CENTRAL BANK BILL

Poverty Bay Herald, Volume LX, Issue 18249, 18 November 1933, Page 12

CENTRAL BANK BILL

tfiteEß HOUSE DEBATE ;!■ u . MINISTERS DEFENCE ' v* * SECOND READING CARRIED A .'.ls ■ * •> #:;■ (Per Pres. Association.) . WELLINGTON, last night. The second reading debate of tlio Reserve Bank of New Zealand Bill- was ■continued: ill tho Legislative Council. Sir James Allen, dealing with statefnents that the bank should be free from political influence, asked whether it was ejjSy tb (few a distinction between politieat.inliience .and Parliamentary action. Pailigtneift, as the representative of the people, must ibe supreme. He could see tio .food reason why the State should appoint (hree directors bn its own account. If ho ‘had the power he would I go back to tpe bill of 1932. The Hon, it Masters replied to points made by Sir Francis Bell. Mr. Masters said that Sir Otto Niemoyer bad not come to New Zealand of bis own volition. He was invited to advise the Government*, on the Reserve Bank and *other matters. dealing with Dominion finance. , Five out of the six banks operating in New Zealand welcomed the Reserve Bank, and they should be in a position to express an opinion as to tho necessity ioi such .an institution. The only resolution actually passed at the

World Conference was one in favor of the establishment of central banks. POLITICAL INFLUENCE? Doubt had been expressed, said the Minister,, that tho bank would bo free of political influence, and particular objection was taken to the provision for tho appointment of governor and deputygovernor. The Government already had four nominees on the Bank of New Zealand, and it was remarkable that the only bank opposing tho Reserve Bank was the Bank of Now Zealand. If the Government was in the habit of exercising its iulluenee, surely it would have exercised influence with the directors of the Bank of New Zealand? There were Government nominees on various boards in the country, and there was no more reasons for Government interference with the proposed bank than there was with the boards on which tho Government was represented. The appointment of tho governor and the deputy-governor by the State was made, by ail countries except Chile and Greece. In this respect New Zealand was not doing anything unusual. ' Mr. Masters said he was not going to cast a reflection on the trading banks,* but their outlook was totally different from that of a central hank, as the trading banks were profit,-making organisations. Regarding the criticism that the bill bad been amended to exclude the hank's sole right of issue, lie said the Government had power to alter legislation at any time. Words were <|iiite unnecessary. Sir Francis eBH must know that ! it did not matter one iota whether the j words were in the bill or not. All the : ' profits from the bank, except £25,000, must accrue to the State. The bill -was read a second time by ,13 votes to four, those voting against *