PARLIAMENT.

Hawera Star, Volume XLIX, 14 August 1929, Page 5

PARLIAMENT.

IBANK OF NEW ZEALAND. QUESTION OF STATE BANK RAISED AGAIN. ' **- (By Telegraph—Aßfwaeiation.) WELLINGTON, Aug. 13. The Bank of New Zealand Amendment Bill and the 'Hawke’s Bay County, Hastings Borough and Haveflodk North Town Board Empowering Bill were introduced in the House of Representatives to-day and read a first time.

Mr F. Langstone said the first-men-tioned Bill was designed to restore to those directors of the Bank of New Zealand who were appointed (by the Government the powers that they had origin-ally possessed. He said there -was no more important question to-day than currency and banking, and the solution of this difficulty would do much to solve the unemployment problem, industrial dislocation and commercial stagnation. He wanted light to be ■thrown on -the question whether the Bank of New' Zealand had been conducting its affairs in the best interests of -the country, particularly in regard to the help the bank had received in the past, from the Government. The Government had at that time obtained the right to representation by four directors on the board of the bank, but- by the Act of 1920 the powers of those directors had been taken away. They had no actual say in the transactions of the bank. Mr Langstone suggested the Government, at the time it had assisted the bank, should have taken steps to form it. into a -State bank.

Sir Joseph Ward said that at the time the Government had helped the bank it would have brought about disaster to many clients and depositors connected with the bank had it endeavoured to acquire it as a State institution. The unstable position of the bank at that time had made other institutions adopt a circumspect attitude and, in view of conditions at the time, he considered it would have been impossible to convert the bank into a State institution. Sir Joseph was of opinion that as a result of receiving assistance the bank had placed the country many years ahead in financial matters. The Government had a majority on the directorate of the bank, and it also appointed the auditor. There .was nothing to prevent these officers exercising their powers. The [Bank of New Zealand at the present time was a semi-. State bank, and a,s near as possible to a State bank. In his opinion it would be best to leave well alone. The Government received confidential information every year, giving full details of every transaction conducted by the bank which, furthermore, conducted all the Government's financial business and did it;

well. When he had assumed office as Finance 'Minister, 'continued Sir Joseph, the bank had expressed its readiness to aid him in raising money for advances to settlers and other purnoses. Fortunately, he had not required its assistance, but the bank had demonstrated its willingness to stand behind the country in an emergency. He considered it was a great institution. Messrs AL J. Savage and Ik Fraser said they did not agree that it was impossible to form a State bank on the occasion when assistance had been given the bank. Mr Langstone, in replying to the debate, said he considered it would have been a. simple matter for the Government. try have taken over the .whole assets and liabilities of the bank. There would have been no dislocation of trade.