BANK Of N.Z.

Evening Post, Volume LXXXVI, Issue 106, 31 October 1913, Page 3

BANK Of N.Z.

GOVERNMENT PROPOSALS INTERESTING PROSPECTS. When The Post went to press yesterday afternoon the House of Representatives was considering the Bank of New Zealand Amendment Bill, as reported from the Public Accounts Committee. Mr. Craigie had moved an amendment that the Government bet up a Royal Commission to enquire into the relationship between the State and the bank, and bring down recommendations on the subject. Mr. Craigie went on to say that a few years ago a Committee of the Legislative - Council had recommended, after enquiry, that an effective partnership should be established between the State and the shareholders, and he was of opinion that, the time had arrived for another enquiry on the subject. Until that was done the capital of the bank should not be increased, and he added that the hanks of New ' Zealand have the us© of fourteen millions of deposits, on which the banks do not pay one penny of interest. The Hon. W. H. Herries asked whether the proposed amendment was in order. Mr. Speaker said the amendment was by way of addition to the motion that the report of the Public Accounts Committee lie on the table. ' The Hon., J. .A. Millar pointed out that the member for Timaru would not by his amendment gain the end he (Mr. Craigie) desired. The Bill made provisions for twenty years, and it would be twenty years before anything could be done if the Bill was put on the Statute Book. By that time any evidence taken by a Royal Commission would be forgotten. It was clear that Mr. praigie and other members wanted something, done at once. That being so, the member for Timaru should nave added to -his amendment the words, " before the Bill was dealt with." Mr. Speaker .Tilled that the amendment was in order. Hon. D. .Buddo seconded the amendment on the ground that the question had not been -submitted to the public. He would not say that the whole of the amendment had his approval, but he certainly favoured the proposal to set up an enquiry. THE BANK AND THE STATE. Dr. Newman was in aympathy with the amendment, because he thought the present arrangements are very unsatisfactory. T.he Government owed about fourteen and a-half millions to the Savings Banks, and it was time the position was put' on a more satisfactory footing. The bank and the State ought to have a. fixed arrangement. If he had his way he would buy out the bank and make £250,000 or £300,000 a year out of it, and to that extent reduce taxation. If such an offer was made to business men in London it would be accepted. Further, there was a feeling that there was a banking monopoly, and that the profits made by the banks were enormous, and, a number of thoughtful people were asking if th*t wan right. In addition to that, all the- banks but the Bank of New • Zealand were controlled from outside,' and he thought' the time had arrived when New Zealand should finance itself in a better way. Everyone knew that the Bank of New Zealand needed more capital, ' but its • finance should be made sounder and' put on, a more up-to-date footing. SIR JOSEPH: WARD'S VTEWS. Sir. Joseph Ward contended that the Public Accounts Committee ought to have waited until the Minister of Finance was present. > He thought it was regrettable that on such in occasion they were called upon to discuss such an important amendment. ' As to' the Government's indebtedness, he pointed out that all the local loans' 'were based on frrst-clasc securities, arid everyone who knew anything about the .money owing to the Post Office knew 'that the money 'was 'invested in gilt-edged securities.' In addition, the Bank of New Zealand had about two and a-half millions of the Dominion* money in, its ' coffers, and the Dominion, ought to be able to' get what it required at reasonable notice. Such legislation as this ought not to be hurried. The bank was in a strong position, and they should carefully consider whether the proposals in the Bill were in the interests of the Dominion and of the bank iteelf. A number of shareholders had got the idea that th«y.,were not being equitably treated by the, proposals contained in the Bill.. It went to show that there had been friction, and he believed it would be better for the country to own the bank right out, . and control it by s>directorate which was apart from interference of any kind. But that could not be done in a hurry,' though he believed it could' be done with safety if it was conducted on ordinary banking lines. In form, the Bank, of New Zealand was already a State Bank. .He was prepared to help to put it into. a strong position, but there, was no necessity for anything being done in a hurry. As to the amendment, , he thought it should be withdrawn and moved again when the Bill reached itrf Committee stage. Mr. Pearce contended that the capital of the bank ought, to be increased in the interests of the small farmers. Mr. Ell resented the fact that a junior member of the , Government Party had been put up to reply to the Leader of the Opposition, who spoke with eighteen years' .experience as a Cabinet Minister — a record, s he believed, for Australasia. Mr. Pearce : I spoke as a member of the Public Accounts Committee. Mr. Ell moved to amend Mr. Craigie's addition, so as to provide that the Government should set up a committee of enquiry of the House this session. After discussion, Mr. Ell's proposal was rejected .by 45 to 18 ; Mr. Craigie's amendment to set up a Royal Commission was'lost^by 41 to 21, and the report of the .committee on the Bill was ordered to lie on the table.