CENTRAL BANK

Evening Star, Issue 21515, 13 September 1933, Page 8

CENTRAL BANK

STATEMENT BY MR GIBBS VIGOROUS REPLY TO MR COATES [Psk United Press Association 1 September 13. On the publication of the concluding section of Mr Coates’s Central Bank statement, comments were issued to the ‘ Post ’ by Mr 11. W. Gibbs (chairman of the Bank of New Zealand). Mr Gibbs said he considered that tho Minister had carefully avoided any useful criticism, and had failed utterly to give any satisfactory reasons for setting up a central hank in New Zealand or the advantages to be derived therefrom, “unless, indeed, the maze ’ of volubility which his official essayists prepared for him to launch on the public is thought to do so. Certainly we are told that a uniform note issue would bo a commercial convenience. In what way? The trading public is quite satisfied to get hold of the well-backed notes of the trading banks, and would show no greater preference for notes of the proposed new proprietary institution. The main thing in these days is to get hold of the notes. “ The Minister denies the dictation of London financiers. Suppose we substitute the word pressure. He, perhaps, may not be so ready to deny that. It is possible that this was couched in diplomatic language akin to our voluntary conversion. He may have been asked to kindly introduce legislation voluntarily, but if you don’t finance language is that is is invariably strictly honest, straightforward, direct, and unequivocal. “The Minister denies that there should be any restriction on credit due to the requirements of a central bank—another proof of how little he knows about tho question and how deplorably incapable he too often is of seeing the obvious. The events connected with the South African Reserve Bank are recent history, as also are those relating to tho American Federal system, and my remarks thereon were statements of well-known fact. The proposed dangerous interference with the banking structure in New Zealand at the present time, I still maintain, warrants my repeating the Chancellor of the Exchequer’s remark that this is no time for rash experiments in monetary matters.”