PARLIAMENT.

Otago Daily Times, Issue 20501, 31 August 1928, Page 10

PARLIAMENT.

YESTERDAY’S PROCEEDINGS.

LEGISLATIVE COUNCIL.

(Peb United Press Association.) WELLINGTON, August 30. MAGISTRATES’ COURTS BILL. The Legislative Council met at 2.30 to-day. The Magistrates’ Courts Bill was reported from the Statutes Revision Committee with minor amendments. CHURCH OF ENGLAND EMPOWERING BILL. The Church ot England Empowering Bill was reported from the Special Committee with amendments. NOXIOUS WEEDS BILL. The Noxious Weeds Bill was reported from the Agricultural and Stock Committee with a trivia] amendment, and put through its final stages and passed. RABBIT NUISANCE BILL. The same committee reported the Rabbit Nuisance Bill without amendments, am. the measure was passed. PROPERTY LAW AMENDMENT BILL.

The Property Law Amendment BUI was read a second time, and referred to the Statutes Revision Committee. FINAL STAGES. The Surveyors Registration Bill, the Surveyors Institute Amendment Bill, and the Law Practitioners Amendment Bill were put through their final stages and passed unamended. A THAMES MEASURE. The Thames Borough Loans Rate Adjustment BUI was read a second time. The Council adjourned at 3.82 p.m. until to-morrow.

HOUSE OF REPRESENTATIVES. LONDON- AND NEW ZEALAND BANK BILL. The House met at 2.30 p.m. The first business taken was consideration of the report of the committee on the London and New Zealand Bank (Limited) Bill. In moving the adoption of Hie report, Mr .1. G. Eliott (Oroua) said he desired t< make it clear that the Bill was not promoted simply for the purpose of giving a ” rake off ” to those men who were promoting the Bill. Those who were behind the movement to establish a new bank were men of independent means. The fact that such nen were connected' with the proposal showed that, in the opinion of responsible business men, farther financial facilities wore warranted in view of the development in recent years of the farming and commercial life of the Dominion. He proposed to quote figures to show how the trade of the Dominion bad grown, *nd that in consequence of this growth an additional bank was justified. The last time the House passed legislation dealing with the establishment of a bank was in the early ’seventies of last centnry, and a good deal had happened since then. The Bill had been referred to a Select Committee, and Lad come back with the approval of the committee, and with the approval ot experts who had given evidence before that committee. The nominal capital was now fixed at £3,000,000. The bank would not open its doors for business -until a sum of £1,000,000 was in its hands. Restrictions had been placed on the bank note issue, such as applied to other banks. The promoters’ fees had been limited, so that at best they would receive 312 fully-paid-r.p shares in the bank, which could not be considered unreasonable. No shares were to be issued at a discount, but at par. Speculation on the part of the promoters iu their shares was fairly Well guarded against. The chairman of the associated banks had given evidence that his association had no objection to a new bank, although the present banking facilities were still su..icient. He'also said that any attempt on the part of a hew bank to cut tie rates would lead to " war.” and would result in the existing banks putting the new bank out of business. Colonel Esson stated that if the bank failed to raise the necessary capital it would hot harm the Dominion, but if it failed after its establishment, it would do harm to the Dominion’s credit. Mr Hayes, Secretary to the Treasury, said there was no objection to a new bank. He considered, however, that failure to oßtain the subscription of £1,000,000 necessary for the granting of the charter might possibly have a detrimental effect on the credit of the Dominion. The chairman of the Sharebrokers' Association expressed the view that there was room for a new bank, and the Solicitor-general had said the bank's regulations would be in accord with the bankiur legislation of * the Dominion. Mr Alexander MTntosh, on ex-banker, thought there was no room in the Dominion for a new bank. On the whole, the evidence was distinctly in favour of the establishment ol a new bank. Mr Eliott proceeded to discuss the growth of the truie of the Dominion between the years 1893 ant 1035. Mr J. Mason (Napier) raised the point of order that the House, having agreed to the second reading, it could not now discuss the principles of the measure but should confine itself to the clauses of the Bill. , _ The Speaker ruled that when the House agreed to the second reading, it did so conditionally, and members were therefore now entitled to discuss the expediency of the Bill, but he asked members to confine themselves to the Bill and not to allow their arguments to wander top fai.

