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Wednesday, 27 May 1931

Senator BARNES - The following replies have been received from the Commonwealth Bank: -

1.   The amount of gold acquired by the Common wealth Bank since December, 1929, is ?.12,650,000 by compulsory acquisition; ?4,000,000 by voluntary arrangement.

2.   The banks received for the gold - ?2,150,000 in Australian notes; ?10,500,000 was credited to the banks' accounts with the Commonwealth Bank; ?4,000,000 London exchange sold to the banks.

3.   The Commonwealth Bank is under obligation to pay over to the trading banks any amounts lying to the credit of the trading banks.

4.   The position of the Commonwealth Bank in relation to meeting its obligations as a central bank is relative to that of any other bank, i.e., that no banking institution can possibly operate on the basis that it could meet the whole of its obligations at call, simultaneously, and the Commonwealth Bank so conducts its business as to keep itself in the position that it can, at any time, meet any probable call upon its liquid resources. Should any call in excess of reasonable anticipations be made upon a central bank which had the effect of forcing the bank to issue currency in excess of its statutory power, this would necessitate special temporary power by parliamentary authority to meet such an exigency.

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