RESERVE BANK BILL

Evening Post, Issue 82, 6 April 1936, Page 11

RESERVE BANK BILL

URGENCY TAKEN

OPPOSITION PROTEST

LONG SITTING LIKELY

Urgency was taken on the Reserve Bank of New Zealand Amendment Bill in the House of Representatives today, and a late sitting appears to be in prospect. It is not certain, however, that the Bill will be passed before the House rises. Much will depend on the progress made up till 3 o'clock tomorrow morning. If the Opposition still shows a desire to discuss the Bill at length an adjournment may be taken until tomorrow. It is the hope of the Government, however, to have the Bill ready for discussion by the Legislative Council tomorrow. "FOLLOWING GOOD EXAMPLE." Urgency was accorded the passing of the Reserve Bank of New Zealand Amendment Bill in the House of Representatives this afternoon. Replying to the Leader of the Opposition (the Rt. Hon. G. W. Forbes), the Prime Minister said it was proposed to put the Bill through ail stages. The Government would follow the good example shown by its predecessors.

The Leader of the Opposition protested that there was undue haste in putting through this Bill. No Bill oi this importance, taking over as it did, the entire control of the monetary system of the country, had ever been put through with the same hurry as it was proposed to do in this instance. The House, he always - understood, was the place in which matters of this kind were thoroughly thrashed out. The Bank was brought into operation as the, result of a report submitted by one cjr the outstanding experts of the Old Country, Sir Otto Niemeyer. (Government laughter.) Sir Otto had said that a Reserve Bank should be free from both the actual fact and fear of political influence.

Mr. Forbes said that the country would have to meet the expense involved in the change and it was to be hoped that the price would not be too great. Although the bankers were still to administer the system, they would be under the complete control of the Government so far as policy was concerned; that really meant that members of the Government were, putting themselves in the place of super-men. The bankers would be mere automatons and would get the sack if they did not do as they were told. The monetary machine could not be handled lightly and any mistake made was likely to be costly. The House was being asked to leave the well-defined track and adopt something entirely new. Germany's experience of inflation was a sorry one and yet no doubt Germany started as confidently as the Minister of Finance was starting. The utmost caution should be exercised in embarking on a financial experiment. The Government was setting out on a policy of uncontrolled expenditure and one wondered what the outcome would be. The people of New Zealand had not been taken into the confidence of the Government and had not been told the details of what was to be done. •■ The Government's plan looked most attractive, but he had always found that if anything appeared attractive it was necessary to look closer than ever for the nigger in the woodpile. The Prime Minister had looked at the matter from one angle, and had been more interested in politics than in banking economics. Referring to Mr. Nash's statement about evil-minded persons who., spread rumours about money leaving the country, Mr. Forbes said that the\.members of the present Government., when in Opposition talked about- the confidence of the country being affected, but nobody had ever called them evil-minded. Mr. Forbes said that except that it had been stated that the Government would borrow from the Reserve Bank there was no indication as to the Government's actions.

"SLIPPERY SLOPE OF INFLATION."

So far as they knew at present, said Mr. Forbes, the sky was the only limit. The Prime Minister said his motto was "Onward and Upward," but he would remind Mr. Savage that the slippery slope of inflation went downhill. The country shoujd know what the limit was. The Labour Party should remember that only 45 per cent, of the people supported its policy.

(Proceeding.)