CENTRAL BANK

Southland Times, Issue 21850, 29 October 1932, Page 6

CENTRAL BANK

VARIED OPINIONS MEMBERS DISCUSS ESTABLISHMENT POINTS FOR AND AGAINST (From Our Parliamentary Reporter.) Wellington, October 28. Hope that if a central reserve bank was set up in New Zealand it would be controlled by the’ State was expressed by Mr R. McKeen (L., Wellington South) in the House of Representatives to-day. Mr McKeen said it was realized that the old banking system was no longer suitable to the economic situation. The present financial system had absolutely broken down and the need for a change was becoming increasingly apparent. The financial policieS should be controlled by Parliament which should see to it that the banking system was used for the benefit of the country as a whole. A central bank was essential, but it should be a State organization. He hoped the bank would not be established on the lines suggested by Sir Otto Niemeyer who had come to New Zealand in the interests of the Bank of England and the big financial interests. Central banking was not a new idea, but had germinated after the war.

A statement that the establishment of a central reserve bank would mean that New Zealand would lose all financial autonomy was made by Mr H. Atmore (1., Nelson) when speaking during the Budget debate in the House of Representatives this afternoon. Mr Atmore’s speech was confined almost exclusively to the discussion of the question of currency. Mr Atmore said there should be a clear understanding of the position in connection with the central reserve bank. The central reserve bank recommended by Sir Otto Niemeyer would tie New Zealand to the Bank of England and according to one of its directors, Sir Josiah Stamp, that bank in turn took its orders from the Federal Reserve Bank of America. Mr Atmore declared that the Government had completely failed to face the conditions of the age. The time had come when it was imperative that there should be a reduction in working hours and arrangements should be made to ensure that everyone received a just share of the country’s wealth. Difficulty had arisen because there were insufficient ticket wages to allow men to receive satisfactory commodity wages. New Zealand to-day possessed more ability to feed and clothe than she had had in the prosperous year of 1926, in fact more than ever before in history, yet people were starving. All that was lacking was currency and he condemned the failure of the Government to utilize the credit of the people for the purpose of issuing sufficient paper money to overcome the shortage of ticket wages to which he had referred.