PARLIAMENT

Southland Times, Issue 22156, 26 October 1933, Page 8

PARLIAMENT

RESERVE BANK DISCUSSION ON BILL THE SECOND READING URGENCY GRANTED (From Our Parliamentary Reporter.) Wellington, October 25. A hostile amendment to the Reserve Bank of New Zealand Bill was moved in the House of Representatives this afternoon shortly after the debate on the second reading was resumed. The amendment, which was moved by Mr D. G. Sullivan, covers a large number of points, but the Government is not uneasy regarding the outcome of the division on it. Urgency for the passing of the second reading was claimed by the Prime Minister, who said that he wanted the House to sit beyond the usual time because the Government would like to get the second reading through so that the way would be clear for the Imprest Bill which would have to be introduced to-morrow. He was asking for urgency, but he did not want to be unreasonable, and if good progress were made there would be no need to sit all night. Mr M. J. Savage: This Bill is too important to be put through the second reading to-night. The main objection was to certain clauses, Mr Forbes said, and the best way to deal with those clauses was in Committee.

Mr Savage asked if the Prime Minister would allow members to express their views on the Bill which was objected to by a large number of people in the country, and also asked that members should not be kept at work until an unreasonable hour. “I want to get everyone to speak who wants to speak,” Mr Forbes said, “but I want to get the second reading through so that we can get on with the Imprest.” After speaking for a few minutes, Mr Sullivan moved his amendment, as follows:

That all the words after “That” be deleted and the following words inserted in lieu there.of: This House declines to give the second reading to the Bill for the following reasons: (1) It fails to establish the sovereignty of the people and Parliament of New Zealand over the Dominion’s credit resources. (2) It fails to establish a stable currency based on goods and services. (3) It fails to make any provision for credit and currency being provided in an ample quantity for the requirements of industry, trade and social services. (4) It fails to do what is most urgently required in the country’s economic and social life, namely, to provide means of increasing the purchasing power of wage earners, farmers, unemployed workers and useful people of the community generally. (5) It will accentuate and perpetuate the worst features of the present banking system, including its insistence that money shall not be created except on interest bearing loans. Amendment Seconded.

Mr C. H. Chapman seconded the amendment and said that he did not approve of the existing banking system which was burdensome to the community, but the Bill did not deal with the banking problem in the comprehensive way that was necessary. There was nothing in the Bill that would alter the present system and the only virtue in it was that it would help the Government out of the muddle it had got into over the exchange question. It would be preferable if private shareholders were eliminated and the bank made a State institution. Mr W. J. Polson said the amendment showed a complete lack of appreciation of the contents of the Bill. There was not the slightest doubt but that the Reserve Bank was an absolute necessity. It would be the coping stone of the financial system and provided it was run in the interests of the people and not for profit of individuals, it would be of vast service to the State. Continuing, Mr Polson said that the bank should be controlled by the State and there was no reason why such a course should occasion a lack of confidence in its activities. When the Bill reached Committee stages he proposed to move an amendment to the effect that four directors and the Governor of the Bank should be appointed by the Governor-General in Council, that three directors should be appointed by the shareholders and that the Deputy Governor should be appointed by the board, but should not have a deliberative vote.

“I believe that the great proportion of Government members believe that the State should control this bank,” he said, “but the whips have been cracked, the Labour bogey has been trotted out —the poor old Labour Party. I sometimes wonder how it likes to be trotted out as a bogey. It reminds me of Riley’s poem about Orphan Annie,‘The Goblins will get you if you don’t watch out.’ If there were a Labour Government in power to-morrow and it were worth its salt,- it would alter this bank to suit its own purposes. Surely the Minister must recognize that. I think he must be afraid that without private control the trading banks would prejudice the success of his central bank.” The Minister of Finance: No, no, that’s not fair.

Mr Polson: Well, perhaps it’s not fair, but I cannot understand his attitude, knowing his Liberal attitude on other questions.

Changes Pending. “This century is going to see great changes,” Mr Polson continued. “In the 19th century control by nobility and control by the priesthood were swept aside and I think that in this century control by financial oligarchy will be swept aside throughout the world.” A Labour member: You’re coming on. “It is useless for the Government to put out Mrs Partington with herbroom to sweep back the tide,” Mr Polson. He added: The day of capitalist domination is over. The world realizes that humanity must be free from it. It is useless for the Government to bury its head in the sand over this matter. It should recognize the signs of the times. It should recognize the sentiment throughout the country in favour of the State controlling its own institutions.

Mr C. J. Carr said that the House had just witnessed a phenomenon. "Once I tried to convert a business man to Labour,” he said, “but I failed. However, I converted a farmer and he converted the business man. It looks as if the farmers have succeeded in converting the hon. member for Stratford. What a change must have taken place in the attitude of the farming community.” The debate was resumed after the Australian and New Zealand . trade agreement debate had been disposed of.

Mr A. E. Jull said he was in favour of the Bill, but wanted the proposals in the measure modified so that the

Government would have the appointment of the majority of the directors of the bank. Mr H. M. Rushworth said he considered New Zealand could get all the advantages claimed by supporters of the Bill through the Bank of New Zealand. The House adjourned at midnight.

OPPOSITION TO BILL HINT OF A CLOSE DIVISION. (From Our Parliamentary Reporter.) Wellington, October 25. Although it has more or less been taken for granted tha the Reserve Bank of New Zealand Bill would pass through the House without serious opposition, it is now stated in certain political quarters that the division on the second reading may be uncomfortably close. However, this can be discounted by the fact that some Government members franklj’ admit that they have no desire for a general election at the present time and will not take the risk of bringing one about. The fact that some members of the Government are not altogether satisfied with the Bill as it stands has been accentuated by the fact that a large number of members have had communicaions from their electorates instructing them to vote against the measure. It is probably this fact that has led to rumours of the uncertainty mentioned, but as already stated the objections to facing a general election will outweigh the requests made. There are at the present time about three Goversment members who are holding out for the direct appointment of the Governor and Deputy Governor of the bank by the Government, but it is doubtful if even these will vote against the second reading of the Bill, although they may register their opposition when the clause relating to the appointment of these officers is being considered in committee.