BANK OF N.Z. SHARES

Nelson Evening Mail, Volume 80, 11 June 1945, Page 3

BANK OF N.Z. SHARES

EFFECT OF STATE PURCHASE POLICY Christchurch, June 8. The proposed Stale purchase of the private shares in the Bank of New Zealand is discussed in the latest economic bulletin of the Canterbury Chamber of Commerce, prepared after consultation with the Department of Economics of Canterbury University College. The conclusion reached is that-“to increase inflation and at the same A ime impair the banking machinery needed for its solution might well make our present and prospective difficulties unmanageable.” The bulletin says that the proposal now appears to be favoured as part of a general policy of State ownership and control*of the means of production and exchange. It adds that in practice State ownership and control lead not to freedom and equality, but to a restriction of freedom and totalitarianism. Referring to the experience of the Reserve Bank, the bulletin says that the first effects of Government control were drastic. New Zealand became the first British country to submit to the blocked currency and exchange practices common to totalitarian countries. This was associated with import control. The bulletin discusses tne ability of public servants to deal efficiently with banking. The Public Service is considered by its traditions to be particularly unsuited to the business of the market place, where ' responsibility, quick decisions, prompt action, and flexibility are essential. The belief is expressed that if the Government were to buy the bank and make mistakes the normal next step would be to cover these mistakes by an extension of control over competing institutions whose efficiency might then become impaired. The bulletin comments that already inflation is the key feature of most of our war and post-war problems, and says these will be difficult enough to solve with effective banking machinery and the present extent of inflation.— P.A.