BANK OF N.Z.

Auckland Star, Volume LXXVI, Issue 94, 21 April 1945, Page 6

BANK OF N.Z.

SHAREHOLDER'S VIEWS PURCHASE OPPOSED L . ! There is no need of the Dominion, t in war or in peace, that cannot be ' met and satisfied by the existing : banking services, plus the Govern- '< ment's legislative and directive ■ powers. There is no known, let alone any acute, banking problem in . New Zealand demanding attention These points are emphasised in a publication entitled Bank Notes issued by the shareholders' commit' tee of the Bank of New Zealand Bank Notes, produced in the form- of a newspaper, with illustra- , tions, cartoons and graphs, is a readable sheet of four pages, designed to set out some aspects of the case against State ownership of the Bank of New Zealand. The shareholders' committee deplores the fact chat, as a result of irresponsible political clanfour, the structure and character of the Bank of New Zealand are threatened with change. It is argued that, to make this alteration would be to harm the bank and aim a blow at the welfare of New Zealand. The Bank of NewZealand does not stand alone on this question, it is asserted, as "all banking and all moneys, wherever they are, are involved." "To the Government, Ave say 'Leave the bank alone!' To the bank customer, we counsel 'Stay as you are!' The bank is vital to New Zealand!" Such is the message given in a prominently displayed "box" on the inner page of Bank Notes. The publication throws an interesting point into relief—that it is the shareholders of the bank, rather than the bank itself, who are resisting the movement towards State ownership. Obviously the bank, as a bank cannot take up the question by reason of the fact that the Government is a big shareholder: with representatives on the directorate, Half the Dominion's Business In an article which explains the reasons for the publication of Bank Notes, it is stated that the various Governments of New Zealand have for many years , now held the dominant control of the Bank of New Zealand, handling half the business of the Dominion. Any ideas or policy that they wish to impose could have been carried out. in actual fact, because of. the character given to the bank by the private shareholders, it has been conducted along sound lines. The present Labour Government has the State-owned Reserve Bank, with full monetary powers and control over the trading banks. Some notable students of affairs have advocated more partnerships between private enterprise and the State, as an improved medium for handling the complex business and demands of the modern world. Here (states the article) we already have such a partnership, well tried and of proved nciency and great value. - On one hand, a partnership between State and. private shareholders m the Bank of New Zealand, and on the other a working partnership between State-owned Reserve Bank and independent trading banks in the wider banking sphere. This is a wholly democratic arrangement, balancing State power with the efficiency and spread responsibility ?l the privately-owned banks. Yet the Labour Cabinet has. .taken the decision to eliminate privately owned shares in the Bank of New Zealand an( 3 1 2 a^e it a wholly State-owned and State-directed bank—in other words, a State department. , This decision has been taken at the instance of an outside body, the Labour party conference, over and in spite of the many statements and assurances, to the contrary given by Mr. Nash as Minister of Finance and the Government's spokesman on the question.

To Impose Political Control ; It is argued in this article that, in view of all the resources which the present banking structure gives the Government, the deductions to be drawn from the decision are'clear and inescapable, namely, that the Government or certain backstage forces; that control the Government require the step—■ , (a) To gain control of bank moneys for purposes which are not now permissible or in accordance with good banking practice; (b) To impose political control and direction and give power and authority to influences from which the bank to-day; , (c) As a substantial advance toward the socialised State. illustrative graph, captioned Who Uses Bank Overdrafts?" shows that farmers and farm interests take £26,000,000, annually, private and- professional "persons £6,000,000, manufacturers: £5,000,000, and traders also £5,000,000, others absorbing £4,500,000. That farming interests take such a large proportion of overdrafts indicates strikingly the part played by the banks in the development of New Zealand's primary industries. "It should be very evident from this," says Bank Notes, "what a complete grip of the farmers and farm industries a Labour Government would gain, first by possession of the Bank of New Zealand and later of the other banks."

Ownership of the ordinary shares in the Bank of New Zealand is spread oyer 8598 persons, of whom 7000 live in New Zealand. The average holding of shares is 436 shares each. Women shareholders are greatly in the majority, comprising 55 per cent. There are 1274 ordinary shares held in London and 228 in Australia. Typically New Zealand in its banking practice and its character, the bank is not dominated by overseas influences through shareholders. Many shares overseas are held by New Zealanders resident abroad.