HOUSE OF REPRESENTATIVES

Evening Post, Volume CXVI, Issue 95, 19 October 1933, Page 15

HOUSE OF REPRESENTATIVES

The House of Bcpresentatives met at 2.30 p.m. today. Introducing the Bank of New Zealand Amendment Bill, Mr. F. Langstone (Lab., Waimarino) said if the Government took up the Bill there would be no need for a^ Central Bank. The tieup of money in New Zealand today was definitely due to the policy of the Bank of New Zealand, which controlled half the banking business of the Dominion. There was a controversy going on today about the gold reserves. He submitted that the <banks had secured all the gold they had "in their boxes" without paying one penny piece for it. Mr. Langstone- claimed that the ba.nks really did Dot pay a note tax; there was merely a diversion of the note issue. The Bank of New Zealand was banking in 1894, and today its assets^ wero worth, more than £52,000,000. Mr. Langstone said it was wrong in principle that directors of the Bank of New Zealand should be associated in big commercial concerns. He said he would like very much to know who bought the exchanges when the exchange rate went up. The bankers were the only people who were "in the know," as they had been in negotiation withjjthe Government. The main provision of his Bill was that the directors appointed to the board of the/Bank of New Zealand should not be connected with any other banking institution, commercial concern, or joint stock companies. • Mr. E. A. Wright (Government, Wellington Suburbs) said Mr. Langstone attacked the Bank of New Zealand ,on every available opportunity.- He was convinced, however, that Mr. Langstone was in error. Mr. Wright said he held no. brief for the directors of the bank', but he presumed they were ordinary business men. Why should' they be charged with, being "mere money-grub-bers"? Jf the bank could issue- credit, why did. it have to ask for Government, assistance ia-'iiJ'?4't. /The bank could not issue credit because it dare not do so. Labour members: It did not have authority. ~ Mr. Wright denied that the Bank of New Zealand was bankrupt in 1894, and said its trouble was a lack of liquid assets. So far as the directors were concerned he thought they should be the best possible men available, and he believed that the present directors filled the bill. He was surprised that Mr. Langstone had not gone in for a State Bank. He thought it would be preferable for the Government to take over the Bank of New Zealand than to establish a Central; Bank. .' (Proceeding.)