EAGERLY AWAITED

Nelson Evening Mail, Volume LXX, 30 March 1936, Page 2

EAGERLY AWAITED

GOVERNMENT’S LEGISLATIVE PROPOSALS MAKING THE RESERVE BANK A STATE INSTITUTION PROBABLE NATURE OF AMENDING BILL (By Telegraph) (From “The Mail’s” Parliamentary Reporter) WELLINGTON, This Day. The public is eagerly awaiting the Government’s first legislative proposals, and it is evident that the uninformative Speech from the Throne has given rise to some feelings of disappointment on tlie part of those who expecting that the Government would seize the earliest opportunity of taking the people into its confidence. Apart from the announcement that there are to be vital amendments to the Reserve Bank of New Zealand Act and that the Government intends to take control of the country’s credit, close secrecy has been observed as to the details of the policy to be followed. So much has been left unsaid that the public is stiil in the dark as to what the future holds in store. There is a general impression abroad that it is only a matter of days before the Government will fill in the blanks.

Although the next week or two will see the introduction of several major bilis, including a measure altering the constitution of the Reserve Bank, it is unlikely that the Government’s main financial proposals will make their appearance until the Minister of Finance presents his first Budget. It seems certain that the Hon. Mr Nash will not be in a position to do that for several weeks. The accounts for the year do not close until to-morrow, and some weeks may elapse before the Government is able to ascertain exactly where it stands. In the meantime the Government intends to proceed with the Reserve Bank of New Zealand legislation. The amendments to the original Act will be fairly simple in character but they will be farreaching in effect. Shortly, the amendments will have the effect of turning the bank into a State institution. That will he done by buying out the private shareholders who, under the terms of the original Act hold shares to the value of £500,000. The basis on which private shareholders will be bought out has not been disclosed in detail, but it has been stated that the shareholders will have nothing to lose. Presumably, then, they wih be bought out at current market rates. The par value of the shares was £5, and they are riow quoted at about £5 lbs. The actual term on which the transfer will he affected will be disclosed in the coming legislation. Provisions for the purchase of shares will be the main feature of the amending Bill, but there will naturally be a number of consequential amendments. For instance, the position of the four shareholders’ directors will be involved. It is plain thdt if there is no private share capital there cannot be any directors representing shareholders. The original Act provided that there should be four shareholders’ directors, and the first of these was due to retire on 30th June of this year. What will become of the four directors under the amending Bill is somewhat obscure at present, but the suggestion is made that their services may be retained in the meantime at least, and they will actually become State directors. That would he in keeping with the Prime Minister’s statement that those administering the Bank at present would continue to do so, but that the policy would be-dictated by the Government.

On the other-hand there is some authority for stating that the whole constitution of the board might be' altered. However, that is one of the matters that the Government is keeping to itself. The Act as it stands at present imposes a number of restrictions on the operations of the bank, but it is obvious that once the bank becomes a State institution, many of these restrictions will be removed. It is stated that the amending Bill will give the Government complete power to finance all undertakings to which it is immediately committed. The Bill is likely to be a big one. For instance, the Government is already committed to the completion of a number of public works on which the major is the East Coast railway. As soon as legislation repealing the setting up of the Government Railways Board has been passed, the Government will be free to go ahead with this work and with any other undertakings. There is the South Island main trunk lino to be considered. Although no definite promise has been made that this work will be completed, sufficient has been said by the Prime Minister to indicate that the project will be favourably considered.

The Government is determined to push ahead with public works as a means of overcoming the unemployment difficulty. It is essential that there should be some relief for the Unemployment Fund, which at present is being over-spent at an alarming rate each week. The Government also has plans for improving the rates at present paid to men on sustenance and to relief workers, so the need for relieving the main fund bebecomes more urgent.