RESERVE BANK

New Zealand Herald, Volume LXXVI, Issue 23470, 6 October 1939, Page 9

RESERVE BANK

CONTROL BY STATE COMPLETE POWER REVALUATION OF GOLD ANY PROFIT TO CROWN ATTITUDE OF GOVERXOIt [BY TELEORAPTT —SPECIAL REPORTER] "WELLINGTON, Friday Mnrnine Complete control of the Reserve Bank is placed in the hands of the Government by the Reserve Bank Amendment Bill, which was introduced in the House of Representatives early this morning. The bill was read a first time and will be discussed when the House resumes later to-day. The principal clause in the bill reads as follows: —"In the exercise of their powers and functions under tho principal Act tho governor and the board of directors shall have regard to any representations that may be made by tho Minister of Finance in respect of any function or business of the Reservo Bank, and shall give effect to any decision of tho Government in relation thereto conveyed to the governor in writing by the Minister of Finance. Suspending Minimum Reserve There is amendment to the provision in the original Act relating to the statutory reserve. This empowers the Minister by notice published in the Gazette to suspend either absolutely or subject to such conditions as he thinks fit the minimum reserve of 25 per cent. Power is given for the revaluation of the gold coin and bullion held by the bank on tho basis of the market value of fine gold and for the transfer to a special reserve account of any profit obtained in this way. This profit is to be held on behalf of the Crown and dealt with in such a manner as the Minister may determine. Question. to Minister When the bill was introduced the Leader of the Opposition, the Hon. A. Hamilton, said there were evidently some far-reaching changes proposed. He asked whether the Minister had received the concurrence of the Governor or the hoard or whether he had gone over their heads. "The bill went,down to the Reserve Bank a week ago." replied the Minister of Finance, the Hon. \\ . Nash, "but it would be wrong to say that the Governor acquiesces in its provisions. I intend during the second reading stage to set out the reasons for the bill.