THE RESERVE BANK

New Zealand Herald, Volume LXXVI, Issue 23505, 16 November 1939, Page 12

THE RESERVE BANK

QUESTION OF CONTROL NEED FOR REFORM URGED COMMERCE CHAMBERS' VIEW [BY TELEGRAPH —PRESS ASSOCIATION] WELLINGTON, Wednesday Control of the Reserve Bank was discussed to-day by the conference of the Associated Chambers of Commerce of New Zealand, which urged tlic necessity of increasing confidence in the monetary management and financial measures which the present national situation required. A Dunedin remit asked the conference to express tho opinion that the monetary system of the country must be restored to a sound basis and that to this end tlx? war should be waged as far as possible out of national income, and tho Reserve Bank should havo restored to it its proper function. Several speakers thought the first clause dangerous, and it was eliminated, whereupon the Dunedin delegation withdrew tho rest of the remit.

Mr. R. V. White (Canterbury) moved the following remit: "That, whereas politically-directed control of the Reserve Bank during the last few years has been a potent factor in bringing the country's finances into an unsound position, this conference enters a most emphatic protest at the recent amendments to the Reserve Bank Act, which subject the bank to direct political control, and urgently represents to the Government that the hoard of directors of the bank be brought to full strength by the appointment of qualified men of sound experience, and that full opportunity be given to such board to carry out the functions of the bank as defined in tho original Act, free from political interference, thereby increasing confidenco in the monetary management and financial measures which the necessities of the present national situation require." "The remit is first of all a condemnation of the present state of the Reserve Bank," Mr. White said. "The present situation is so serious and the need for reform so urgent that it seems that this demand should he mado with all possible emphasis. If we must have a Reserve Bank, which some of us doubt, it must be controlled by men who will have regard always to financial safety rath?r than to political expediency." The remit was carried.