CENTRAL BANK

Manawatu Standard, Volume LIII, Issue 284, 28 October 1933, Page 9

CENTRAL BANK

DEBATE ON BILL. PREMIER REPLIES TO RESOLUTIONS. Per Press Association. WELLINGTON, Oct. 27. When the House of Representatives met at 2.30 p.m., the second reading debate on the Reserve Bank Bill was continued. , Mr A. Harris said a Central Bank would make artificial manipulation of the exchange rate impossible. He was sure the Dominion would not have had to endure the present high rate if a Central Bank had been in existence last January. Mr A. J. Stallworthy asked if New Zealand was to submit to world financial domination. He said the Bill was a highly technical measure and the spectacle was presented of Government members not understanding it, though they would vote for it. There was grave reason for a suspicion that one reason for the Bill was to extricate the Government from its serious financial position due to the high pegged exchange. He could not support the measure, which would throw so much power into the hands of international financiers. Mr F. W. Schramm characterised the shareholder capital provision as a retrograde step. Rt. Hon. G. W. Forbes said he knew that outside organisations had been attempting to influence the voting of Coalition members on the Reserve Bank issue. He knew all about the resolutions which had been sent to members directing them to carry out the will of some organisation which had arranged a public meeting at which a resolution had been passed after a speaker had advanced a one-sided argument. “It is a sort of veiled threat that they must carry out the direction of some self-appointed body,” he said, “but if members were to have their conduct dictated in this way, they would be spineless creatures, and it would be a poor look-out for Parliament and New Zealand. Members come here with the desire -and intention to do their duty to their constituents without taking heed of threats. I have received a number of telegrams of a similar character, but members of Parliament and members of the Government are in a much better position to judge these, issues than the people who attend public meetings and pass resolutions. A Government which merely complied with resolutions could hardly be regarded as progressive, because it would have to be driven.” Mr Forbes said that if the Bill were not passed, New Zealand would, be seriously handicapped and deprived of the full benefits of a financial policy that could be carried out through the central institution in co-operation with other countries. PROPOSAL STUDIED OVERSEAS. “When Sir Otto Niemeyer presented his report about two years ago, 1 had my doubts and I admit I did not thoroughly understand the value of the recommendations. Since then there has been a full opportunity for study and examination. We have had exceptional opportunities for gathering information both at Ottawa and at London.” The Prime Minister said it had been the unanimous opinion at the Ottawa Conference that a central bank would be of great assistance towards co-oper-ation within the Empire. Mr Downie Stewart had then visited London, and as a result of his conversations there had cabled the Government urging it to introduce, central banking legislation immediately. Experts for all the countries represented at the World Conference had emphasised the importance of central banks in all countries, and with the object of achieving financial co-operation the conference had passed very definite recommendations on the subject. The very thing that the Government was aiming at was co-operation in trade and finance, but because it spoke of seeking co-operation with other countries it was accused of being prepared to accept domination from other nations. Co-operation did not mean that one country would dominate another one. The main benefits of the Central Bank would be that New Zealand would be supplied 'with information relating to world movements. If there had been a Central Bank in 1931 New Zealand would have been in a much better position to meet the conditions which arose. It was absurd to suggest that the Government did not control the Dominion’s monetary policy. As a matter of fact, it would have a greater control than ever it had had previously. Mr A. S. Richards said that the bankers and the banks would eventually secure a monopoly of public credit and resources and all undertakings would be controlled by the banking institutions. Prosperity could only be achieved by increasing the consuming power of the people, and there was no provision for that in the Bill. Mr J. Hargest said he believed that tlxe passage of the Bill would provide an institution of tremendous importance to the country and it was the duty of every member of the House to see that it was built on sound foundations. He urged the Government to retain the right to appoint the governor and deputy-governor of the bank, and he suggested that the rate of 5 per cent, on the shares was too high and should be reduced to 4 per cent. The debate was adjourned on the motion of Mr A. J. Murdoch and the House rose at 5.30 till 2.30 p.m. on Tuesday. Mr Forbes intimated that it was intended to proceed with the Central Bank Bill on Tuesday.