The Guardian And Evening Star, with which is incorporated the West Coast Times MONDAY, DECEMBER. 5, 1932. THE RESERVE BANK.

Hokitika Guardian, 5 December 1932, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times MONDAY, DECEMBER. 5, 1932. THE RESERVE BANK.

The Government have notified their intention of bringing down the Central Reserve Bank Bill before Parliament adjourns at the end of the present week. It has been known in politCal circles for some time that the Government and the banks have been at variance bn one or two points in the proposals for the establishment of a central reserve bank, it is now revealed that one of the main questions in dispute relates to th e price at which the Government will take over the banks’ gold reserves. Under the provisions of the Central Bank Bill the six trading banks in New Zealand will be required to transfer to the reserve bank the gold they now hold in the Dominion in exchange either for reserve bank notes, with which they can pay off their own notes, or for credit at the. reserve bank. The average holding of gold coin and bullion by the banks during the quarter ended September 30th., 1932, wars £5,605,426, as compared with £6 942,332 for the September quarter of the previous year, about £1,390,000 having been shipped to London in the meantime. It is understood that in their negotiations with the Government concerning the formation of a reserve bank the trading banks have stated that they will transfer their gold reserves at about £6 an ounce, wlpch is the ruling price. As against this, however, the Government .has stated that n-old has no value until it is exported, and for this reason it is not prepared to pay more than.£3 17s 6d an ounce. At the moment, it is stated. I.there is no project of the question being Settled', "and a suggestion has been mad® that a ispecial tribunal should he set up to decide at what price the reserve hank will take over the gold coin and bullion. In sp'.tb of the failure to opt.?®' on this important point, the Government is determined to introduce the Bill before Parliament adjourns until January 26th., and it is understood the second reading will be taken, and 1 the Bill advanced to the committal stages, leaving its consideration in Committee until after the resumption. There wtes some talk o? a State Bank, but members were generally- agreed, after a Central Bank w.a,s the right institution to possess the sole right of , rote issue and to hold the responsibility of stabilising New Zealand 'urrency. This bank will lioM the Government account and the hanking reserves of the Dominion. The establishment of a- reserve bank is one rf the major /policy moves to be m’ade by thp Government in effecting further economic and financial adjustments to meet the difficult position which has arisen through the continuance of low prices for primary products.