BANK OF NEW ZEALAND.

Dominion, Volume 3, Issue 861, 6 July 1910, Page 4

BANK OF NEW ZEALAND.

STATEMENT BY THE PRIME MINISTER. ■ 'Die affairs of the' Bank of New Zealand were discussed at some length in the House of Representatives . yesterday afternoon. Mr! T. E. Taylor (Christchurch North) asked why tho Government should not convert the State's interest in the Bank of New Zealand into a share interest, and make it, what it virtually was, a national bank of New Zealand. The bank authorities should be allowed to remain in with tho State as junior partners; he could not see why they should be allowed to remain in as senior partners.. Ho considered that it was a disaster" to New Zealand that the resolution of the member for Avon in 1894 to convert tho Bank of Now Zealand into a national bank was not adopted. Tho State had the power of converting its full interest in. tho bank into a share interest.

Mr. H. G. Ell (Christchurch South) strongly endorsed the arguments of Mr. Taylor. Mr. A. W. Hogg (Masterton) regretted that the bank had not. been nationalised when the State came to its aid years ago. Mr. Russell (Avon) said ho did not think it was a secret that for years past the. directors representing the shareholders on tho Bank of Now Zealand Board of Directors had been steadily building up the reserves to roach one million, and when that amount was reached they would say to the Government: "Hero is your money. Now walk out and leave us to enjoy this magnificent property." If the opportunity was given, he would vote that the one million of 4 per cent, stock belonging to tho people' of New Zealand that now remained with the bank'should bo treated as ordinary share money belonging to the people of the Dominion. The Prime Minister said that one million of stock held by the country was converted into sharo capital. . It must not bo forgotten that even although legislation to this effect were passed tho Government could not control the depositors nor tho shareholders in the bank, lor they could next . day -declare themselves entirely, freo from this country and ask for the necessary charter to enable them to. carry on. their own business. The theory put forth at different times that the bimk could by Act of Parliament be compelled to do certain things was erroneous, and could not bo put into force. It was true that the'country could decide-to have an independent bank—a State bank in the true sense of the term. That could be do-no to-morrow if the country and' Parliament were favourable.', It had to be remembered that the Government should never attempt through the directors to bring any pressure to bear, on behalf of anyone. When the Govcwrment took an interest in. the bank to the extent of -half ■ a that interest was taken advisedly. If the amendment which Mr. Russoll had proposed had been adopted, it would have meant that the rescue of the bank would have been of a temporary character. If the shareholders would have been willing to sell, arid if the country had been, willing to accept tho responsibility, it might with very great advantage have bought them out, but at tlie time a great many people were -as timid as hares over the matter. It was tlie easiest thing in the world to say what the country might have done; it was .a different thing for one to have, attempted to put them into force at the time of a crisis. There would bo svnot-hor opportunity during the session to .discuss the matter.