RESERVE BANK

Otago Daily Times, Issue 23940, 16 October 1939, Page 5

RESERVE BANK

GOVERNMENT’S POWERS INADEQUATE EXPLANATION CLEAR STATEMENT SOUGHT (Per United Press Association! WELLINGTON. Oct. 14. i The following letter was sent earlier in the week by the Associated Cham : bers of Commerce t 6 the Minister of Finance, Mr Nash:— “ The production by the Government of the Reserve Bank Amendment Bill, the nature of the provisions of the measure, the inadequate second readin? explanation of the intention? of the Government concerning the powers sought, and the haste with which the Bill was put through all stages, have all caused growing concern among the commercial community of New Zealand. The reaction of the Associated Chambers to the political control of banking and monetary policy was not, and is not. by any means favourable, but we made no protest against the Bill on its appearance, pending _ your giving an explanation at the point;of, the second reading as to the policy the Government proposed to pursue in the exercise of the powers sought under the Bill in order that we could view the Bill in the light of that explanation. “Not only was there no interval allowed after the second reading explanation fot the measure to be weighed by the public (the Bill being put through all stages during the night), but that explanation, we respectfully submit, left many major questions completely obscure. We would have thought the' objective of concluding the parliamentary session of last week-end of the smallest importance compared with the need for careful public consideration of the extensive and dangerous changes to the reserve banking system brought about by the Bill. “ That matter apart, however, since the measure has now been dealt with, what still remains of current concern is the fact that fears engendered by the Bill because of its inflationary possibilities have not been dispersed, but rather have increased owing to the inadequacy of the explanations of the Government’s policy given to date on behalf of the Bill and its powers. “Will the Government at this stage allay the deep apprehension which has arisen throughout the country by giving more explicit explanations on suchimportant questions as—- “ 1. Precisely how funds for war purposes over and above those forthcoming from revenue are to be provided. “2. To what extent it is considered by the Government that the Reserve Bank credit can he used without inflating the currency. 3. What is the nature of the requests that were made by the Government to the Reserve Bank but not met by the bank, which constitute one of the reasons for the promotion of the Bill? “4. In short, how are the extensive powers which have been taken to-be applied, if not over the whole period of duration, of which the Government cannot know, then at least for that immediate short-term period which the Government must . have fully estimated already in relation to the augmentation of war finance through the powers of the Reserve Bank Amendment Bill? “As this is a matter of public concern, we propose handing a copy of this letter to the press for publication, and we hope the questions raised herein will be dealt with for the information of the public.