Evening Post. TUESDAY, APRIL 7, 1936. A RECORD RUSH

Evening Post, Volume CXXI, Issue 83, 7 April 1936, Page 10

Evening Post. TUESDAY, APRIL 7, 1936. A RECORD RUSH

The Minister of Finance accused the Opposition last night of attempting to create uneasiness by its critil cism of the Reserve Bank Amendment Bill. He applied the adjective "vicious" freely and unwarrantably to critics of the Government's policy. But if there is uneasiness it is chiefly attributable to the Government's own methods. Without attempting to excuse the procedure, the .Government has rushed through the House of Representatives in two sitting days a Bill which authorises complete alteration of the currency and credit system, and places in the hands of the Government powers, which may be exercised without prior reference to" Parliament, exceeding those given to any previous Government except in»(jjrcumstances of the gravest emergency. And there is no emergency. The Minister of Finance is himself the most emphatic witness of that. He deprecated in strong terms anything said in criticism which would tend to create the impression that there is any cause for uneasiness. Yet this important Bill, the most important introduced in Parliament for many years, was placed before the House on Thursday, called on for second reading on Friday,' and is being forced through under urgency Standing Orders as we write. Public opinion throughout the country will only have begun to understand what the Bill means when the measure becomes law.

The haste cannot be excused by pleading an emergency. Still less is it open to justification on the ground that the Oppbsition has been obstructive and unhelpful. The Opposition did not dawdle over the Address-in-Reply debate. It cleared the way for the Government's legislation' with commendable speed. Rarely has a Government been able to introduce its legislation so quickly. But the response to this gesture of co-operation and good will has been the adoption of methods which are likely to kill the spirit of cooperation at the outset. Quite clearly the Government is bent on using its great and submissive majority in. a way that will make the proceedings of Parliament almost farcical. This is not the end of a long and time-wast-ing session. Nor is the Bill which has been forced through one,which has been fully and freely discussed. The Minister of Finance claimed last nigjht that, the Government policy embodied in the Bill had been proclaimed from every Labour platform during the election. So it was, but in- the most vague and general terms. When details were sought the inquiry was declared to be "colossal cheek" and "confounded impudence." In the little additional information ;that was given there was contradiction between the statements of leading members of the Labour Party. This uncertainty continued'after the Labour Party came into office. There was, in fact, nothing clear and definite to consider until'the Bill appeared. Then it was rushed through before the interests vitally concerned had an opportunity of submitting their views.

', At the conclusion of the second reading debate the Minister of Finance gave the House information upon a number of vital points; but lie failed completely to justify either the Government's hasty procedure or its demand for emergency powers. He submitted as a "precedent for taking vast powers the action of the British Government when Britain went off the gold standard. But that was a crisis such as Britain ■ has seldom experienced. New Zealand has no reason to fear anything remotely resembling it. Another argument submitted for taking power to suspend the Reserve Bank's obligation to give sterling exchange for its notes was that this power was needed in •the event of an emergency such as that which arose in December, 1931, when the Government had to find £4,000,000 sterling exchange at short notice. ' But, as we pointed out on Saturday, the banks immediately and freely supported the Government then, and an export credits pool was established. That experience proved " the powers, now demanded to be wholly unnecessary. Other explanations and assurances given by the .Minister were equally unsatisfactory. He said there .would be rid coercion in the Government's\ dealings with the Reserve Bank. ■'•' Then why should all the directors except the Governor and Deputy Governor remain in office at the pleasure of the Government? Sterling exchange, he said, would be made available to the trading banks arid others for legitimate purposes when the Reserve Bank held a monopoly, but it was not explained why it should then be necessary to/have power to refuse or ration credits. There would be no inflation except possibly the difference between the return obtained from the sale of produce and the amount paid to the farmers to assure them a decent standard of living. But what is the measure of this inflation? And what of the inflation that will attend the use of costless credit in New Zealand for the Government's big programme of works? The Government claims that it will create new assets to balance the credits issued, but if some of those assets prove to be liabilities what will be the result? It is not easy, when a Government, which has promised much, attempts to redeem its

promises, to assure that the expenditure is wholly sound and productive of full community value. When there was ihe check imposed by the payment of interest and the necessity of persuading investors to subscribe to loans, it was often a tussle between the Minister of Finance and the rest of the party, with the former scarcely succeeding in keeping demands within reason. With the country looking for a new heaven and a new earth from the new credit policy the task of maintaining the bounds of prudence will be harder than ever. The power of control or check exercised formerly by bankers who were not subject to political pressure and had made no promises to voters has been swept away. There is still,the opportunity to give advice; but what does that amount to? In preparing and rushing through its legislation the Government has given a demonstration of its lack of regard for advice from I the bankers or anyone else outside the Labour caucus. What reason have we to' believe that it will be more attentive in future?