Proceeding, Mr Eliott said that in the last 13 years the trade of the Dominion had expanded by £62,500,000, and that, he thought, fully justified the establishment of an additional bank. Discussing the profits of the banks, he said that during the last eight years the Banks of New Zealand earned £6,500,000 net disclosed profits, and paid ‘ from 13 1-3 to 17J per cent. The National Bank in the same period had paid a uniform dividend of 14 per cent. There was no doubt that the banking business of the Dominion was in the hands of a close corporation, and he did not agree that there was any foundation for the statement that this new bank must link up with the established banks.

Mr M. J. Savage (Auckland West) said the evidence given before the committee had made it clear that there was no competition in banking in Nw Zealand. The promoters had made their bona tides good, and so far as that was concerned the Bill was all right. The only question was whether the new bank would fulfil its mission. The chairman o? the Associated Banks said straight cut that if tile new bank entered the field as a competitor with the existing banks it would be run off. There was uo mistaking what that meant, and a stronger argument in favour of a State bank he had not heard. He did not doubt the sincerity of the promoters, but he did doubt whether they would be able to survive the fight with the existing institutions. There was no competition in banking In New Zealand just now. A few persons had the power to make o r break industries and individuals. He thought. the chairman of the Associated Banks knew what ho was talking about when he hinted at crushing the new He did not think that the new bank would find a great deal of new money for the people, and instead of legislating foi uew private banks the oiilv solution of the problem wa s to in--•st open tK Stale taking a greater part in the Oinking business. He welcomed the new institution because if it did

nothing else it would supply additional evidence that the existing banks were so powerful that, in order to save their shareholders, the new bank had to join in with the other banka. He hoped the Bill would go through, but he did not expect the new bank would help the people who wanted to borrow money, because it would have to fall into line with the other banks, and those banks were not helping the people. Mr W. A. Veitch (Wanganui) said the Bill had been greatly improved by the committee, but what struck him was that there was not one amongst the promoters who had any prior experience in banking. This might not be a detriment, but he agreed with the last speaker that this new bank would not be able to compete with the existing banks. U had been said here were six banks doing business here, but there was In fact only one bank, and after this new bankstarted there would still be only one bank. The only difference the new bank would make would be that it would ieceive a share of the profits arising out of the general banking business. the new bank would not relieve the banking situation. Only the most complete and drastic revision ol oui banking laws would effect that. . , ~., • Mr D. Buddo (Ivaiapoi) thought the promotion of the Bill wasancvidcncc that another bank was justified. What was not good security to one bank was quite good security to another, hence the advantage of having an active competitive svstem of banking. There should be no lack of business for another bank. , , , Mr W. D. Lysnar (Gisborne) thought that, in view of the necessity for stability in finance, some form of combination must be expected amongst the banks. He did not think that combination had been greatly abused. 1 here might be exceptions, but generally he thought the banks had served the country very well. He would, however, support the Bill, and he hoped the new bank would be of service to the people. Mr F. F. Hockly (Rotorua) recommended the frankness with which the promoters had put their case befoie the committee. He thought the capital of the new- bank was adequate for its purposes. He welcomed the new bank and wished it every success. The Minister of Finance (Mr W. Downie Stewart) said that when first approached on the subject he had said he saw- no objection to a new- bank being started. Much depended on what was called banking business, but, looked at broadly, the banks were not the only institutions doing banking. It was, therefore, wrong to say there w-as no competition. Competition centred mainly around the question of security. Whether another bank was wanted or not could only be tested by experience, and could not be settled by the House. The trade figures quoted by Mr Eliott must be regarded with caution, because they were to some extent figures of years of inflation. The dividends were also not quite a safe guide, because these were partly due to interest derived from reserves, which all banks must have, and were due entirely to earnings on the w-orking capital of the bank. The proposal to start a State Bank in Now Zealand should be approached with caution, because from all ho could see, hear and read, banking was not going to be as popular in the near future as it was now. Returning to the question of competition, he said he only wished that the companies which were doing a class of banking business gave him as little trouble as the banks did. He could only say he would support the Bill. The Leader of the Opposition (Mr H. E. Holland) said he would like to know whether the new bank would lend money to settlers at a lower rate of interest than the associated banks, and what the new bank would do to meet the offensive which the chairman of the associated banks was said to have threatened against it. A million of capital would not carry them very far, and he wanted to know how long it was thought this capital would carry the bank on, and what difference it was thought it would, make to the people. . The only justification for the new bank starting in New Zealand would be the benefit it would confer on the people. Then he wanted to know what guarantee there was that the new bank would not join the existing combine. They had been told that the associated banks would bludgeon the new bank out ol! existence, and he thought that Parliament should take steps to prevent that sort of thing. If the bank would set out to help the rural and secondary industries of the Dominion he did not' think there could be much objection to the Bill. Mr J. Mason (Napier), considered a million of capital would be sufficient w-ith which to start the business of the bank. As the business increased its capital could be increased even beyond the three millions nominated. He did not take the statement of policy towards the new bank, made by the chairman of the associated banks", as a threat. The chairman may have meant that if the new bank began to cut rates the other banks must do likewise as a business proposition, and the weakest bank must go to the wall. He thought the Bill was one that should be passed by the House.

