“LEAVE WELL ALONE”

Evening Star, Issue 20253, 14 August 1929, Page 3

“LEAVE WELL ALONE”

PREMIER AND STATE BANK EXISTING INSTITUTION SATISFACTORY [Fr.OU Ouii I'AKUAMENTAKy RErOKXER.] WELLINGTON, August 13, That th. country would be wise in leaving well alone was the opinion expressed by .the Prime Minister when discussing. the question of a State Bank in the House to-day. Sir Joseph Ward said that at one time he had boon favourably impressed with the idea of i. State Bank, but that was before the Bank of New Zealand was assisted by the Government ; and to-day ho was of opinion that a State Bank could not be operated side by side with the Bank of New Zealand - The question arose on the debate on the first reading of the Bank of New Zealand Amendment Bill, a measure introduced by Mr F Langstone (Waimarino) The Bill was described by Mr Langstone as a measure which would, by the alteration of a few words and clauses in the existing Act, make the Bank of New Zealand to all intents and purposes a State Bank, controlled absolutely by the people of New Zealand A great mistake had been mad,- in not making the Bank of New Zealand a State Bank in 1894, when the country came to its aid. Although the bank was ready enough to accept assistance when in difficulties, it gave short shrift to those who found themselves in trouble and appealed to it for help. Sir Joseph Ward said lie did not thoroughly understand the views expressed by Mr Langstone. However, as Finance Minister, he saw' that it was his duty to state how the matter was regarded by the Government. At the period when the State came to the assistance of the Bank of New Zealand, that was in admitted difficulties, it had 37,000 clients and a great number of depositors to whom a responsibility was owing. Had the bank been converted into a State Bank at that time, it could only have been done by putting the Bank of New’ Zealand into liquidation and locking up the assets. That course was thoroughly considered at the time

Mr Langstone: Tho bank could have been bought ior a song. ' Sir Joseph Ward: “No, it could not have been done without disaster to the people concerned. Tho rescuing of the Hank of Now Zealand put the country ahead by years.’’ Had the bank not been helped, practically everyone concerned with it would have lost very heavily. However, he did want to make it clear that the bank to-day had a majority of ‘Government directors. Mr Langstone. With no power. Sir Joseph Ward; “Yes, they have power, and there is the Governmentauditor. This bank carries on the business of tho country, and does it well. It is an institution that deserves the respect of tho people of this country. I. may say that when I took charge last year as Minister of Finance, the Bank of New Zealand offered to come to the assistance of the country through the Government by making money available to settlers and for other purposes Fortunately, 1 did not need to avail myself of that offer, but it was satisfactory to know that tho bank was ready with assistance in case of emergency.” “In my judgment, to attempt to change the Bank of New Zealand into a State Bank is impossible,” added Sir Joseph. “ The responsibility to the shareholders has to he recognised, and, except by paying the full amount of interest to the shareholders, it could not bo done I may say lam not prepared to admit that, that amount might not be mor than wo would be prepared to pay As it exists at present, the Bank of New Zealand is a senriStato bank. It is as nearly a State Bank as you could have it, and wo would be weß advised to leave well alone. As regards a State Bank, at one time I was favourable to the proposal, but that was before the Bank of New Zealand was granted assistance. In my opinion, we couldn’t Operate a State Bank side by side with the Bank of New Zealand.”

Mr Limestone's Bill was road a first time, and is unlikely to conic up again this session.