RESERVE BANK

Dominion, Volume 29, Issue 150, 20 March 1936, Page 12

RESERVE BANK

Amending- Legislation Soon “NO MYSTERY ABOUT IT” To Become a State Institution Cabinet held an important meeting yesterday afternoon, sitting for close on five hours. Although the financial proposals are still being kept a closelyguarded secret, it was gathered that they formed, the basis for the greater part of Cabinet’s discussions. Absolute finality has not yet been reached, ou*. the programme of financial legislation is well advanced. One of the first bills to be introduced by the Government after the completion of the Address-in-Reply debate will be the Reserve Bank Amendmsnt Bill. The Minister of Finance, Hou W. Nash, stated last evening that it would be a comparatively simple measure. A considerable degree of mystery had been attributed to it, but actually it would merely give effect to the Labour Barty’s ejection pledge that the bank would be taken over entirely by the State.

In this connection it is interesting to recall a statement made by the Prime Minister, Hon. M. J. Savage, just after the election. Ou that occasion he affirmed the desire of the Labour Party tp make the Reserve Bank exclusively a State institution, and added that when the Government acquired rhe holdings of private shareholders it would probably pay for the shares a." the rate ruling at the date of the election.

However, the Reserve Bank Amendment Bill is not to be confused with the main Finance Bill, which is the subject of Dominion-wide interest. The suggestion lias been put forward in some quarters that the Government is considering the sale of tlie Reserve Bank's remaining stock of gold as part of its financial proposals, but it is learned on good authority that, so far, this point has not even come up for discussion. Many experts hold that the price of gold cannot) remain at its present high figure indefinitely, and this may be an argument in favour of sales such as those carried out when the Rt. Hon. J. G. Coates was in charge of the Dominion’s finances under the National Government. Nevertheless, if the remaining gold is bo be sold it can be taken as fairly definite that such a step will be only incidental to the new Government’s general financial policy.