RESERVE BANK BILL.

Horowhenua Chronicle, 7 April 1936, Page 5

RESERVE BANK BILL.

CLAUSES UNDER DISCUSSION.

CANCELLATION OF SHARE * CAPITAL. (By Telegraph—Press Association.) WELLINGTON, This Day. The 'House after 2 a.in. continued discussion of the clauses of the Reserve Bank of .New Zealand Amendment Bill in committee. A protest was made by Opposition members against the cancellation of the share capital, Hon. G. W. Forbes stressing 1 that the presence of private capital gave greater confidence in the bank. Hon, J. G. Goates thought the procedure unwise and said that Greece on one occasion tried an experiment similar to the one now being tried in New Zealand. It became a political machine and ended in disaster. The bank would not be a reserve bank, but a Government institution, which would not perform the functions of a reserve bank. A division was called for and the clause was carried by 51 votes to 15, Mr. Poison this time voting with the Government. The Speaker, Mr. W. Barnard, took his seat in the House for a time, but did not speak or vote. This is the first time the Speaker has appeared in committee for many years, probably since Hon. Guinness held oliieo. -Mr. Cobbe made his first speech tonight as a private member, he having held ministerial office since elected in IDAS. Dismissal of Directors. A protest was also made against the power given for the instant dismissal of directors as they should retain office till their term expired, but by Ci(ler-in-Coancil, the director's services could be dispensed with at almost a moment’s notice. No appeal was provided and Mr. Wright suggested that a director so dismissed should receive three months’ salary.

Air. Coates said the clause (clause six) was most unusual. It was entirely new and was creating history of a most unsavoury nature.

Hon. W. Nash pointed out that the present law provided that the Public Trustee should hold ollice during the pleasure of the Governor-General in Council and could be removed at the pleasure of the Governor-General in Council. Air. Kyle suggested that a director should be given the opportunity to resign. Air. Wright said the Public Trustee was not likely to come into collision with the Alinisters, while directors of the Reserve Bank were. Ho moved as an amendment that any director called upon to retire shall receive three months’ salary in lieu of notice. Hon. W. Nash said the directors did not get a salary. The Chairman of Committees ruled the amendment out of order as it involved appropriation. Air. Coates said the Alinister was merely splitting terms as directors received an hororarium. Air. Nash said the directors received Tees and allowances which they voted themselves. They objected to it being said that they received a salary. Air. Hamilton then moved to delete the provision that directors should hold ofliec during the pleasure of the Gov-ernor-General in Council. The amendment was lost by 48 votes to 15. Powers of Minister. Air. Poison moved an amendment to clause ten with the object of limiting the power of the Alinister. This also was lost by 48 votes to 15. Air. Wright moved a further amendment, the effect of which would be that the monetary policy of the Government be given effect to if directors agreed to it. This amendment was lost by 48 votes to 15.

Mr. Nash proposed a new sub-clause providing that regulations be submitted to Parliament that if Parliament was in session, or if not, it be brought before Parliament within 28 days of the commencement of the next session. This was agreed to. Messrs Hamilton and Hargest further Opposed the clause, Mr. Hargest saying it was the practice of farmers in the South to send goods to the other side of the world to sell and they desired to have a say where they should sell their goods. Mr. Forbes expressed the opinion that a line of up to £14(10 for a breach of the regulation was too heavy, and it seemed the regulations must lie very important to warrant such a drastic penalty. The clause Avas challenged but was passed by 48 votes to 10. Coming to clause 12 dealing with the provision of overdraft for the purchase*an<l marketing of New Zealand produce, Mr. Poison moved an amendment to limit the overdraft to an amount not exceeding the value of exports of the Dominion for the preceding year. The amendment was lost by 46 votes to 16.

