CENTRAL RESERVE BANK

New Zealand Herald, Volume LXX, Issue 21617, 9 October 1933, Page 12

CENTRAL RESERVE BANK

bir, —.Mr. Jtiislop rails in his attempt to show why we as a community should assign to a public company the complete control of our monetary system for 25 years. Surely Mr. Hislop realises that for a small group of men to have a monopoly of our distributive system automatically places them in complete control of all we as a community produce and consume. That such proposals should be seriously put forward by those in authority goes to prove that as far as our financial system is concerned, to have not made any progress whatever since the early days when private traders issued their own metal tobeas. Apparently, the opinion is still held officially that a private company should have the monopoly of the King's currency. Mr. Hislop says, "while gold may be necessary as an international balancer, it really has no true relationship to the internal note issue." If this statement is correct, and since our note issue bears 110 relationship to the goods produced by the community, to what, then is our note issue related? He further says: "Practically every country in the world has a better note issue than New Zealand." This statement flatly contradicts Mr. Coat-es, who, when speaking in the House early this year on our banking system, said: "I should like to -know where there is a better system than that which we have in New Zealand." Both Mr. Hislop and Mr. Coates cannot be right. C. B. L'omeb.

Sir, —)Vhen one considers the Reserve Bank proposal, now under consideration by our Government, one is struck forcibly by the marked similarity ill the course of events, in this direction, hero and in America. In 1911, in America, the Aldrich Bill was to give tho Federal Reserve Board absolute control over everything—it did not go through. Here, in New Zealand, we had a (similar bill, last session, which has not gone through. In 1913, in America, a modified version of the original bill, providing for a board of seven, to 1# appointed by the President, was passed. .Subsequently, Sir Cecil Spring-Ritt-Britain's Ambassador to the United States, says in his memoirs: "Since Morgan's death, the bankers are supremo and they have captured the Treasury Department by the simple expedient of financing the bills of the Secretary of the Treasury. . . . the Government itself is rather uneasy." The great American public are to-day utterly disillusioned about their central banking system. There are many authorities in support of this assertion. The chairman of the Bank of New Zealand seems to lie of opinion that the Reserve Bank is being set up at the dictation of London financiers. Mr. H' s ' lop has proved (this up to the hilt in the recommendations he quoted. I say, wittiout fear of contradiction, that those who deprecate the idea of a concerted move to perfect the control over international finance now existing are not seized of the facts. Do these peop' a realise that the U.S.A. Federal -K®" serve Board has an adviser in the Ban of England, one Dr. Sprague? In r ?P'to one of Mr. Hislop's points, m'gh not one quite reasonably suppose tna even Sir Henry Buckleton might be expec tod to have had just as much, experience of New Zealand's monetary needs as any of the international nnanciers or institutions detailed bv M • Hislop? Our Minister of Finance, on JW own showing, hopes to retain control y the State in conjunction with the■ wor 1 • ing of the proposed Reserve Bank, can only warn the public that this C 8 * not be effected by merely securing _ certain number of Government- P} pointed directors. By the Act of W session, the governor of the I^ ser Bank was to have tremendous, P ' the powers of the directors being •, restricted. Has the Minister overlooked the fact that the majority of the air tors of the Bank of New Zealand are already appointed by the Goyernme •. Here is an institution that has gr , with tho country and provides a • and proved mechanism. If we must * a Reserve Bank or a State bank, is the opportunity to establish the minimum of change cllis ■ ance. It seems remarkable that tw Minister is going to take away G ment business from the JJ.iuk Zealand when tho State has an t moils sum of money invested institution, and that the Minis to give £I,OOO 000 of the natgo. money to the Reservo Bank, *on free, and non-recoverable excep winding-up. Do the re {6) the direct loss of revenue to tne as a result of establishing pgf Reserve Bank. Tvill be annum? Do we need this aS ked Has anybody in the land for it, or does anybody m JNcw eren f hold that any public benefit . uate ?. * * > V'