“THE HIGH PRIEST”

Manawatu Standard, Volume LXV, Issue 227, 24 August 1945, Page 4

“THE HIGH PRIEST”

“OF FUNNY FINANCE.” DEVASTATING. CRITICISM. WELLINGTON, Aug. 23. In the course of the Budget debate ill the House of Representatives this evening, Mr R. M. Algio (Nat., Remu era.) dealt with the nationalisation of the Bank of Neiv Zealand.

Mr Algio said he had been drawn into the debate by remarks on the taking over of the bank by the member for Wainlarino, whom lie described as the “high priest of funny finance.” There, were so many discrepancies in the remarks of tile member as to make it essential that the public should kn,ow how highly this so-called financial expert rated. These statements had been made at a Labour Party conference, in the House, and at meetings throughout the country. At Taihape, for example, the member had said the taking over of the bank was the most

important single question for the people of this country. Was it more important, than rehabilitation, or finding jobs for returning servicemen, housing, or providing for a proper standard of living in a world where competition threatened to be fairly severe? This country managed to run the war without taking over the Bank of New Zealand, and he felt, by the same token, that it could run the peace just as well. Another remark of the member had been that it was not for something political that the Government was talcing over the bank, yet at another meeting last November, described as almost in the nature of a revivalist assembly, he had said he believed by taking over the bank and operating it in the right way the Government would win all 80'seats. How did that statement measure up with one that the bank proposal was not complicated by political motives? WHAT THE STATE GOT.

Further, figures quoted by the member for Waimarino showed strange discrepancies. In his address in the House the previous evening he had said that in 1894 the Government came to the aid of the bank and gave it £5,400,000. Mr Langstone: I said £5,230,000. Mr Algie added that, in a speech at Taihape, the member had told his audience that the Government of the day had pledged cash to the extent of £5,200,000. In another speech in the House in 1944 he said that legislation was passed in 1894 to give the bank £5,200,000 of State money and _ a guarantee. There was a. substantial difference between a gift and a pledge. The speaker said he had looked into the various Statutes passed in that year and could find no reference to £5,000,000. The Acts passed stated that by arrangement with the Government the bank issued shares to the value of £2,000,000 in London, hut gave those shareholders no further rights. The New Zealand Government also guaranteed the English issue of shares, and took out shares itself to the value of £500.000 and held them

for six years till they were redeemed in full by the bank. It would be seen, therefore, that the Government had not given tlio bank anything. What the Government did actually get as a result of the misfortunes of this bank were: (1) Four of the six directors; (2) control of a business which did not cost it anything; (3) in the past six years about £4,000.000 had been paid by the bank, to the present Government in taxation and dividends on shares; (4) the Government appointed its own auditor and insisted on the bank paying for his services; (5) the Government got the right to a special issue of £500.000 preference shares and the right also to one-third of any new capital issued by the bank. The history of the bank had been quoted by the member for Waimarino to lead people to believe there was something sinister about it, hut this history showed that the bank had met its difficulties by using up its reserves. It had then written down

the original £lO shares to £7, so that every shareholder bore part of the losses. Further, there were new issues of capital which were later written down. A QUEER STATEMENT. Another remark by Mr Langs to lie had been that “in order to get the State to become a partner in the biggest robbery in history, laws were passed to enable the bank to appropriate that which did not belong to it.” Robbery was a criminal offence. Surely public opinion would have silenced any such move. Mr Langstone: Public opinion did

not know anything about it. Another statement had been that if the Government could not stop these fraudulent practices it was not worthy of office. Where were those fraudulent practices? Mr Algie said he had followed the honourable member's speeches in various parts of the country, but nowhere had he explained what these fraudulent practices were. Furthermore, the Bank Act of 1894 contained a section which provided adequately for fraudulent practices. The honourable member had further stated that “even now the bank was putting in®fraudulent reutrns.” It was a wonder the bank did not take an

action for libel, but perhaps it considered it not worth while sending good monev after bad. (Laughter.) After quoting seven reasons given by the member for Waimarino why the Government should take over the bank, Mi Algie said lie could not find one good argument among them. They were nebulous and meaningless. One reason was that by so doing the Government would have complete control of credit, but the Minister of Finance had already indicated that the Government had that power. Mr Algie said his whole desire in entering the debot id been to show that the member i Waimarino bad tried to build up a case that would not stand on fact?. He felt he had achieved that purpose. Applause greeted the speaker when lie resumed his seat, the meniher for "Waimarino good-naturedly joining in.