BANKING SYSTEM

Evening Post, Volume CX, Issue 51, 28 August 1930, Page 13

BANKING SYSTEM

IS OVERHAUL DUE?

DEBATE IN HOUSE

MR. liANGSTONE'S BILL

i Every session the Labour -member for Waimarino (Mr. P. Langsrtonc) endeavours to amend the ■ Bank _ or. New Zealand.- Act in .-the-, direction, of giving the Government, greater representation on the board of ■ directors of the bank, but his proposal is always defeated. Mr. ' Langstone is making progress, nowOver, and when his Bill was taken ia Committee in the House of Representatives last night he had the gratification of seeing the majority against the measure reduced to twelve. 'The short title was clofeated by 38 votes to 26.

The Hon. W. Downie Stewart (Beform, Dunedin West) said that., Mr: Langstone should be satisfied with having got the Bill through the second reading, and he'did not think the author himself ever expected to get it to the committal stage. Mr. Stewart said he would like to know the attitude of the Government towards the Bill. It was obviously a far-reaching measure, which would interfere very seriously With the arrangements in connection with the bank which Parliament had sanctioned from tinio to lime. He did not think it could be reasonably hoped that the House would ever consider the proposals. One proposal was that the directors of the bank should not be directors in any other company, or hold shares in any other concern. He did not think the Hoiiße would acquiesce in such a restriction. The Bill would upsofc the whole business of -the bank without an opportunity being given to the parties affected to be heard. Mr. Langstone submitted that members would not stand for the. head' oj the State Advances Department, the Treasury, the Public Trust Office, and other similar' Departments being connected with other concerns. ■•"■•;■ Mr. H,'G. Dickie (Beform, Patea): "They are shareholders in other concerns." .

"They may bo shareholders but they are not directors," Mr. Langslono replied, i

GOVERNMENT'S POSITION.

The Minister of Finance (tin Hon. E. A. Eansom) intimated that the Government waa not able to support the measure. It was admitted that it was desirable for the directors of the Bank , of New Zealand to be so far -as possible ' . iuntiaittmelled in regard to their attiS tnde as directors. At the same time, in tho interests of banking generally as well aa of the country, it was desirable that men occupying such a rcspon- ■ Bible position should be persons of known and tried commercial experi- .. ©nee. It would be unwise to have men on the directorate of the bank who had not had ripe experience. He did not think it could^be shown that men who had been chosen in the past to sit on the directorate had abused their positions. ■ The directors- of the' Bank of England wore recruited from the lead- • ers of the commercial world. Sections • H and 4 were designed to give tho Government of the Day direct voting power at shareholders' meetings. That would tend to introduce politics into tho man-

agement of-the bank. Tho interests r of the State were amply safeguarded by the appointment of four out of the . six directors.1 Section sof tho Bill proposed to increase the State share of . the first £306,250 of tho profils, after .payment, of, dividends on A, C, and D ~ shares, from- ono-seveuth to onu-tlrird. . That would be inequitable. ■ .

■ PEOPLE'S INTERESTS. ' Mi. W. Nash (Labour, Hutt) suggested that the State would get more benefit from the bank if it appointed State officers such as the Secretary of the Treasury, the Public Trustee, the head of the Post Office Savings Bank, and the Superintendent of the State Advances Department. These men would safeguard the interests of the people and also gain valuable experience. The legislation of 1921 gave greater advantages to the shareholders. The Government should exercise to the maximum the control it was entitled to. '■■'■•• ■ ■■..., " '■■■ ■'■- .' ■' ■. ■ ■

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