BANKING IN DOMINION

Hawera Star, Volume LIII, 9 March 1934, Page 5

BANKING IN DOMINION

QUESTIONS ON POLICY

EVIDENCE BEFORE! INQUIRY

(By Te’i»zraDh- -Pres« Association..) WELLINGTON, March S,

Examination of representatives of the Associated Banks by members of the Parliamentary Monetary, Committee was continued to-day. Mr H. M. Rushworth asked Mr EL C . Fussed, representing the banks, whether he admitted that during the world-wide depression the power of sovereignty had passed from the Governments to Jdie banks. Air Fussell: Ido not admit that. Mr Rushworth : Has any property increased in value during the depression ? Air Fussell : The general trend has been downward. Air Rushworth asked Mr Fussell if he knew Major Douglas had had to leave New Zealand because of fixed engagements in the United States and in Canada. Air Fussell said he did not know that. Air Rushworth : And' that one of the most pressing reasons was that he had been urged to call on President Roosevelt- at Washington as soon as possibleP Air Fuss ell: I note the information. Air Downie Stewart pointed out that the Government had recently taken the banks’ gold at parity and not at "the price asked by the hanks, and asked whether this was not further, evidence that sovereignty did not rest with the banks.

Mr Fussell: That indicates that the banks have neither sovereignty nor the sovereigns. Mr Stewart: Is it not a fact that the Government put up the exchange rate against the advice of the banks—a further indication, that sovereignty rests with the Government? Mr Fussell- Yes, that is a further indication. Mr Stewart said Mr Hush worth had asked whether the banks would cooperate in a judicial inquiry set up by the Government. Would not the banks have to co-operate whether they wanted to. or not as Parliament had power to compel them? Mr Fussell : Yes; there is no need to ask for co-operation. Mr Stewart: You consider that the banks in New Zealand have stood up to the depression as well as any banks in the world? Mr Fussell: That is so. Mr Stewart: You agree that experience has shown that one of the greatest evils the country can have is weak banks? . , ~ e Mr Fussell: It is a major calamity it the banks fail. .Mr Stewart asked whether the banks had considered there was need for saie'Uiards to be placed over institutions outside the trading banks which were doing banking business. .. , Mr Fussell replied that he considered it was necessary that there should be safeguards over those institutions, especially when they accented deposit money. He added that the banks Vfould like to see a cheaper credit policy.but thev could not initiate such a policy unless other financial institutions did likewise a rt _ banks’ reserves were monetised in the way suggested by Major Douglas would that not induce the capacity of the banks to make advances? Mr Fussell: Tes. , Mr Stewart: It would. mean theie would be no reserves to tide you ovei in til tips of storm r* . . Mr Fussell: That is so. lon cannot have your cake and eat it. d “In a physical sense New Jenianu to-day is better than ever it was. Mi Langstone asked. mJ- Langstone:°Then there seem# to wrong with the financial side of it, doesn’t there r Mr Fussell : Oh no, I would not Mother the mHlience of the banks was not dot l-ment-il to the community as a wdiole. SHs stwssvw “MrS&toß. inquired whether the hanks any influenee on the they advised the t'evernment from time to- time ulieu t'liev were aetinjr as the Government’. of the banker’s ren'sv entative was adjourned and no date |,as been fixed for the resumption.