GOLD TRANSFERS.

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

GOLD TRANSFERS.

FIXING THE PRICE. CASE FOR A TRIBUNAL SOME "INSIDE" HISTORY. (By Telegraph.—'Parliamentary Reporter.) WELLINGTON, this day. How the banks missed an opportunity, and have themselves to blame for worse terms under which the Reserve Bank of New' Zealand will take over gold coin and bullion reserves from the trading banks was described to a highlyinterested House yesterday afternoon by the Hon. W. Downie Stewart (Coalition Reform, Dunedin West), who was Minister of Finance when the original Reserve Bank of New Zealand Bill was drafted and introduced. He gave some "inside" history of the "gold clause." The original measure contained a provision that if there was any dispute as to the terms on which gold coin and bullion would be taken over by the Reserve Bank, the matter could be submitted to arbitration. "What was in my mind in submitting that clause," explained Mr. Stewart, "was that if Parliament had it in its mind that the profit belonged to the people, the banks might justly have a grievance and say that Parliament was both the judge and the beneficiary in this matter." The banks would not consider Parliament an impartial tribunal, so he took it upon himself in order to avoid that accusation, and without expressing an opinion on the merits of the ease, to draft a clause providing for appeal to a tribunal if 110 friendly settlement could bo effected. He anticipated a friendly settlement, but considered that the machinery should be available if it was needed.

"Themselves to Blame." Mr. Stewart said that a further motive was that his reading on central banking led him to realise that unless such an institution carried with it the support and co-operation and goodwill of the commercial banks, its task would ba extremely difficult. All the authorities agreed that, in establishing a central bank with no experience or "tradition behind it, if there were strong opposition or hostility from the com(mercial banks it would lie difficult to make it a success. So he thought it necessary to remove any possible, suggestion that the tribunal would also be the beneficiary, and he got Cabinet to agree to a. clause drawn on lines he had indicated as desirable. "There was a good deal of argument before. I got it to that stage," continued the exMinister, "and if the banks (ind that they have lost the benefit of a clause which would at least have given the appearance of an impartial tribunal, the blame is largely their own, because I made it quite clear that if the bill did not get to the House within a reasonable time° there was no prospect of getting it passed before Christmas. The bill was only introduced the day before lailiament rose." Mr. Stewart reminded members of the way in which the exchange problem then absorbed the attention of the House, so that it was impossible to deal with central bankin" "If the banks complain, he declared, "the fault is their own inutile delay which they imposed upon me.

A Clumsy Clause. Several speakers in the debate, said Mr. Stewart, had assumed that if there were a tribunal the decision must go the other way from that provided in the present clause. "Surely if their case is overwhelmingly strong—and I think the Minister of Finance has made out a good ease—they should not fear to put the facts*and arguments before a tribunal which is other than a beneficiary?" Mr. J. A. Lee (Labour, Auckland East)': Who is to f>e supreme! Parliament or the Supreme Court? Who is to rule the country? Mr. Stewart went on to say that lie realised the clause was a very clumsy one, and that it was difficult to get a suitable tribunal. His ■ own idea was that it should comprise somebody outside the area of controversy. Since he had handled the matter it was true that the present Minister had secured a good deal more information. Mr". Jordan (Labour, Manukau): From London ? Mr. Stewart: From London and elsewhere, and apparently there is a strong and authoritative body of opinion as expressed in the bill as he now presents it, and those opinions were not available when I was in charge of the bill. I think the Minister has a weighty body of evidence in support of his view, but, even assuming that the banks' arguments are entirely, unsound, they should have the right to submit to a tribunal arguments which they have not' submitted to Parliament, but which they have, placed before the Minister."