“Veiled Threats to Members ”

Manawatu Times, Volume LIV, Issue 7299, 28 October 1933, Page 7

“Veiled Threats to Members ”

Mr Forbes Objects to Outside Dictation

Debate on Central Reserve Bank Bill

Per Press; Association.

WELLINGTON, Last Night. J Tho House of Representatives met at 2.30 p.m., when tho second reading debato on the Reserve Bank Bill was continued. Mr. A. Harris (Govt., Waitemata) said a Central Bank would make artificial manipulation of the exchange rate impossible. Ho was suro 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 (Independent, Eden) asked if New Zealand was to submit to world financial domination. He said tho Bill was a highly technical measure and the spectacle was presented of Government members no understanding it, though they would vote for it. There was grave reason for a suspicion that ouo reason for the Bill was to extricate the Government from its serious financial position due to the high pegged exchange. Ho could not support the measure, which would throw so much power into the hands of international financiers. Mr. F. W. Schramm (Labour, Auckland East; ctiaiaeterised the shareholder capital provision as a rctrogra !e step. Rt. Hon. G. W. Forbes said he k: ew that outside organisations had been attempting to iniiuence the voting of Coalition members on the Reserve Bank issue. He knew all about resolutions which had been sent to members directing them to carry out tho will of some organisation which had arranged a public meeting at which a resolution had been passed after a speaker had advanced a ono-sided argument. “It is a sort of veiled threat that they must carry out tho directions of some self-appointed body,” ho 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 eoine here with the desire and intention to do their duty to their constitutents without taking hoed of threats. I have received a number of telegrams of a similar character, but members of Parliament and members of the Government arc in a much better position to judge these issues than the peoplo 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 tho 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.

“When Sir Otto Niemeyer presented his report about two years ago, I 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.” Co-operation Within Empire, The Prime Minister said it had been the unanimous opinion at tho 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 tho World Conference had emphasised tho importance of Central Banks in all countries, and with the object of achieving financial co-operation, the conference had passed very definite recommendations on tfie subject. Tho 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 greater control than over it had had previously. Mr. A. S. Richards (Labour, Roskill) 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 eould only bo achieved by increasing tho consuming power of the people, and there was no provision for that in the Bill.

Mr. J. Hargest (Independent, Invercargill) said he believed, that 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-gover-nof of the bank, and he suggested that the Tate of 5 per cont. on tho shares was too high arid should be reduced to .4 percent,

The debate was adjourned on tho motion of Mr. A. J. Murdoch (Government, Marsden) 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. Two Measures Passed By Legislative Council Per Press Association. WELLINGTON, Last Night. When the Legislative Council met at 2.30 p.m. the Imprest Supply Bill and Rent Restriction Bill were put through all stages without amendment and passed. Tho Council rose at 2.4.5 p.m., until Thursday next. Notice of New Bills URGENCY FOR CENTRAL BANK MEASURE Per Press Association. WELLINGTON, Oct. 27. Tho House of Representatives met at 10.30 a.m. Notice was given of intentiou to introduce the following Bills: Juries Amendment (Mr. F. W. Schramm), Napier Harbour Board and the Roman Catholic Archbishop Empowering (Mr. W. E. Barnard.) Mr. T. D. Burnett was granted two days’ leave of absence on account of illness.

Replying to Mr. W. J. Broadfoot, Hon. J. G. Cobbc said amendments to tho Mortgagors Relief Act had not yet been considered by the Government. He added that it would be difficult to justify interference with mortgages executed after tho passing of the Aet as Mr. Broadfoot had suggested, because the contracting parties must have been aware of the provisions of tho legislation.

