CENTRAL BANK.

Auckland Star, Volume LXIII, Issue 237, 6 October 1932, Page 8

CENTRAL BANK.

PUBLIC CONTROL ADVOCATED. CURRENCY LEAGUE ADDRESS. "The legitimate objective of a pri-vately-owned Central Bank is the earning f dividends for shareholders, and the regulation of .the monetary system is merely an incident of its operations," said Mr. H. W. U. Haddow in an address on the Niemeyer Report at a meeting of the Currency Reform League last night.

"The monetary system is a public utility, and the controlling authority should be concerned solely with regulating .credit and currency to secure that the maxim-urn, number of citizens are usefully and profitably engaged in the production of wealth and the satisfying of liuman wants."

Mr. Had<low advocated a publiclycontrolled Central Bank, responsible to but not the tool of Parliament. Hβ contended that the uncertain future of sterling made it undesirable to tie the monetary system too rigidly to sterling by adopting the Nicmeyer proposal that the Central Bank should be obliged to exchange its notes for sterling at par of exchange or within U per cent of par. He explained that at the time Sir Otto wrote his report the adoption of his proposal would have meant a 1 per cent deflation of the price level, whereas today it would necessitate a 9 per cent deflation.

In the diseussioH that followed Mr. W. A. Gray suggested that if the Central Bank was to be a private institution the number of votes allowed to any one shareholder should bo limited to 100 to ensure that voting power was not concentrated in a few hands.