THE COMMITTTE STAGE

Poverty Bay Herald, Volume LX, Issue 18235, 2 November 1933, Page 7

THE COMMITTTE STAGE

RESERVE BANK BILL GOOD PROGRESS MADE ALL AMENDMENTS REJECTED (Parliamentary Reporter.) , WELLINGTON, this day. Twelve clauses of the Reserve Bank _ of New Zealand Bill had passed the t ’ ordeal of the committee discussion when f the House adjourned at 12.25 o clock r this morning. This ensures beyond question, because amendments were Usually rejected by a majority _ of at " least 20, that the clauses providing for j the bank’s establishment, its capital, and 5 the definition of its objects, will become 1 law in the original form. ! Many efforts were made by the Labor members to have passed amendments [ which would have made the bank purely a State institution. They endeavored to eliminate private shareholding, and also references to shareholders’ powers. Tho Leader of the Opposition, .Mr. M. J. Savage, in emphasising the desire for a State bank, declared that there was no intention of putting its administration into the Cabinet room. "All we ask for” lie said, "is that this should he..a State institution which should not be limited to shares.” This principle, as enunciated in a Labor amendment, was rejected by 43 votes to 23. Jilr. A. M. Samuel (Coal., Thames) supported Labor. The Government's attitude, as defined by the Rt. Hon. 0. W. Forbes in simple terms, was that “if you were running a> shop you should nob antagonise your customers.” The reserve bank was a bankers’ bank, and the Government desired it to start with the immediate confidence of the banking and commercial community, and it was the private shareholding interest that engendered this. OBJECTS OF THE BANK Critics having failed to eliminate the shareholders, became concerned to restrict them to New Zealanders, and in this connection the Rt. Hon. J. G. Coates made the only concession during the sitting. He undertook to examine the position to see if there was sufficient power to exclude undesirable shareholders. The allocation of shares and their transfer were subject to the approval of the Finance Minister, but if that was inadequate lie would have the clause redrafted. The progress made thoroughly satisfied Ministers, who were particularly pleased that tile short title was not debated, as 1 had been feared, for many hours. Shortly after midnight, all matters re- : lating to the bank’s capital and estab- , lishment had been adopted without amendment, and a new phase arose on the clause defining the general objects and purposes of the reserve bank. Its primary duty is exercising of control j over monetary circulation and credit in New Zealand to the end that the econ- , omic welfare of the Dominion may be ‘ promoted and maintained. Mr. H. G. R. Mason (Lab., Auckland < Sub.) introduced an amendment directing < that the monetary system should be t based on goods and services, and that the value of the bank’s note issue should | be expressed in terms of wholesale prices f of New Zealand-produced commodities, i and should remain stable. This was nega- < tived by 43 votes' to 26. • The best vote the Opposition got was 27 on the private shareholding question. The committee discussion will be resumed this afternoon.

j lie tirst amendment was to the clause providing for the establishment of a Reserve Bank. Air. J. A. Lee (Lab., Grey Lynn) moving to eliminate the share capital. The Leader of the Opposition said the amendment meant that they desired to establish a pure!-- State institution. Mr. A. S. Richards (Lab., 'Roskill) said a State bank was desirable, in order to giro people facilities which were i'cipurcd, at little or no cost. * Air. W. A. Ve.itch (Coal., Wanganui) said that it- was undesirable that banking should he administered by the Government, although I'ariianient, by its laws, rightly controlled banking within Hie country. The amendment was defeated by 43 votes to 23, and the clause was passed. Air. Lee moved an amendment to eliminate the necessity for the concurrence of shareholders in alterations to the rules of the bank. Messrs. 11. At more (Ind., Nelson), 11. Al. Iliishworth (C.P., Bay of Islands), and A. J. .Stallworthy (Ind., Eden)' ioined with 1 abor members in supporting Air. Lee's amendment. .Supporting tho amendment, Air. R. AlcKeen (Lab., Wellington S.) said lie could not understand why the Government insisted on having shareholders. He did not sec what, it hoped to gain by adopting such a course, because the shareholders would only be in Ihe concern for what they could get out of it. ENSURING CONFIDENCE Mr. Forbes said it was essential that tho bank should have t lie confidence of tho people, and that was the reason for having private shareholders. It was probable that in time it would be possible to establish confidence in a State hank, but they could not afford to wait for that confidence. They could not hope to secure confidence at once unless there were private shareholders. Air. G. Carr (Lab., Timaru) said there would be a minimum of 200 shareholders in tho bank. Could it be said that those 200 people wero going to inspire confidence in the rest- of the community —over a million and a half. Tho amendment was defeated by 41 votes to 27. Another amendment, designed to eliminate the share canitnl, was moved bv Mr W. E. Barnard (Lab., Napier), when the next, clause was consid°red, but it was defeated bv 44 votes to 25. Mr. R. A. Wright (Coal., Wellington Sub.) sought to add a provision that no •shares should lie allotted to any person other than a British subject ordinarily resident in New Zealand. Ho said that this amendment would ensure that there would be no undcsirablo shareholders, and, at tho same time, it should inflict no hardship on the bank. 12 CLAUSES PASSED Mr. A. Is. Anscll (Coal., Chalmers) suggested that 110 shares be allotted to other than New Zealand citizens, and Mint no voting right should be retained by persons absent from tho Dominion for more than 12 months. Air. C. H. Clinkard (Coal., Rotorua) said that ho hoped the Minister would accept fhe amendment, as there was a strong feeling that the bank should be solely a New Zealand institution. Air. Coates said that lie knew that there was a fooling that it was desirable that the shareholding should bo kept as strict I v as possible to New Zealand shareholders. He undertook to consider tho clauso with a view'to meeting the wishes of members. He would see whether a new clause could he drafted covering the position generally. Air. Wright did not press his amendment, and the clause was adopted. AD. Afason then moved an amendment seeking to insert a provision that the primary duty of the banks should he to establish a monetary system based on goods and services, and to maintain control over circulation and credit to that end. The amendment was defeated by 43 votes to 26. At this stage. 12 elansos had been passed, and the House adjourned.