"LEAVE WELL ALONE"

Poverty Bay Herald, Volume LV, Issue 17029, 14 August 1929, Page 7

"LEAVE WELL ALONE"

HtEMIER AND STATE BANK LABOR BILL DISCUSSED i PRESENT INSTITUTION PRAISED. (Parliamentary Reporter) WELLINGTON, this day.. That the country would be wise in leaving well alone was the opinion ex- .■ pressed by the Prime Minister, when discussing the question of a State bank in the house yesterday. Sir Joseph Waid said that at one time he had been favorably impressed with the idea o£ a State bank, but that was before the Bank oi New Zealand was assisted by the Government, and to-day he was of opinion that a State bank could not be operated side by side with the Bank of New Zealand. The question arose on the debate on the first reading of the Bank of New Zealand Bill, a measure introduced by Mr. F. Langstone, Waimariuo. The bill was described by Mr. Langstone as a measure which would, by the alteration of a few words and clauses in the existing Act, make the Bank of New Zealand to all intents and purposes a State bank, controlled absolutely toy the people of New Zealand. A great mistake had been made in not making the Bank of New Zealand a State bank in 1894, When the country came to its aid. Although the bank was ready enough to accept assistance when in difficulties, it gave short shift to those who found themselves in trouble and appealed to it for help. HISTORY RECALLED. Sir Joseph Ward said he did not thoroughly understand the views expressed by Mr. Langstone. However, as Finance Minister, he saw that it was his duty to state how the matter Was regarded by the Government. At the period when the State came,to tho assistance of the Bank of New Zealand that institution was admittedly in difficulties. It had 37,000 clients and a great number of depositors to whom a responsibility was owing. Had the bank been converted into a State bank at that time it could only have been done by patting the Bank of New Zealand into liquidation and locking up the assets. That course was thoroughly considered at the time. Mr. Langstone: The bank could have been bought for a song. Sir Joseph Ward: No, it could not have been done without disaster to the people concerned. The rescuing of the Bank of New Zealand put the country ahead by years, and had the bank not been helped practically everyone concerned with it would have lost very heavily. However, he did want to make ii clear that the bank to-day had a majority of Government directors. Mr. Langstone: With no power? Sir Joseph: Yes, they have power, and there is the Government auditors. This bank carries on the business of the country, and does it well. It is an institution that deserves the respect of the people of this country. CHANGE IMPOSSIBLE. "I may say that when I took charge last year as Minister of Finance the Bank of New Zealand offered to come to the assistance of the country, through the Government, by making money available for advances to settlers and other purposes. Fortunately, I did not need to avail myself of that offer, but it was satisfactory to know that the bank was ready with assistance in case of emergency. "In my. judgment, to attempt, to change the Bank of New Zealand into 4 State bank is impossible," added Sir Joseph. "The' responsibility to shareholders has to be recognised, and except by paying the full amount of interest i to shareholders it could not be done. I may say that I am not prepared to adnit thai the amount might be more than we would be prepared to pay. As it exists at present, the Bank of New Zealand is a semi-State bank. It is as nearly a State bank as you could have it, and we would be Well advised to leave well alone. As regards a State bank, at one time I was favorable to the proposal, but that was before the Bank of New Zealand was granted assistance. In my opinion we could not rrate a State bank side toy side with Bank of New Zealand." Mr. Langstone's bill was read a first time, and is unlikely to come up again this session.