NEW BANK.

Press, Volume XLIX, Issue 14761, 3 September 1913, Page 3

NEW BANK.

AUSTRALIAN INSTITUTION. QUESTION OF NOTE ISSUE. . BANKING "FREE TRADE" WANTED. (special to "the press.") WELLINGTON, September 2. ■When, the report of the Special Committee dealing with the petition connected with tho Commercial Bank of Australia, Ltd., Bill, was tinder consideration in the House of Representatives this afternoon, a short discussion sprang up on several aspects of banking business. A special point raised was as to whether this bank should bo obliged to issue its notes from the four centres instead of from one centre — Wellington only. Mr Ell contended that this bank should be obliged to conform to the practice of the existing banks, which, he said, issued their notes from all the centres. W iih. this view the Hon. James Allen and Sir Joseph Ward did not agree. Mr Allen said that he saw nothing in the Bill which should prevent it from passing. The banks now issued notes payable at Wellington, although the practice was to pay them anywhere. There were sufficient safeguards for the payment of tho notes. MORE BANKS WANTED. Sir Joseph Ward stated that the Bill had been very carefully considered, and therq was nothing in it to which any bank or the public could object. The banks now issued their notes as payable in Wellington, and there could be no objections to the new bank being allowed to do so. He welcomed the introduction of a new bank, and ventured the opinion that there would be no harm done if two or threo more banks were started. . The Hon. J. A. Millar suggested that the only guarantee for absolute security was that the State should take over the full note issue, and, at the same time, buy up all the gold. Then there would prevail absolute security. BANKING "FREE TRADE , ." Mr Wilford stated that he had a clause ready for moving when banking legislation was forward, to provide that there- should be absolute "free trade" in banking, so long as the assets of the company were to the satisfaction of the Auditor-General. The restrictive clauses in the present Banking Act made it difficult for any commercial institution to got a footing here. The Prime Minister stated that with regard to free trade in banking, he knew of no restrictions to prevent any bank coming before Parliament, and asking for authority to go into the banking business in this country. Ho felt that tho more competition in banking there was here the better, so long as Parliament was satisfied that each bank doing business had sufficient behind it in the way of assets. OTHER POINTS. Mr Veitch argued that because of past experiences the New Zealand Go■'vernment should have much greater power of control over banking institutions. It was the duty of Parliament to safeguard the interests of the public. A point raised by Mr Wilkinson was thnt the State should see that the em-. ployees of tho bank were properly treated. One. Australian bank did not treat its employees well, ,he understood, because if they left its service the bank retained all they had paid into the superannuation fund. He believed it to be the practice of the Bank of New Zealand to return this money, but some of the Australian banks did not, and he desired that the State should step in and amend matters. Dr. Newman expressed tho hope that in the future wo should see- more banks arising hero whose interests would beprimarily centred in New Zealand, and not in other parts of the tforld. AMPLE SAFEGUARDS PROVIDED. Mr Myers, in reply to the discussion, said that under the Companies' Act, 1908, any institution could commence business in New Zealand. The charters of existing banks had been followed and referred to the Crown Law Officers, who suggested new clauses to safeguard tho interests of tho public. The committee hnd fully considered the Bill, and received evidence from the highest banking authorities of the land. He was glad to hear that the Bill had been > received favourably, although some of the remarks mado might have been deferred till tho Government's legislation upon banking had been introduced. With regard to tho note issue, he would say that the Banking Act of 1861 gave safeguards, and, co far as payment was concerned, it had been tho practice to issue from Wellington, but to pay on demand elsewhere. Upon the point of . securities, he mentioned that already the Commercial Bank had purchased a substantial building in Wellington. Finally, he had much pleasure in moving the adoption of the report of the Committee upon the petition upon tho Bill. The report that the Bill be allowed to proceed was* adopted.