CHANGE SOUGHT

Evening Post, Volume 32, Issue 32, 6 August 1931, Page 12

CHANGE SOUGHT

BANK OF NEW ZEALAND

MR. LANGSTONE'S BILL

The Bank of New Zealand Amendment Bill, introduced in the House of Repiesentatives "by Mr. F. Langstone (Labour, Waimarino) with1 the object of- altering the constitution, of the Board of Directors by laying it down that the directors should not be' connected with other banks or financial institutions, came before the' Houso'for its second reading -y ester-1 day. The Prime Minister said that1 the Government, could not support the measure, as its adoption would mean : that the selection xof directors would 'be too strictly limited. It wpuld mean I that the bank-would be deprived of the services of' experienced business men. The Bill was ""talked out" by-the adjournment at 5.30 p.m. « ~ • • 'Motving the reading, Mr. Langstone said that his Bill aimed at conferring on the directors. appointed by the Government the sanle powers as those enjoyed by" the directors representing , the shareholders. Ho submitted that the amendment was a leasonable one, and should be acceptable to the Government.' Another amendment ho proposed was that Government , directors should not be connected with other banks, commercial, insurance, or other financial concerns. The present directors were not so much concerned about the banking business as they were about their own business. They were not bankers j they . werc^ mere jobbers. ,If Parliament did 'nothing else this^ session but pass his amending Bill, it,would justify^itself. PKOPOSA^S-TJNSOrrND.' . The Primd Minister (the' Bight Hon. G. W., Forbes) said he did not "think the House would doubt tho" enthusiasm of MX Langstone; However, his .proposals -did not appear to be sound. There was the proposal that the qualifications of Government directors should be limited.

Mr. Laiigstouc:- "Sir Otto Niemcyer has "it in hjs report." Mr. Forbes: "I would like to know what sort of persons! the honourable member'has in" his .mind. 'Farmers are1" the only class' that,! can> think-'Of." • Mr. J. A. Nash (Eeform,! Palmerston): "What about members of Parliamenij" • - " ' ,'t ,

Mr. Forbes: "Even members of Parliament may be connected commercial institutions." Ho said that it had always been' looked upon as an advantage to Have the services of men connected with business' institutions. A bank had to'dOjbusiness.-with other business institutions, and it was desirable that' they should have the services of men of experience. Mr. Langstone: "What about the State Advances Department!" Mr. Forbes: "They, are dealing with only one class of business." It was also undesirable that the policy of the bank should be dictated by the Government of/the Day, as shareholders would soon lose, confidence. To adopt the Bill would be tantamount to committing a breach' of confidence with the shareholders of the Baflk of .New Zealand. Very soon an oppqrtunity would be given of fully discussing banking system. " \ t -.-,;, '.^ ■ Mr. W. B. Barnard (Labour? Napier) said .that one of the objections -to tho banks had been that they; were run in the interests of the shareholders. There was a general feeling throughout the Dominion' that a man should not'be placed in circumstances in which his private interests might conflict , with the interests of the "public which he happened to bo directing.' It was quite possible for a man to obtain a'knowledge of business- without - holding shares himself. Ho would support any measure designed to give' Parliament more control over the financial interests of the country. ,', ■ ' At AiDbadjbni).'

Mr. M. J. Savage (Labour, Auckland West) said that the Prime Minister had mud© a strong-"case in favour of the Bill.' The banking worfd^was at a dead endj and no," one .except Governments could retrieve" the"., position. If material interests did .not affect bank 'directors, then they would be in a class by themselves. The' State Advances Department was the largest' lending institution in New Zealand. Colonel T. W. M'Donald (United, Wairarapa): "And the best." Mr. Savage: "Yes, and then wo havo the Post Office Savings Bank and the Public Trust. , They aro doing a great service to the country. So the Prime Minister's argument falls down. There was no' need for wide financial and industrial esperier.ee in order to direct a bank.' 'Banking knowledge was necessary, but this .could be got by other means. ,' ~Mr. A. Hamilton (.Reform, Wallace) complimented the Prime Minister' on the stand he had taken.

The debate was interrupted iy the tea adjournment.