Mr J. Horn (Wakatipu) and Mr G. W. Forbes (Hurunui) gave general support to the Bill. Mr Eliott, in reply, said he was not responsible for the policy of the bank. Whether it joined up with other banks, whether it traded exclusively in New Zealand or whether it lent money largely on rural securities were matters entirely for the directors who managed the bank. So far as its policy towards rural securities was concerned, he could only say the business of the bank was to provide capital for carrying on the trade and commerce of the country, and for that reason it must keep its capital as liquid as possible. The report was agreed to. IMPREST SUPPLY BILL (No. 3). An Imprest Supply Bill (No. 3) was introduced by Governor-General’s Message.

Mr J. M‘Combs (Lytteltou) said he proposed to move the following amendment to the motion that the House go into Committee of Supply: “That in view of the facts (1) that the cost of living bonuses granted to public servants in 1920 were based on an increase in the cost of living of 02 per cent.; (2) that the cost of living is now 02 per cent, above the pre-war level, whereas the average increase in the salaries of public servants is only 3,1 per cent.: and (3) that the cost of living has been stabilised, and has not varied more than two points since 1924, it therefore be a recommendation to the Government that the salaries of public servants he restored to the 1020 standard.” In moving the amendment, ho maintained that there was an agreement between the Government and the public servants that the bonuses were to be increased as the cost of living rose, hut the agreement had never been carried out by the Government; consequently the increases in salaries had not been commensurate with the increase in the cost of living. What they were asking for note was not a restoration of the “cuts,” but that salaries be restored to the 1920 standard. This ruled out those whose salaries had been increased under departmental classification. The amendment was seconded by Mr T. N. Bartram (Grey Lynn). He' said tiie Government had recently raised the wages of policemen, and he wanted it to go on and increase the salaries of all the public servants. It was desired that the Government should not grow weary in well-doing. It was a fair proposition to ask that the Government should raise the wages of the public servants, so that they could live at a standard higher than prison faro, and ;n that way rcsto r e to them payments (lint were taken ;rom them by force in 1922. Mr W. D. Lysnar (Gisborne) said the

subject of civil servants’ salary “ cuts ” was a subject now worn threadbare, and the civil servants might very w-ell say, “ Spare us from our friends.” The civil servants knew perfectly well that the Dominion in 1920-22 was passing through a period of great trial. The public salaries then amounted to £9,000,000. There was a “ cut ” made of £BOO,OOO, and, as compared with the total sum, that was only a small proportion. Some of the civil servants had had their salaries raised, but members of the House had also suffered “cuts,” which had not been restored.

Mr G. W. Forbes (Hurumii) said he would support the amendment. It was distinctly understood when the “ cuts ” were made that when the- position of the Dominion improved the “ cuts ” would be restored. The speeches of Ministers who said we were “ round t lie corner ” had led everyone to believe t hat prosperity was restored, and, that being so, the Government should cany out its undertaking to the public servants. The Minister of Lands (Mr A. D. M'Lcod) said the speech of the member for Hurunui served to disclose him as a political time-server. Throughout the country during the past few months he had said that the position of the coilntry was hopeless, but now, for political purposes, he pretended to believe we had “ turned the corner,” and for that reason declared that the Government should increase the salaries of the public servants. He (Mr M’Leod) agreed that when we returned to permanent prosperity the salaries might be increased, but he maintained that since the war period wages nad increased at a faster ratio than had the value of the Dominion’s products. Mr R. M'Kecn (Wellington South) ..rgued that iu the fact of the increased value of wool and other products an increase of the public servants’ salaries was justified. The public servant today was just ns efficient as he was in 1020, and public feeling was warmly in favour of such an increase. The public servants had been shabbily treated by the. Government, and justice should be done to them. The Minister of Finance (Mr W. Downie Stewart) said there were several matters that had not been put before the House in the way they should be put to enable the House to get a proper view of them. It had been said the' surplus of the Post Office /as £1,100,000, and that out of this sum there was plenty of money to pay Increases to the public servants. The fact was that that surplus was computed before the departmental charges had been met, and when those charges had been met the surplus was only £20,000. Reference had been made to some agreement which the Government had not kept, but no mention was made of the fact that under that agreement reductions might have boon made but were not made. Mr Stewart added that in the case of 10,456 officers in the. Public Service on April 1. 1914, the average salary was nearly £159, but on April 1, 1928, the average was £243 10s, the average increase being £SO. If the amendment were agreed to, it would mean that many public servants would have to suffer a reduction instead of obtaining an increase. To do what the Labour Party desired would mean increased taxation, and ho did not think the public servants, or anyone else, would thank them for that.

