“FLIGHT OF CAPITAL”

Evening Star, Issue 22775, 9 October 1937, Page 9

“FLIGHT OF CAPITAL”

MR BODKIN REPEATS ALLEGATION MINISTER’S INSISTENT DENIAL [From Our Parliamentary Reporter.] WELLINGTON, October 8. Opposition speakers in the Financial Debate are making a strong and concerted effort to get the Government to explain its intentions regarding the taking over of one or more of the commercial banks in the Dominion, but they have not succeeded so far, the advice of Mr J. A. Lee (Parliamentary Under-Secretary to the Prime Minister) being “ wait and see.” The task,was taken up in the House of Representatives this afternoon by Mr Bodkin (Otago Central), who suggested that the time was ripe for a declaration of the Government’s policy in relation to the trading banks, which had rendered this country magnificent service. .Whatever criticism could be levelled at them, the one outstanding ray of light in the last slump was that New Zealand went into that depression with its banking institutions in a position which was never sounder. He did not think anyone could find a single instance during the slump of the failure of the banks to provide credit for anyone who was credit-worthy. The real difficulty they faced was the complete absence of sound borrowers. All the wild talk from the. Government benches about providing unlimited capital for people who were not creditworthy was 'just idle talk, which would lead nowhere but to bankruptcy. Reiterating his demand that, the Prime Minister should make a statement on banking policy, Mr Bodkin found himself involved in ,a dispute with the Minister of Finance. He stated that during the last year £6,264,000 had gone out of the country. He quoted figures to show that the overseas accounts failed to balance by that amount, and said that amount could only be accounted for as capital leaving the country. _ The Minister of _ Education, Mr Fraser, rose to a point of order, and asked if a member of the House was permitted to make a statement which would alarm the people of this country, and which whs quite incorrect. Speaking to the point of order. Mr Kyle (National, Ricoarton) said Mr Bodkin was quoting figures which had been included in the official statistics and quoted in the'Budget. • The Minister of Finance (Mr Nash); 1 would not stop yon now, but I am trying to stop you from doing damage to the credit of , the country. Your statement is quite untrue. Mr Speaker: Order! Order! Mr Speaker said he had not heard anything in Mr Bodkin’s remarks that would warrant him checking Mr Bodkin’s line of argument. Mr Nash asked if he could make an explanation, speaking to the point of order. He did not want to make a speech, because ho had a complete reply to the statements that had been made. If he could not make- his explanation, the statements would go over the week-end uncontradicted, and would do a great deal of damage. He wanted to reassure members of the House and the people of the country that not a single pound of New Zealand capital had gone out of the country which could not be explained. Mr Bodkin’s criticism drew a sharp reply from Mr Richards (Governmet, Roskill), who said that Mr Bodkin had tried to : create the impression that the people of New Zealand were in danger of having to face a disaster worse than the recent economic depression. “Ho has done the country a groat disservice,” said Mr Richards. “He has endeavoured to create an atmosphere of • panic, and no one will thank him.'” Mr Bodkin had made great play on the people’s savings, but he had forgotten to mention that two years ago, when the Labour Government was placed in power, the deposits in the Post Office Savings Bank showed the average savings of the people to he £49 a head, 'yet within a year this average had risen to £62 a head. This was the direct result of the policy which Mr Bodkin had done his best to condemn. It showed that people were not afraid of danger threatening their savings. Mr Richards then repeated the challenge thrown out by other Government speakers, asking the Opposition to tell the country which part of the social service expediture provided for in the Budget wag extravagant, and what portions of it they would reduce.