RESERVE BANK

Northern Advocate, 27 July 1934, Page 8

RESERVE BANK

PAYMENTS OF INTEREST. j I MEMBERS TX THE DARK, i I'iTO STM EYING IDLE. j 1 (Per Press Association.—Copyright.) WELLINGTON, This Day. | Tho second reading debate on the I Finance Bill teas continued in the. j House of Representatives last night, ! after Mr Coates and Mr Savage had spohen. Mr E. Langstono (Labour, Waimarino) said the Government had to pay £25,750,000 to gel that £23,000,000 in | J.ondon, and it had to pay 5 per cent I to tlie banka on ihnl £23,750,000. He i tliought the cutreney should be entirely separated from sterling. Mr R. A. Wright (Independent, Wellington Suburbs) said Mr Coates’ carefully prepared explanation did not tell members what they wanted to know. They were still left in doubt as to what the exchange had cost tho country up to the end of last year. The Minister said ho did not know. As far as he (Mr Wright) could make out, it was nearly £4,500,000, and nearly another £1,000,000 in interest payments in London. Where was the money to come from? "Would tho Reserve .Bank issue notes to make it good, or would the Government raise a loan? If the Minister took tho country into his confidence ho would straighten out his own position. "Was the Government preparing the way for permanent currency depreciation? Mr W. Nash (Labour, Hutt) said the fact that the Reserve Bank was paying the Government so many notes in New Zealand to take over a certain sum of credit in London did not in any way alter the fact that £23,000,000 in sterling was lying in London. Ho thought each country should have a reserve bank, but it should bo entirely removed from private interest. The Government had not saved working farmers by its policy. The only advantage was that some farmers received money from the people of New Zealand to pay some of their debts. The farmer was entitled to help, and Mr Nash thought the farmer would realise that tho townsmen must also bo helped to the same extent. Mr F. Lye (Government, "Waikato) said the British importers carried the burden of the additional exchange. Currency depreciation Avas in progress in every country of consequence in j Hio Avorld today. The advantage of the Reserve Bank rvas that the Go Adornment could get finance through I the bank, and any profit after the inI terest on tho £500,000 inscribed capital i ivas paid AA-ould go to the Consolidated Fund. Tho cost of public finance Avould bo the mere administratiA'c cost. Mr A. J. .Stallworthy (Independent, Eden) asked tho Minister .if local bodies Avore aAvarc of the pnmsion in tho bill regarding sinking funds, and jif any oppositon had been expressed jby them, ft, Avas a serious matter to [ many local bodies, and placed an extra j burden on ratepayers.

LABOUR AMENDMENT STATE CONTROL " DEFEATED BY SIX VOTES (From Our Parliamentary Special.) WELLINGTON, This Day. Designed to establish Government j control of the Reserve Bank of New {Zealand, an amendment moved in the {House this morning by the Leader of j the Opposition, Mr XI. .1. Savage, failed to attract support from those members of the Coalition who, under the description of the “Study Circle, ” were last session spirited in their advocacy of the view that the appointment of the Governor and Deputy Governor should be largely controlled by the Minister of Finance, after consultation with the bank directors. By the slender margin of six votes, the Opposition suggestion was negatived, the only Coalitionists voting with Labour being Messrs W. ,T. Poison and .1. Connolly. The alleged change >of front of the erstwhile critical Government supporters was j the subject of sardonic comment by l !’• Fraser (Labour —Wellington j Central). When the division was taken the amendment was defeated by 34 votes to 28, Messrs Poison, Atmore, Stall- i worthy, Samuel, Tirikatenc, Rushworthj I and Connolly voting with the opposi- j j tion, and Mr R. A. Wright voting with I j the Government. The two leaders of | the “Study Circle,” Afessrs Lye and j Hargest, also voted with the Governi ment.