BANK AND GOVERNMENT

Evening Post, Volume CXXVII, Issue 140, 16 June 1939, Page 16

BANK AND GOVERNMENT

DUTIES DEFINED

CUSTOMERS' AFFAIRS

"HIGH STANDARD OF

PROPRIETY"

Brief reference to the relationship existing between the Government and ti Bank of New Zealand was made today by the chairman of the bank, Mr. A. T. Donnelly. He was concluding his review of the bank's business and of the economic conditions of the Dominion generally. He first referred to the good reception given to the Government's recent internal loan of £4,500,000 and its terms and to its; oversubscription; then he observed that "it is the duty of the Government ] to manage the affairs of the country i according to its policy. It is the duly j of the bank, as the largest trading! bank in the Dominion, to help the j Government wherever it can and as j much as it can. I PART PLAYED BY THE BANKS, j "It is admitted that this bank and | the trading banks as a unit have done | all that can be done within the limit of their resources and the existing system to maintain the public and private finances of th- Dominion. The trading banks subscribed substantially to the £4,500,000 loan recently issued, this bank's application being for £500,000. "As I have already mentioned, ntL balance-f date we held New Zealand Government securities amounting to £5,540.847. GOVERNMENT SHAREHOLDING. "As you know, the Government is a shareholder in the oank and has by law the right to appoint a majority of the directors on the board. There have been occasional discussions between your executive officers, your directors, and the Minister of Finance during the term of the present Government. Such discussions as there have been have taken place in discharge of the duty which lies on the bank to help the Government in the administration of that part of the financial system of the country which is covered by the business of the bank. Any discussions have always been in general terms and there has not, nor could there ever be, any discussion ut disclosure of the business of any customer of the bank unless express prior authority had been given to the bank by the customer. "The secrecy and the sacredness of the relation between banker and customer is protected by the tradition of centuries and the law of the land. "In all respects the present Government has \ept the high standard of propriety which has always marked the relationship between the bank and the Government of the day since 1894, and the business of the bank is now conducted as it always has been in the past. "Its capital, and your capital as shareholders, and the moneys of depositors are as safe as they have ever been in the history of the bank."