FINANCE CONTROL

New Zealand Herald, Volume LXXIII, Issue 22389, 8 April 1936, Page 15

FINANCE CONTROL

BANK GOVERNOR'S fIEW STATEMENT BY MINISTER PROTEST AND CO-OPERATION OTHER POINTS EXPLAINED [BY TELEGRAPH —SPECIAL REPORTER] WELLINGTON. Tuesday The fact that the governor of the Reserve Bank, Mr. Leslie Lefeaux. is not in agreement with the general principles of the Reserve Bank Amendment Bill, but that he is co-operat-ing with the Government in making the measure workable, was revealed by the Minister of Finance. Hon. W. Nash, in his speeches during the final stages of the passage of the hill through the House of Representatives to-day. * "I have had consultations with the. governor of the bank on numerous occasions," Mr. Nash said, "and lie has made his protest concerning some of the proposals in general terinß However, lie has said he will co-operate with the Government in the administration of the bill, and there can be no question about lack of support." Mr. Nash added that he had received a letter from the manager of the Bank of New Zealand, who was also chairman of the Associated Banks, stating that when the bill became law the Government could depend on the banks' assistance in every possible way, even though some of the clauses were not welcomed. Position of Directors The present directors of the Reserve Bank would remain in office for the terms specified in the Act, the Minister continued. The Government would inform the directors or the governor of the bank what it wanted to do and if sound reasons were advanced why it should not he done, then it would not be done. On the other hand, if the Government felt that what it asked was feasible, the directors would be requested to give their co-opera-tion. However, there would be. no coercion. It had been suggested that the bill would constitute a grave danger in the hands of a corrupt Government. That was admitted, said Mr. Nash, but it had to be remembered that a corrupt Government could do anything, whether there was a State bank or not. The present Government was legislating not for corruption, but for integrity. Some of the Opposition speakers, too, had attempted to differentiate between State control and political control. Actually there was no difference. State control implied control by the Government of the day, and therefore the State could be controlled only by a political party. "The whole position is that the credit and currency of New Zealand will be controlled by the Reserve Bank," Mr. Nash said, "and the bank in its turn will be controlled by the Government, but it will not be coercive control. The power in the bill for the suspension of access to sterling is not likely to be exercised except in an emergency. Actually, it is very necessary to have the power to prevent anyone having access to sterling until the Government knows that all its requirements are covered in London. The Government must have complete control of the credits that have been built up by the export of goods from New Zealand." Exchange Held by Trading Banks

The question had been raised as to the Government's intentions regarding London exchange held by the trading banks, the Minister continued. Actually, the Government was not worrying about London balances except those held by the Reserve Bank. Ultimately it would be wise for the Government to control exclusively all sterling exchange that resulted from the sale of New Zealand products overseas. When the Government was in such a position of control, exchange would be made available to trading banks and to others for legitimate purposes. The question had been raised regarding British deposits in New Zealand, Mr. Nash said. If there were any such credits in New Zealand that were required in London they could certainly lie obtained. Anyone legitimately requiring credits for importing goods into New Zealand would be able to obtain them. "I do not think anything said in the debate will lessen confidence in the Dominion," Mi. Nash concluded. "Moreover, the reactions overseas since the principles of the bill have been announced have not been unfavourable."

NAMES OF POISONS PUBLICATION OPPOSED [by telegraph—special reporter] WELLINGTON, Tuesday The danger in the publication of the name of a poison which has caused death was stressed by Mr. 1. H. McC'oinbs (Government —L.vttelton), in giving notice of a question in the House of Representatives. Mr. McCombs said he proposed to ask the Minister of Justice, Hon. H. G. R. Mason, if lie would take steps to prevent the publication, in reports of judicial proceedings, in the newspapers, or in other ways, of the name of a poison which has caused the death of a human being. The publication of the name of a poison used in a recent murder case had been followed by several suicides where the same poison was used.