CENTRAL BANKS

New Zealand Herald, Volume 82, Issue 25347, 31 October 1945, Page 7

CENTRAL BANKS

UNITED EMPIRE POLICY MEETING NEW NEEDS BRITISH BILL'S PROGRESS LONDON, Oct. 29 The Chancellor of the Exchequer, Dr Hugh Dalton, today moved the second reading of the Bank of England Bill in the House of Commons. "Let us have a united Empire policy regarding the organisation of central banks," said Dr Dalton. "The bill ensures the smooth and efficient growth of our financial and banking system to meet the needs of the future. The Government has an emphatic mandate for its five-year plan, and this w bil 1 is one of its foundations. We do not intend any day-to-day Government interference through the Treasury with the ordinary work of the bank." Terms to Shareholders The Chancellor recalled the provisipn under which the bank's shareholders will receive 3 per cent Government stock to ensure an identical income. To have given less favourable terms would have been unfair to the stockholders, of whom there were 17,000. "We claim that this bill will bring [the Old Country into line with the young and vigorous democratic British I communities beyond the seas, which is [as it should be in this and other matters to he unfolded," he said. "This bill I brings the law into relation with the ! facts. It brings an antiquated outmoded institution into a form which fits the practical realities of the age. "In one aspect the bill only legalises the actual situation. Relations between the Bank of England and the Treasury have long been close and confidential, and even intimate, and must so continue, but the Government feels that the time lias come when these two parties—the Old Man of the Treasury and the Old Lady of Thread needle Street — should be legally married. We should not like to think there is any danger of their living in sin."

Instructions to Other Banks Referring to the proposed power under which the Bank of England will he enabled to issue instructions to other hanks. Dr Dalton said the whole of the deliberately wide powers conferred on tin? Bank of England, with the authority of the Treasury behind it, were essential to ensure the successful working of the Government's five-year nlan. The Government must ensure that it had an integrated coherent system of financial institutions. "This Government plans full employment and full production for an expansive economy for increased trade at home and abroad." he said. "If all this is to he done we must hare the Treasury, the central hank and the clearing banks pulling together. We cannot afford even the possibility of their pulling different wayp. That would frustrate the whole pin*." The banks had an essential part to play.awl there was a worthy place awaiting them. There woidd be full facilities for consultation and co-operative effort.

Private Affairs of Clients Dr Dalton said there was apprehension that the hill empowered the Bank of England to compel the clearing banks to reveal through the Bank of England to the Treasury the private affairs of their clients and depositors. "I can say immediately that this apprehension is completely unfounded." he said. "The Government has no intention of using this provision this way. If there is a case of evasion or other illegal action we have other powers and other statutes which are sufficient. This bill does not aim at forcing the disclosure of any confidential, private information."

The former Chancellor of the Exchequer, Sir John Anderson, describing the bill as unfortunate and quite unnecessary, said relationship Moulded by long tradition was being replaced by a formal enactment in response to some ideological urge. Not An Ordinary Bank The Bank of England was not an ordinary bank. It was a unique institution with an international status not shared by any other central hank. It was the chosen instrument for the management of sterling currency. Sterling was not really Britain's affair. Replying. Dr Dalton said that after the second reading, the bill would go to a Select Committee for detailed examination. He added that what the State was obtaining by taking over the Bank of England was substantially greater than the total sum paid in compensation. This was what he meant when be said earlier that it was a cood bargain for the State.

The hill passed its second reading bv 248 votes to 153.

PARTIAL CENSORSHIP BULGARIAN DECISION ALLIED ARMY ACTIVITIES (Seed. 6.30 p.m.) LONDON. Oct, 30 M. Rayonov, secretary-general of the Bulgarian Ministry of Information, lias personally requested British and American correspondents when reporting matters concerning the Allied armies or inter-Allied relations to submit messages before despatch from Bulgaria to the Foreign Minister, M. Stainov, says the Daily Telegraph's Sofia correspondent. M. Rayonov added that correspondents would continue to have full freedom from censorship when reporting Bulgarian internal affairs and criticism would be welcomed. The correspondent says it is believed that the partial censorship is due to the transmission abroad of reports of the Red Army's movements toward the Turkish frontier. M. Stainov, as president of the commission appointed to carry out the armistice terms, is responsible to the Allied Control Commission for seeing that nothing is published contrary to the interests of the Allies and their armies. The control commission has n Russian president, General Birvnzov. CONTROL IN BURMA RANGOON DISCUSSIONS FAIL (Bord. 0.30 p.m.) LONDON, Oct. 30 The discussions of the Governor of Burma, Sir Reginald Dorman-Smith, with leaders of the Burma Patriotic Front have broken down, says the Rangoon correspondent of the Times. The correspondent adds that although the Governor can still hope to form a reasonably representative Executive Council, it is fairly certain that the younger and more extreme members of the party will not be included. A later message says an official statement has been issued in Rangoon on the deadlock in the discussions between the Governor and the organisation known as the Anti-Fascist People's Freedom League. The statement regrets that the demands made by the league have made it impossible for the Governor to invite any members of it to serve on his Council as representatives of the league.

LABOUR AND STRIKES "THE WORKERS' CAPITAL" CRccd. 5.35 p.m.) NEW YORK, Oct. 29 The president of the American Federation of Labour, Mr William Green, in a speech at Cambridge, Massachusetts, said: "Labour now seeks a just share of those profits which it helped to create and which industry can well afford. Labour believes in the peaceful and orderly process of collective bargaining, and is not. promoting strikes, but will strike if compelled. We are now taking the strike weapon from behind the door. As money is the management's capital, strikes are the workers' capital. Labour now demands wage increases which were denied during the war."