Urgency was accorded the second reading of tlio Reserve Bank (New Zealand) Bill. lit. Hon. G. W. Forbes said there was a big programme of legislation ahead and unless there was some co-operation from the Opposition the session would have to be continued after the New Year. This, however, would not bo necessary if a reasonable attitude was adopted. Mr. M. J. Savage said the Opposition had no desire to hold legislation up, but it did dcsiro to kavo an oppor tunity to express an opinion. Mr. H. M. Rushworth, continuing the debate on the second reading, said it had been stated that in establishing the Reserve Bank New Zealand was taking a lead from other countries. When one looked at the effect of Reserve Banks in other countries all that could be seen was a trail of ruin. In not one instance had they worked in tht interests of the people; they had worked in the interests of international financiers. Mr. Rushworth said it had been stated that one Parliament could not bind its successors, and in theory he agreed with that contention, but in practice it was being continually done. Contracts of various forms were being constantly entered into by Parliament with other countries and other Governments and with individuals of this Dominion. Those contracts had a seantity, and if Parliament could not enter into contracts that would be binding on its successors it would find its functions considerably circumscribed. From the Bill it was clear that authority was to be given to the proposed new bank to enable it to enter into contractual relations with the Bank of International Settlements, lie asked for a definite assurance that in no circumstances would the Reserve Bank be allowed to have any contractual relations with any bank or organisation outside the Dominion. There was a great deal of anxiety throughout the country over the Reserve Bank proposals. For instance, it would be possible for people controlling the issue and retirement of money, by periodic inflation or deflation, to causo prices to fluctuate, and by buying and selling goods with the advantage of knowing beforehand how prices would rise or fall they could make any amount of money. “Without the People’s Consent” Mr. Eushwortli insisted that the Bill was being put through without the consent of the people of the Dominion The Government was determined to “steam roller” it through Parliament and knew it coidd get it through. He pointed out that law contracts could be held to be null and void if it was disclosed that information had been withheld. This would be regarded as fraudulent misrepresentation. He contended that if, when a successive Parliament might attempt to amend the Reserve Bank legislation, it was raised as a plea that contractual relations had been entered into, and it material information concerning these contractual relations had been withheld from the House, the reply would then be that these contracts should be declared null and void because of fraudulent misrepresentation. Rt. Hon. J. C. Coates: That is just a suspicion.

Mr. Rushworth: Yes, but I think the suspicion is justified. Mr. W. T. Barnard said ho could assure Mr. Rushworth in the name of the Labour Party that the Bill was regarded by it as being alterable In every respect by ordinary constitutional methods. The Labour Party as the .Government of New Zealand

would not hesitate to amend the Bill in whatever way it deemed necessary for the purpose of giving effect to the policy of the party as indicated in the Opposition amendment now before tho House. Mr. Barnard said there was only one way to make tho hank truly representative of the nation and the community and that was to make it a State Bank.

Mr. C. H. Clinkard said the appointment of tho governor and de-puty-governor should bo in tho hands of tho Government for all time. Mr. F. Langstone said there was no reason to hope that the Reserve Bank would depart from the “present obsolete system of hanking.” It would be controlled by men with the same ideas as those controlling the existing bank. He contended that New Zealand required a completely now banking system definitely linked to goods and services in Now Zealand and not controlled by outside influences. The Houso adjourned at 1 p.m. Ho Heed to Rush ASSOCIATED CHAMBERS’ VIEWS Per Press Association. WANGANUI, Oct. 27. The conference of tho Associated Chambers of Commerce passed the following resolution: — “That in the matter of the Reserve Bank Bill, this conference is of tho opinion that there is no immediate need to rush through this most important legislation. That is essential. There should be a full and exhaustive inquiry before a duly-constituted Parliamentary Committee, before which evidence would be taken, and a report should be made before committing the country to a most important departure from established banking practice. Tho conference further emphasises the point laid down by Sir Otto Niemeyer that a Central Reserve Bank should be entirely free from political influence or control, directly or indirectly. It is necessary, and should he obvious to all, that there is danger of political interference, and unless adequate safeguards are provided the bank might easily become a real menace to the financial stability of the Dominion.” The following remit was also carried: —“That free and unrestricted entry of our exports into Great Britain is so vital to New Zealand that negotiations should he initiated to ascertain on what torms that right can he secured. We should be prepared to make concessions to achieve that end.”