RESERVE BANK

New Zealand Herald, Volume LXXIII, Issue 22392, 13 April 1936, Page 9

RESERVE BANK

DOMINION LEGISLATION LONDON PRESS COMMENT (Received April 12, 5.5 p.m.) LONDON. April 11 The Economist, commenting upon the New Zealand Government's nationalisation of the Reserve Bank, says it considers the value of an independent central bank as a disinterested adviser of the Government is a far from negligible fact. New Zealand, in dispensing with this safeguard, makes it the mpre necessary that the Government should follow a wise and consistent policy. The Financial News says it considers that there are few economists or bankers who will not be disquieted by New Zealand's action in turning the bank into a complete machine for the Government's expansionist aims through the capital market. "Printing press inflation," says the paper, whether the Government liked it or not, would be the inevitable sequel. Apparently the less dangerous inflation now facilitated may not cause immediate alarm, but there is no assurance that a future Government will not take reckless advantage of the dangerous devices now ready to hand. Mr. Savage's good intentions may also suffer from sheer lack of grasp of fundamental economic principles. A Government which links an expansionary social assistance programme with a policy of exchange appreciation hardly seems to have a sure grip on realities.

LABOUR GOVERNMENT SUPPORT OF MODERATEB AUSTRALIAN VISITOR'S VIEWS SYDNEY. April 11 Mr. MacArtney Abbott, a member of the Federal Senate, on his return from New Zealand, said he felt confident that there was no cause for alarm with the Labour Party in power in New Zealand, since the party seemed to possess the support of the more moderate elements of the community. Mr. Abbott added that he believed the Dominion's new Parliament contained much good material. He did not think the slight anxiety which had arisen as a result of the Government's taking over the Reserve Bank of New Zealand was justified. Mr. Savage seemed to be alive te the necessity of moderation in virtually all legislative matters.