RESERVE BANK PLAN

New Zealand Herald, Volume LXX, Issue 21616, 7 October 1933, Page 12

RESERVE BANK PLAN

CHANGES IN DIRECTORATE POSITION OF THE STATE PROBABLE ALTERATIONS [BY TELEGRAPH —SPECIAL REPORTER] WELLINGTON, Friday A more definite indication was given to-day regarding changes proposed in the directorate of the Central Bcservc Hank, which will bo the subject of legislation this session. It is understood the directorate will probably bo increased to nine, compared with seven as provided for in the original draft of the bill, and that five, or possibly six, of the directors will always be Government nominees, Tho first draft of the bill provided for tho appointment of a governor, deputy-governor and five other members of tho board of directors by the Gov-ernor-Goneral-in-Council. In tho first instance the governor and deputy-gov-ernor were each to hold office for seven years. Thereafter they were to be electod at the general meeting of shareholders for seven years, but it was provided that tho election should be approved by tho Governor-General-in-Council. The other five members of the board were to retire in rotation and to bo subject to re-election by shareholders for periods of five ypars. The purpose of the bank has been succintly defined as being to give external defence and internal adjustment in the monetary policy. Since the bill was first drafted three courses have been considered for the management of the, bank —that it should bo directed by the State, that it should bo directed by the shareholders, or that a combination of two systems should be adopted. It is believed that the lait-named course will be adopted, but that the State will have a slightly predominant voice by being entitled to appoint a majority of directors. This will involve the redrafting of an important section of the bill. Tho original capital of the bank, namely, £500,000, will be offered for subscription in 100,000 shares of £5 each. In view of the fact that the State is to appoint five or six members of the board and tho shareholders four or three, it is thought possible cither that the number of shares to be made available to the publip may be less than was originally intended, or that the capital of the bank may be increased. However, it is in the discretion of tho Minister of Finance to determine the manner of allocation and whatever amount is made available to the public it is anticipated an effort will be mado to spread private shareholding interests as widely as possible.