But the banks are probably now realizing that not all the concessions to their fears were bought on the cheap.

Paradoxically, the reforms come at a time when the importance of banking as it is practiced by banks is decreasing sharply.

Only the Commonwealth Trading Bank has shown anything resembling a drastic expansion of its up-front business in recent years.

Since 1954-55, advances from private banks have increased by just over 4 percent, while advances from the Commonwealth Trading Bank have increased by 38 percent.

Over the past three years, there has been virtually no change in advances from private commercial banks.

At the same time, there has been the expansion of other forms of financing, notably hire-purchase, which has constantly tended to reduce the government’s leverage on the money supply.

The head office of the Reserve Bank of Australia under construction at Martin Place in June 1962.

This already waning power of official monetary control may deteriorate to such an extent that, in a future emergency, the problem will simply have to be resolved.

Already, the Constitutional Review Committee has recommended broader Commonwealth powers over hire-purchase and capital matters.

The natural response of financiers to such suggestions is, of course, that the Commonwealth largely provoked these problems on its own head through overly conservative interest rate policies.

While there is a good deal of truth to this claim, it is of little use now that the damage has been done.

The lack of federal control over hire-purchase, for example, prevents the government from using a weapon that has proved extremely useful to the British Conservative government in recent years.

It may well be that in the absence of such moves in the years to come, the erection of Dr. Coombs’ new building to house the Reserve Bank may be proof of that part of the Parkinson’s law which states that institutions only move to permanent, properly designed buildings when they are in a state of nascent decline.


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