BANKING AND FINANCE.

New Zealand Herald, Volume LXVI, Issue 20405, 6 November 1929, Page 11

BANKING AND FINANCE.

INQUIRY BY EXPERTS.

COMMITTEE IN BRITAIN.

OFFICIAL ANNOUNCEMENT.

By Telegraph—Press Association —Copyright. (Received November 5, 6,25 p.m.) LONDON, Nov. 4. In tho House of Commons to-day the Chancellor of tho Exchequer, Mr. Philip Snowdcn, announced the appointment of a committee to inquire into banking, finance and credit, having regard to the internal and international factors which govern their operation. Tho committee is to make recommendations calculated to enable these agents to promote tho development of trade and commerce. Tho members of the committee are:— Mr. If. P. MacMilian, K.C., formerly Lord Advocate of Scotland (chairman); Sir Thomas Allen ; Mr. Ernest Bevin, of tho Transport and General Workers' Union; Lord Bradbury, principal British representative on the Reparation Commission ; Mr. P. 11. Brand, a director of Lloyd's Bank; Professor T. E. G. Gregory, professor of banking, University of London; Mr. J. M. Keynes, editor of the Economic Journal; Mr. Cecil Lubbock, a director of the Bank of England; Mr. Reginald McKenna, chairman of the Midland Bank; Mr. Lennox B. Lee; Mr. J. T. Newbold, formerly a Communist, now a Labour research worker; Sir Walter Paine, president of the Sunderland Chamber of Commerce; Mr. J. F. Taylor and Mr. A. A. G. Tulloek.

The scope of tho proposed inquiry was outlined by Mr. Snowden in his address (o tho Labour Tarty Conference at Brighton last month. Ho referred briefly to the possibility of international control of monetary affairs. " There must be something wrong and something which needs attention when an orgy of speculation in a country 3000 miles away can dislocate the financial system here and inflict grave suffering upon the workers in practically every country in the world," ho said. " That is a matter to which our serious attention must be directed. Wp must try to see whether it is possible to prevent such disastrous things, and whether it is possible for human wit and human knowledge to devise a system where finance will be the handmaiden, the servant of industry, and not its,master. I doubt if anything very effective can bo done except by international cooperation, and I am hopeful that the International Bank which is to be sot up under the Young Plan—and a committee is at the moment engaged in drafting its constitution and statutes —will be able to carry out what was intended in the Genoa Resolution, to devise international cooperation for the purpose of economising the use of gold and some machinery for preventing the unnecessary transhipment of gold. I hope it will be able to fulfil that function.

" But we cannfct wait for that, and we must see if anything can be done within our own control; we must see whether our present methods of credit are the best, whether they are serving the interests of industry as well as possible, or whether some better means can be devised. After all, that is the paramount consideration—the relation of industry and finance. I think it is necessary to have a full inquiry into these matters. There is no use going on airing our own theoretical views; we shall never arrive anywhere by that means. If it is possible to get authoritative knowledge, tnen we ought to get it. There is a large amount of public support of such an inquiry: industrialists, many financiers, bankers, economists, Labour have all asked that such an inquiry should be set up. " In granting this inquiry, I want to say that it does not arise out of rece,nt events. It does not arise out of tho increase in the bank rate a week ago. It has no connection with certain sensational happening;; which have recently taken place in thte Stock Exchange. This was one of tho first matters to which I directed my attention when I took office, and it appears not to have been noticed that in July last I gave an answer in tho House of Commons that the setting up of such a committee was then under my consideration. My absence from the country and the holiday season have prevented me from bringing the constitution of that committee to a _ conclusion. " When the constitution of the committee is announced, I am sure that it will command public confidence. The committee -will have wide terms of reference, and it will be able to investigate all aspects of banking, financial and credit policy, particularly to find out what are the effects of the'present policy upon industry and to put forward suggestions for improving these relations. Tho setting up of this committee implies no reflection whatever upon British banking and financial institutions. Whatever improvement may be possible in their methods and constitution, tho fact remains that these institutions are pre-eminent in tho world for soundness and for probitv. British credit to-day is the best credit in the world, and tho British market is the safest market for investments of those who want a genuine investment and do not crave after speculative profits."