CENTRAL BANK

Manawatu Standard, Volume LIII, Issue 245, 13 September 1933, Page 7

CENTRAL BANK

REPLY TO FINANCE MINISTER. PROPOSED MEASURE CONDEMNED. Per Press Association. WELLINGTON, Sept. 13. With reference to the concluding section of Rt. Hon. J. G. Coates’s Central Bank statement, comments have been issued by Mr It. W. Gibbs, chairman of the Bank of New Zealand. Mr Gibbs said he considered that the Finance Minister had carefully avoided any useful criticism and had failed utterly to give any satisfactory reasons for setting up a Central Bank in New Zealand or the advantages to be derived therefrom, “-‘unless, indeed, the maze of volubility which his official essayists prepared for him to launch on the public is thought to do so. “Certainly,” Mr Gibbs added, “we are told that a uniform note issue would be a commercial convenience. In what way ? The trading public are quite satisfied to get hold of the wellbacked notes of the trading banks and would show no greater preference for the notes of the proposed new proprietary institution.

“The main thing these days is to get hold of the notes. “The Minister denies the dictation of London financiers. Suppose we substitute pressure; he perhaps may not be so ready to deny that it is possible. This was couched in diplomatic language akin to our voluntary conversion. He may have been asked to kindly introduce legislation ‘voluntarily,’ but ‘if you don’t —' but my experience of London finance language is that it is invariably strictly honest, straightforward, direct and unequivocal. “The Minister denies that there should be any restriction of credit due to the requirements of the Central Bank —another proof of how little he knows about the question and how deplorably incapable he too often is of seeing the obvious. “The events connected with the South African Reserve Bank are recent history, as also are those relating to the American Federal Bank system, and my remarks thereon are statements of well-known facts. “The proposed dangerous interference with the banking structure in New Zealand at the present time, 1 still maintain, warrants my repeating the British Chancellor’s remark, that ‘this is no time for rash experiments in monetary matters’.”