RESERVE BANK BILL

Greymouth Evening Star, 7 November 1933, Page 12

RESERVE BANK BILL

GOVT’S POLICY CONDEMNED.

[FEB PRESS ASSOCIATION.]

WELLINGTON, November 0. A public meeting of protest against the Government’s Bill for the establishment of a Central Reserve Bank, was held in the Town Hall, to-day. The body of the hall was filled, and the audience, with a few exceptions, showed itself very opposed to the Government’s proposals. During the early stages of thq meeting there were a good many interjections, and one interjector, at the request of the chairman, Mr A. De. B. Brandon, was conducted from the hall by a constable. Another interjector, more brief in his remarks, vfas also conducted from the hall, remarking, “Here’s your liberty.” The Chairman declined to allow an amendment to be put to the meeting. The resolution carried protested against the hasty passing of the Reserve Bank Bill, which violated the principle of non-political interference. It would destroy public confidence, and seriously threaten the independence of the bank. i The meeting also protested against the proposal of the Bill to expropriate the gold held by the trading banks, without provision for assessment of its value by an independent tribunal, as a flagrant breach of public policy and public morality, which would establish a disastrous precedent, and gravely prejudice ' the credit of the country. The Chairman said that the Dominion had reached a very critical stage in its existence, and now met with the most serious invasion into purely business, matters by /‘this, nondescript creation called the Reserve Bank,” to know whethet this meeting is a hole and corner one,” asked a man in the front. He was told to sit down, but persisted in making his voice heard.

“You have got no standing of any kind,” he was told. - “I have got good feet,” was the reply. The interjector sat down, but later interrupted several times, and finally was escorted quietly from the hall by a police constable. “That’s liberty of the subject if you like,” commented a man in the gallery.

The first speaker was Mr Stronach Peterson, who said he wished to draw attention to that part of the Bill which dealt with the appropriation of gold coin and bullion, at present held by the trading banks. The intention of the Niemeyer report was that trading banks should receive for their gold its value in currency based on gold. “The view of the man of average business intelligence and of sound commercial morality,” said Mr Patterson, “is that the trading banks should have the same right to sell their gold at full market value as all other people have to sell other commodities or other property at its full market value, and that the proposal of this Bill is an act of simple bare-faced robbery.” THE EIGHTH COMMANDMENT. The next speaker, Mr A. R. Atkinson, said it was not a State Bank, but a Reserve Bank that the Government had set out to construct. The Government had gone much too far in the direction of State control. It was a remarkable combination of Labour Party, which favoured a Stale Bank with a “study circle,” which did not, that had forced the hands of the Government and brought about that result. “My second point goes much deeper,” said Mr Atkinson. “For it touches the very root of public honesty, and fair play. My text might be ‘Thou shalt not steal.” That simple text does not say that private persons may not steal, and that Governments may, not that you must not steal from private persons, but ’that you may steal from a bank. Even in America they do not go as far as that. It simply says “Thou shalt not steal.” There was no reason for the Government’s violation of a sound and equitable principle and for annexing valuable property without giving orders the normal production of an independent tribunal. “Blindly confident in its own policy and in the strength of its party majority, the Government has failed to realise that a’large share of its public confidence was withdrawn when it compelled Mr Stewart to resign. The same blindness prevents its seeing how seriously the remnant has been reduced by the rejection of his arbitration clause. The rejection of Mr Wright’s amendment to restore that clause by 56 votes to 5 is to me the saddest thing in the deplorable business.”

“Security is the last gift of civilisation for without security there can be no confidence,” said Mr Hugh C. Jenkins, of Wanganui. “The Government policy had already by ’25 per cent, or at. least 15 per cent., destroyed the security of money contracts: made in New Zealand with persons outside the Dominion. The whole Bill had been drafted not to establish a sound Central Bank, but to assist the Government out of its present deplorable financial muddle and to allow the “rake’s progress”, to continue a little longer than sound banking would allow. The Government had overshot the mark of sound finance, and the Treasury Bill finance was being abused. With trading banks taking up say £5,000,000 of Treasury Bill, you will see that the exchange chickens can be prevented from coming home to roost for a little longer yet. That is the kernel of the whole matter, and that is the reason why no Cabinet Minister- has sought to defend in public this unsatisfactory proposal.” The concluding speaker was Mr R. A. Wright, M.P., who said he believed the exchange difficulty was the major reason for the rushing through of the Bank Bill. • He did not believe for a moment that the Reserve Bank was going to declare exchange to be free because the Reserve Bank would carry out the policy and currency of the Government. His view was that unless the bank was completely free of all political control, it was going to be a danger and menace to the Dominion. The Chairman put the resolution to the meeting, and it was carried on the voices.

MR COATES’S REPLY. WELLINGTON, November 6. The Minister of Finance, to-night, issued a statement along the lines of that which he made on the introduction of the. Reserve Bank Bill, re-stat-ing, in a more concise form, “reasons that, in the view of the Government, conclusively justify the course it has adopted.” Mr Coates stated that the Government had obtained opinions from world authorities bn banking matters, who were in a position to consider the

question quite impartially, and they were unanimous and emphatic that th course taken by the Government was the proper one. He knew of no banking authorities who had expressed contrary opinions, and it must be taken that’ the view of the Government had the confirmation of informed opinion.