CENTRAL BANK PLAN

Poverty Bay Herald, Volume LX, Issue 18192, 13 September 1933, Page 11

CENTRAL BANK PLAN

* PROPOSAL CONDEMNED

BANKER’S CRITICISM

MINISTER UNDER FIRE (Per Press Association.) „ WELLINGTON, this day. On the 'publication of the concluding section of the Rt. lion. J. 0. Coates’ central bank statement, comments have been issued to the Post by Air R. W. Gibbs, chairman of the Bank of New Zealand. Mr Gibbs said the Minister had carefully avoided any useful criticism, and failed utterly to give any satisfactory reasons for setting up a central bank in New Zealand, or the advantages to be derived therefrom, “unless, indeed, the maze of volubility which his official essayists prepared for him to launch on the public is thought to do so.’’ “Certainly we are told that a uniform note issue would be a ‘commercial convenience,’ ’’ he added. “In what way? The trading public is quite satisfied to got hold of the /wellbacked notes of trading banks, and would show no greater preference for the notes of the proposed new proprietary institution. The main thing In these days is to get hold of tho notes. “The Minister denies the ‘dictation’ of London financiers. Suppose we substitute ‘pressure.’ He perhaps may not 'be so ready to deny that. It is possible this was couched in diplomatic language akin to our ‘voluntary’ conversion. He may have been asked to ‘kindly introduce legislation—voluntarily,’ but if you don’t—! But my experience of London finance language is that it is invariably strictly honest, straightforward, direct, and unequivocal. “The Minister denies that there would be any restriction of credit due to the requirements of the central bank; another proof of how little he knows about the question, and how deplorably incapable he too often is of seeing the obvious.

“The events connected with the South African Reserve Bank are recent history, as also are those relating to the American Federal system, and my remarks thereon are statements of well-known facts. The proposed dangerous interference with the banking structure in New Zealand at the present time, I still maintain, warrants my repeating the Chancellor’s remark that ‘this is no .time for rash experiments in monetary matters.’ ’