STATE BANKING AND CONTROL.

Evening Star, Issue 25471, 30 April 1945, Page 3

STATE BANKING AND CONTROL.

TO THE EDITOR. . Sir,— Referring to Mr C. M. Moss's letter of the 21st instant, 1 should like to state that my understanding of finance has forced me to the conclusion that justification for the Government's action in buying out the private shareholders in the Bank of New Zealand has been fully demonstrated and proved in many ways. As a reader of ' Elansard,' and also a listener to parliamentary broadacsts, I am very well aware what Mr Nash said when he referred to Mr J. A. Lee's question during the debate on the Land and Income Tax Amendment Bill. Mr Nash said it was quite true, as Mr Lee had sa.id, that under a Machiavellian policy the Government could destroy the trading banks in four or five years, because they could not continue their business, but, obviously, at that point, he added, we would have to do the job ourselves. Speaking as just one member of the Government Party, he preferred to let the banks carry on their very useful service. Mr Lee: "One of these days it will be a good thing to be able to get credit through the Minister for essential New Zealand industries." "I think that will be reasonably provided." Mr Nash replied. "I am certain that when we have rehabilitation and other proceduro under way to the extent that tho money required to enable products to be brought into bfjing cannot be provided by trading banks or by the publie at reasonable rates, it will be provided by the State." Since the above •statement was made the Labour Conference decided the matter, and Mt Yash, who put the Labour movement ahead of all other considerations, assisted the conference to put through the remit. Those of us who have followed the events which led up to the present war, and have seen how the humiliating downfall of France was hrought about, know perfectly well that the Bank of France, controlled by 12 Regents, whose offices and powers were almost hereditary, dominated not only Mie policy of the Bank of France, hut also of 31 other private banks, eight insurance companies, nine railway companies, eight shipping combines, eight mining combines, 12 huge chemical and armament combines, and six of the ■greatest electricity companies in France. Here was the gigantic power of the money hydra which held the Republic in check and dictated its wishes to the Government. It embodied all the evils of a private banking systemj which can destroy, or inhibit, all planning of national economy and technology for the future welfare of the community. We (know that we are going to live in a world of shortage for many years, and the sufferings of postwar Euprope will be on our doorstep. The Labour movement will demand that luxury and acute pr.ivation shall not exist side by side, and that whatever shortages there may unavoidably be shall be equally experienced by capitalist and worker. The New Zealand Labour Party is alive to its great responsibilities in the world sense. Mankind is on the march to new horizons. We think Mr Moss is a bit late.—l am, etc., Ernest Clayton. April 29.