Mr D. G. Sullivan (Avon) said the Minister had endeavoured to show wages had kept pace with the increased cost of living, but his figures wore all wrong, for instead of the increase in tie' cost of living being 42 per ait. in 5.922 it was actually 5!) per cent. Tin; - error was due to his use of only portion of the figures relating to the cost of living instead of the whole of the groups. Whatever intention the Minister might have had, his .figures were calculated gravely to mislead the House. If the increases in salaries already given were sufficient to cover an increase of 42 per cent, in the cost of living, obviously they were not sufficient to cover an increase of 59 per cent. Mr V. H. Potter (Roskill) said he amendment was brought forward purely as a piece of political propaganda, and was easily understood. At 10.30 p.m. a division on the amendment was taken, when the voting was: For the amendment 20, against the amendment 43. The Nationalists and the Labour Party comprised the minority. Mr W. A. Veitch (Wanganui), continuing the debate on the main question, said there seemed to be money for anything and everything except wages. Ho wished to discuss the position with regard to the East Coast railway. For this railway there were two proposed routes, and a conflict had arisen iu Gisborne as to which should be selected. The inland route was still under survey, and- while that was going on a deputation had visited Wellington and urged the selection of the coastal route. He had received a telegram from several reputable citizens r.f Gisborne stating that at a political meeting held in that town a member of the deputation bad stated more than once that the Prime Minister had said he would confirm the coastal roqte within six weeks if the delegation would support the Reform Party. The Prime Minister asked for the name of the man making, tha’ statement, but Mr Veitch refused to give it. Following some crossfire, the Prime Minister then emphatically declared that the whole statement was absolutely untrue. The Leader of the Opposition (Mr H. E. Holland) raised the question of the treatment of a Chinaman named Wong See at Samoa while a prisoner in gaol. The prisoner was under sentence ot death, but became ill, and while handcuffed and chained to the floor was subsequently found strangled with pieces of his torn blanket. He (Mr Holland) was not making charges, but was asking for the most complete inquiry into the whole of the circumstances attending tills man’s death. Another, Chinaman, also under sentence of death, was put into the witness box to evidence against another Chinaman. This proceeding, be thought, was most improper, because it was impossible to say hou the distressed mind of a man under sentence of death might bo affected, oi how his evidence might be coloured. The case of Chu Fook, who was alleged to have been ill-treated in prison, was also referred to, as was a letter written by a military policeman in Samoa, suggesting that what the Samoans needed was the “ heel.” That letter should have been contradicted and repudiated by the Government, and he wanted to know what action the Government had taken in connection with these cases or what action they proposed to take. Tiie Minister of Public Works (Mr K. S. Williams) said, in reply to Mr Veitch, that a decision in connection with the east coast railway was awaiting a survey now in progress. Whether that decision would be made in a week or in six weeks he could not say. With regard to the allegation that the Prime Minister had made a promise, lie emphatically denied it, and read a telegram from Gisborne stating that no guarantee whatever had been given.

The Prime Minister defended the administration of General Richardson in Samoa. He said that no man had higher ideals or a more intense desire for the good of the Samoans. So far as the statements made by the Leader of the Opposition were concerned lie (the speaker) had asked for the files, and would go into the position. With regard to the accusations made by Mr Vcitch lie desired to say he had the notes of the interview and the statements regarding his promise were completely incorrect. The Government was doing' its best to secure ample supplies of phosphates for Xew Zealand, but he could not disclose all that it was doing. He could say, however, that there would be no shortage of supplies from Ocean and Nauru Islands.

The debate then concluded, and a Bill appropriating £2,6(18,000 was? put through all its stages, and (he House rose at 0.00 a.in.