Mr. Coates moved that the Minister of Finance should present a statement to Parliament regarding the overdaft account at the end of each produce year, namely July 31st, but this was lost on the voices and the clause pass- j *ed by 45 votes to 15. Attempt to End Sitting. Mr. Smith made an attempt to end the sitting at 4.55 a.m. by moving that the Chairman report progress. He was supported by Messrs Forbes and Broadfoot, but the motion was defeated by 46 votes to 15. Considerable time was spent on clause 15, increasing the authority of the. Reserve Bank to grant accomodation to the Treasury. Opposition members asked why the Government was taking the power to borrow in antici-

pation to the full estimated revenue, instead of half the revenue, as previously. He said this might lead to exaggerated estimates and provide authority to obtain an unlimited overdraft. The danse was carried by 45 votes to 15. The qualifications of an auditor were threshed out on the clause dealing with the appointment of auditors, the Opposition suggesting that an auditor should be a qualified accountant, and a qualified persom, but the clause was retained unaltered by 40 votes to 15. i “Banks Scared of Minister.” "Banks really have to wind up, they are scared of the Minister of Finance. I do not remember the Dominion being in such a cowed condition, the whole country is stunned, ” said Mr. Forbes, when speaking on clause 23, providing that balances are to be maintained in the Reserve Bank by trading banks. He added, "trading banks would be at the merev of (he Government.”

j At a.m. Air. Wright moved that the Chairman report progress. He said the clause could not lie allowed to go through without protest. Alembers were tired and needed a rest and no Bill so important and far-reaching had ever been introduced into the House. The motion was supported by members, Air. Broadfoot saying (lie Opposition was determined to make the public acquainted with the provisions of the Bill. At 7 o’clock Air. Ravage moved that the motion bo now put, amid cheers i from his own side ami disapproval from the Opposition. The closure was carried by 47 votes to Id. “Nosey Parker” Clause. A motion to report progress was defeated by 48 votes to Id and the clause was carried by 48 votes to Id. Air. Coates classed clause 24 requiring trading banks to furnish a monthly return to the Reserve Bank as a “Nosey Barker” clause and thought such detailed statements unnecessary. In this, he was supported by several members. Air. Ravage moved the closure after about 2D minutes discussion and the motion was carried by 49 votes to K> and the committee stage was completed at 7.40 a.m., the House adjourning for breakfast till 9 o’clock. House Resumes. r lhe House resumed again at 9 o’clock when the third reading of the Reserve Bank Bill was taken. Air. Coates repeated his protests against the haste in which the Bill was being put through and appealed to the Alinister to consider the position of those who had purchased shares at a greater price than £0 ds, thinking they were on a safe investment, especially for trustees.

Mr. Forbes said lie bad great hopes for Mr. Nash as a businessman of being able to withstand pressure, because there must be such enormous demands to linance the Government’s comprehensive programme to secure happiness for all. Several of the Opposition members added their protests to what they called the unseemly haste with which the Bill was being put through. Mr. Poison complained that the Opposition had signally failed to get any information from the Minister. He had never experienced such a situation before and it was especially important that all information possible should be given when such an important measure was before the House. He thought the speakers were entitled to some elucidation on the points raised during the debate. The Opposition had not obstructed the measure as they might have done and had merely sought information, but they had not received the co-operation from the Government that it always was talking about.

Labour Members Again Twitted. Mr, Smith again twitted Labour members with their silence, but evoked no response. Mr. Nash said it would have been impossible for the present Government to apply the closure had it not been for-Mr. Coates’ Government. Mr. Coates; “No, Sir, 1. was in Opposition. it was the United Government.” Mr. Nash said that division lists at the time would show and if he was wrong he would apologise to Mr. Coates. The advice of bank officers would not be brushed aside as the Government wanted their advice. Mi'. Hamilton: Provided it doesn’t come to a clash. Mr. Nash: Wo won’t use coercion measures as suggested all night by the Opposition. The Government would discuss its policy measures with the bank officers and their advice would be heeded. He had been assured by the Chairman of the Associated Banks that they would co-operate with the Government, even though they did not like some of its clauses. The third reading was carried by , 55 votes to 17. The House rose at 12.15 p.m. till 7.30 p.m.