is no means of ascertaining even approximately the amount lost by depositors in this way. This took place before the Commonwealth Savings Bank took over the State institution.

4.   The Commonwealth Savings Bank had no option but to recognize the transfers which hud been registered by the State institution.

5.   The comprehensive statement made by Sir Robert Gibson, chairman of the board of the Commonwealth Bank, which appeared in the press of 31st July, 1931, fully covers the history of the collapse of the Government Savings Bank of New South Wales and negotiations with the Commonwealth Bank up to that date. Negotiations were subsequently renewed with the Commonwealth Bank and brought to a successful issue.

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