THE RESERVE BANK

Otago Daily Times, Issue 23568, 3 August 1938, Page 6

THE RESERVE BANK

TO THE EUITOB Sir,—ln his letter of July 27 "A Worker" says he did not make a definite statement that the Government had borrowed £7,000,000 from the Reserve Bank for housing. Here is the statement from his letter, which appeared on July 14: "The Government has millions flowing into the Consolidated Fund, and also has the Reserve Bank to call on, as it has done to the tune of £7,000,000 paper money to finance its building scheme, etc." He apparently does not know the meaning of the words he uses. I accept his explanation, however, that he did not mean to saj that the Government had borrowed £7,000,000 for housing. What did he mean? The following questions put by "A Worker " expose his utter ignorance of public finance and of the law governing the Reserve Bank transactions with the Government. " Will Mr Silverstone please inform me how many notes have been issued by the Reserve Bank on behalf of the Government in the form of a Joan on which the Government has paid no interest, or how much money has been transferred from the Reserve Bank to the various Government accounts with the Bank of New Zealand, to replenish those accounts? " "A Worker " has packed mo'-e nonsense into the above sentence than he is aware of. He does not know that all the Reserve Bank transactions with the Government are reported weekly and published in the press. He is also blissfully unaware that the Reserve Bank, not the Bank of New Zealand, is the Government banker. "A Worker" says a schoolboy will answer the questions I put to him. I agree with him, but it was to him and not a schoolboy I put the questions Surely I did not overestimate "A Workers " knowledge of public finance and banking.—l am. etc., August 1. M. Silverstone.