PROPOSED NEW BANK

Poverty Bay Herald, Volume LIV, Issue 16706, 25 July 1928, Page 7

PROPOSED NEW BANK

GOVERNMENT NEUTRAL MINISTERIAL STATEMENT MORE DETAILS WANTED (Parliamentary Reporter.) WELLINGTON, this day. The Minister of Finance informed the House of Representatives when the London and New Zealand Bank Bill was under consideration that the official attitude will be of ensuring the protection of the public and offering no objection if the necessary safeguards are provided. Mr. J. G. Eliott formally moved the second reading of the Bill and did not discuss it as the next procedure was "to refer the matter to a select committee for inquiry and report. The Leader of the Opposition, Mr. H. E. Holland, asked what was to be the Government's attitude towards the Bill. If it took up an antagonistic attitude any discussion by members would be merely wasted time. f l herofore the House was entitled to know at once what would be the position. The Hon. W. Downie Stewart, Minister of Finance, pointed out that, the Bill was a private one, not sponsored by the Government, and his view was that the- correct time to discuss its merits was on receipt of the Select Committeo’s report. “I have intimated to the member in charge of the Bill my personal view, that if a responsible body of citizens wish, to start a bank,, and if they incorporate in their Bill the ordinary legislative provisions designed for the ‘ protection of those doing business with the bank, and also, of course, satisfy the committee that the capital is behind it and their banking facilities are reasonable, it is not the duty of the Government to obstruct the Bill in any way. A MEMBER’S QUESTIONS Mr. W. A. Veitch expressed the opinion that the Bill ought, to be discussed at once. If it passed in its present form the Government would havo no say in authorising a new bank. When the Colonial Bank Bill was passed the bank’s capital had already been subscribed and the names of promoters known. There was no such information available in connection with the new banking proposal. Mr. Eliott: Are you opposed to this legislation?

Mr. Veitch: I am just expressing my opinion. This measure is not going through without resistance unless the necessary information comes to hand. ’ Half a dozen new banks, he added, would not break up the present monopoly. The only wav of doing so was to widen the banking laws so that any corporation created within the law, and having sufficient capital to safeguard the public interest, should be allowed to compete against the existing banks, as was the case in the United States. i The Hon. A. D. McLeod: It’s a common thing for some hundreds of them to go bankrupt. Mr. Veitch retorted that there was no danger of the banks -going bankrupt, though thousands of their clients had been in that position while the banks continued to make profits. As the Bill gave nu exclusive right to some unknown promoters to start a bank and raise capital, with commission authorised up to £OO,OOO, they were asking for very valuable consideration. Agricultural banking would be preferable to this proposal. . He predicted that the proposed bank would be unable to carry on without becoming associated with the existing banks.

Mr. W. 8. Glenn said that if the Bill were to reach a stage where the backers and promoters could come forward and establish their bona fides then the House would knovv who were behind it. It was most unlikely that the Government would allow a wild cat scheme to go through. Mr. Glenn welcomed the advent of any in-stitution-which would mean extra capital for New Zealand. If this proposed bank .was a genuine concern with proper backing it would get customers quickly enough. At this stage he could see nothing to worry about. The Bill was read a second time and sent to a committee of selection.