QUESTION OF A STATE BANK.

New Zealand Herald, Volume XLIV, Issue 13523, 22 August 1907, Page 5

QUESTION OF A STATE BANK.

•LAIN TALK BY THE PREMIER.

AN IMPOSSIBLE PROPOSAL.

|*BT TELEGRAPH. SPECIAL COBRESrONDEXT.]

Wellington-, Wednesday. THE other clay Mr. Ell put the following ""question to the Premier:—"Whether the Government do not consider that the State, which came to the rescue of the Bank of , >*ew Zealand in the time of financial troubles, and by so doing saved the bank from ruin, and has since given the bank a monopoly of public business, and thereby the great advantage of being in a position to publish the fact that the bank is the banker to tiio Government of New Zealand, is entitled as a shareholder to share equally with the private shareholders with respect to dividends?"

P The Premier replied that the terms and conditions' were fixed by statute, and to attempt to alter them would be a breach of agreement. Mr. Ell said, in reference to the last, answer, that apparently something was being kept back. He had never hoard of any agreement upon which the statute law was pus-ed. He thought the present position was monstrous.

Th« Premier, in reply to Mr. Ell, denied absolutely that anything was being kept back. I" proof, ho cited the statute of 1903, which, he said, made the position clear. The position could only be altered by legislation. As to himself, he. had never had any. interest directly or indirectly in the bank. He had been offered shares. ; Some were offered for nothing, and at other times he hat.' been offered shares at 2s 6d, 7s, 10s 6d, and 15s, but he had always declined to touch them, so he was able to speak with complete freedom in this matter. He proceeded to refer to the pressure that was being brought to bear to establish » State bank. Ho had been receiving i numerous requests. '; Mr. Massey: They ,>ll originate in Christchurch. They are all printed in the same way. The Premier said he was in receipt of resolutions from all over the colony asking the Government to take over the bank, but as the bank had liabilities amounting to £18,395,000, that would bo an absurd thing for the Government to do. He was being asked by large numbers of people, in the most innocent manner, to assume the enormous responsibility that would be incurred by taking over these liabilities. Supposing the Government were foolish enough to do so, what would ,'ollow? -'he shareholders controlled the whole of the deposits, some 13 millions sterling. ' If the Government said they would take over the institution, it was not likely that the shareholders would be so stupid as to let the colony collar their deposits and other business. They would say, " Take over our liabilities to a limited extent, but we will carry on our own deposits in the ordinary way." The Premier added, "You could, not stop them." It was, he said, the old question, that what might seem theoretically sound and all right was in reality impossible. Anyone who examined the position would find that it was next door to impossible for the colony to do what Mr. Ell wanted it to do. The responsibility of taking over £18,000,000 of liabilities was enormous, and he objected to the way in which resolutions were coming in from people all over the colony, who evidently. knew.nothing about it. They might as well say the Government should transfer New Zealand to the centre of America. He bad received these resolutions by the score. ■ M'r. Barclay The bank has assets. The Premier: We cannot control them. Mr. Ell: We have a share in them. The Premier: The shareholders have rights too, and we cannot do anything that is unfair, or that would be a wrong thing to do. • Mr. Ell said something about a banking ring and high rates of interest. The Premier said that if the rates were ■unduly high people could go outside the banks.