NEW BANK'S MOTTO.

Auckland Star, Volume LXIV, Issue 252, 25 October 1933, Page 9

NEW BANK'S MOTTO.

WELFARE OF STATE. CONFIDENCE ESSENTIAL. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, this day. The motto of the, Reserve Bank of New Zealand is to be found in the bill authorising its establishment, in which it is stated that "the economic welfare of New Zealand is to be promoted and maintained." Placing this statement on record in the House yesterday, Mr. Coates dealt with the position of the new bank and the existing institutions. The question had been asked, said Mr. Coates, as to why the Bank of New Zealand could not act as a reserve bank. If that were done, there would, of course, be immediate jealousy on the part of the other trading banks. It would also be more costly. The Reserve Bank would be there to give effect to the monetary policy of the Government for the time being. Gradually it would take over foreign transactions on behalf of the trading banks, and it had been said that as soon as the Reserve Bank got the confidence of the trading banks practically the whole of the overseas business would be handled by it. Mr. W. J. Poison (Coalition, Stratford): Would they not show that confidence if it-were a State bank? Mr. J. A. Lee (Labour, Grey Lynn): They would if the law provided for it. The Minister: That's just the point. We know that in New Zealand to-day the good old "Shell-backs" —and thank goodness there are only a few of them— who believe that the Government did the wrong thing in raising the exchange, have brought about a controversy which has resulted in importers not buying surplus exchange, because they expect the rate to come down again. That brings me to this: It is very important that we should have the whole of the people of New Zealand behind this bilL