BANK OF ENGLAND

Nelson Evening Mail, Volume 80, 6 August 1945, Page 3

BANK OF ENGLAND

NATIONALISATION PLANS

TROFESSOR LASKI’S STATEMENT STIR CAUSED IN LONDON London, Aug. 2. Just as the proposals of the Government of New Zealand to nationalise the Bank of New Zealand are creating a stir ip the Dominion, so in Britain the annouficemcnt by Professor Laski, Labour Party chairman, to America that the Bank of England is going to be socialised caused a flutter in the City of London with the bank’s stock falling and the trend of Stock Exchange prices being generally downward. Some surprise was expressed that it should be Professor Laski who should make the first announcement of the proposed nationalisation of the Bank of England and, of all things to America before Britain. His remarks on this came halfway through a "question and answer” broadcast with Edward Murrow. Professor Laski had remarked that the Labour Party were: "Revolutionists in the sense that we want by rational processes of democratic government to reorganise the contra! principle of our civilisation and we think we have got a chance of doing it by common consent and through the mechanism of parliamentary government. “We are are not ardent expropriators of everybody’s property,” he said. "We are not going to touch any little man's savings. We are going in a straightforward and orderly fashion to socialise the ownership stage by stage on a carefully considered plan of priority of the vital instruments of production, upon which the life of this nation depends and we are going to do it through Parliament.” At that, Mr Murrow asked: “What gets first priority in this programme of nationalisation?” and Professor Laski replied:"’"The Bank of England is going to be socialised and the direction of investments will be planned as part of the process of industrial reorganisation. Then the mines and electric power, then iron and steel. Alongside this, of course, housing and the proper development of science and technology have got to be seriously married to industry.” FLOOD OF COMMENT These remarks not only resulted in Bank of England stock making a total after-post-election drop of 21 points but started a flood of comment. The "Daily Telegraph” remarked: "To what extent Professor Laski can be regarded as spokesman for the Socialist Party is a point which only the actual course of events will reveal. It would be foolish at this stage to read too much into the priorities laid down in broadcast speeches. What is of primary importance to investors in all industries under the nationalisation threat is the basis to be adopted for fixing compensation.” The "Manchester Guardian” remarked that outside the circle of the initiated, great uncertainty prevails about what "socialisation” will mean in practice. The paper added: "Great Britain is almost the only country in the world to have a privately-owned central bank. It is true that the present owners have no say at all in the policy of the bank, but if the Government became the owner by buying shares the situation would change. It could, for example, demand the election of directors nominated by it.” There is reason to think that the present governor, Lord Cato, is acceptable to the Labour leaders and the first change would probably be the addition of further industrial and trades union representatives to the court of directors. In regard to the bank’s policy it has been subordinated to the decision of the Treasury ever since 1931, and even Lord Norman when he was governor always loyally carried out decisions taken against his expressed advice. which were not rare. The bank is, of course, the Government’s banker and adviser on financial technique and its advice must have carried great weight with past governments, but the last word has long been with Whitehall. Politically, however, the bank has been independent of parliamentary control, and that is where the most important change will come in. VIEWS OF THE PRESS The "Financial Times” remarks that from a broader angle the facts of the situation limit the practicability of startling changes, and adds: "Never has the Bank of England been closely identified with—even subservient to—-the Treasury. It may be said that to a considerable extent the talK of nationalising the bank is like pushing against an open door, but since nationalisation has obviously to be accepted it remains only to say that this should be carried out in such a way as to minimise disturbance and ensure at least that the public .interest will be served not less weH than by the existing institution. Whatever new organisation is created must be such as will not alienate the confidence of the public if the trade and industry of the country are to flourish. Mr Attlee has already declared in regard to nationalisation of industries that while the public interest should be protected there should be scope for business organisation and the application of scientific methods. This principle at least is sound and equally applicable to monetary practice.” The "News Chronicle” says that to all intents and purposes the bank is now nationalised and suggests it may be that the intention is something more ambitious than merely bringing the Qank of England formally under Treasury control. It may be that the reconstituted bank will at once be invested with formal powers of control of joint stock banks in furtherance of the Labour Party’s declared their operations shall be ‘harmonised with industrial needs.’ In this event the prospect of a much more complex controversial train of legislation is opened up.” The chief effect of Professor Laski’s remarks is to concentrate interest still more intently on the King’s Speech! There has been no comment so far on the New Zealand Government’s plan for nationalisation of the Bank of New Zealand. P.A. Special Correspondent.