PRICE OF GOLD.

Auckland Star, Volume LXIV, Issue 259, 3 November 1933, Page 9

PRICE OF GOLD.

PLEA ' FOB TRIBUNAL. The "gold clause," or the provision empowering the bank to take over the gold reserves of the trading banks at book value (£3 17/10J per ounce eleven-, twelfths fine) gave rise to considerable discussion.

Mr. R. A. Wright (Coalition Reform, Wellington. Suburbs) set the ball rolling by moving that the clause in the original bill providing for any dispute regarding the price of the gold taken over be reinserted. He said he was seeking to provide some, fair method of settlement between the trading banks and the reserve bank. He was prepared to defend the' trading banks on this issue, on the same grounds as he would defend anyone else he thought was being treated unjustly. Because the banks were wealthy concerns was no reason why they should be treated unjustly. Since 1915, the Bank of New South Wales had imported gold to the value of £387,000. Surely that belonged to the bank. "I can't stand for it, I won't stand for it, and I will do everything I can, popular or unpopular, to Stop it," he added. "Preventing Highway Robbery." Likening the greater part of Mr. Wright's speech to an apology for the amendment, the Leader of the Opposition said the clause providing for the taking over of the gold was one of the few clauses in the bill for which he could find justification. The gold reserve had been protected by law for years and the business of the banks had been protected by the credit of the people. Now the House was asked to believe that the clause was something in the nature of ' highway robbery, but lie believed it was a clause to prevent highway robbery. If the banks had not been protected by the legislation of 1914 and 1916, they could not have held the gold reserves. He knew that big influences were at work to secure an amendment of tho present proposal, but no matter how big or how little the Government liad got to stop them. There was an ample case against the amendment, as in the first place the gold would not have been accumulated unless the position of the' banks had been made safe by law arising out of war conditions. The banks had no moral or legal claim.

Judge's Investments. Mr. A. E. Ansell (Coalition Reform, Chalmers) said he was surprised at Mr. Wright's bringing the matter up. Mr. Wright had endeavoured to make out a case for setting up an impartial tribunal, but he would like to ask if the Chief Justice, for example, was a shareholder in the Bank o" New Zealand. Mr. A. J. Stalhvorthy (Independent, Eden): You are making a very serious statement. Mr. Ansell replied that Mr. Wright's implicat ; ~n was that because of hostility to the banks, Parliament was not fitted to deal with the case. The Government was both morally and legally correct.

The Hon. W. Downie Stewart (Coalition Reform, Dunedin West), in a passing reference to Mr. Ansell's remarks, said tliat when it was asked if a judge "was a shareholder in a, bank, it should be known that under those circumstances a judge always refused to act or take any part in the proceedings. Impartial Judgment.

Announcing his inability to accept Mr. Wright's amendment, Mr. Coates said the proposal in the bill represented the considered opinion of the _ Government. "There are some," he said, "who believe we have dealt unfairly with the institutions which hold the gold. I am prepared to keep the matter open. If the banks can show they have a_ case — that Parliament has not dealt fairly respecting the gold, between now and the time the Reserve Bank comes into effect —the matter can come before Parliament again. I have not so far been convinced by the representations made, but I recognise the Government must be impartial in its judgment. However, to date I have not seen anything which would justify an alteration in our decision." The whole question was reviewed by the Coalition caucus during the tea adjournment, when a strong body of opinion favoured the retention of Mr. Coates' proposal to take over the reserves at book value. Accordingly the division in the House at 7.45 p.m. saw the defeat of Mr. Wright's amendment by 56 votes to 5, its only supporters being Messrs. Downie Stewart, Wright, Hargest, Atmore and Wilkinson.