RESERVE BANK POLICY

Southland Times, Issue 23949, 16 October 1939, Page 6

RESERVE BANK POLICY

Information Sought By Business Men POSSIBLE EFFECT OF MEASURE Commercial Interests Apprehensive (United Press Association) WELLINGTON, October 14. More explicit, explanations about the provisions of the Reserve Bank Amendment Bill are sought in a letter sent by the Associated Chambers of Commerce to the Minister of Finance (the Hon. W. Nash). The letter, which refers to the concern caused in the commercial community about the possible effects of the measure, state?: —

The production by the Government of the Reserve Bank Amendment Bill, the nature of the provisions of the measure, the inadequate second reading explanation of the intentions of the Government concerning the powers sought, and the haste with which the Bill was put through all stages, have all caused growing concern among the commercial community of New Zealand. The reaction of the Associated Chambers to political control of banking and monetary policy was not, and is not, by any means favourable, but we made no protest against the Bill on its appearance, pending your giving an explanation at the point of the second reading about the policy the Government proposed to pursue in the exercise of the powers sought under the Bill in order that we could view the Bill in the light of that explanation.

QUESTIONS “LEFT OBSCURE" Not only was there no interval allowed after the second reading explanation for the measure to be weighed by the public—the Bill being put through all stages during the night—but that explanation, we i respectfully submit, left many major questions completely obscure. We would have thought the objective of concluding the parliamentary session by last week-end of the smallest importance compared with the need for careful public consideration of the extensive and dangerous changes to the reserve banking system brought about by the Bill. That matter apart, however, since the measure has now been dealt with, what still remains of current concern is the fact that fears engendered by the Bill because of its inflationary possibilities have not been dispersed, but rather have increased because of the inadequacy of explanations of the Government’s policy given to date on behalf of the Bill and its powers. Will the Government at this stage allay the deep apprehension which has arisen throughout the country by giving more explicit explanation on such important questions as:— 1. Precisely how funds for war purposes over and above those forthcoming from revenue are to be provided ? 2. To what extent it is considered by the Government that the Reserve Bank credit can be used without inflating currency? 3. What is the nature of the requests that were made by the Government to the Reserve Bank but not met by the bank, and which constitute one of the reasons for the promotion of the Bill? 4. In short, how are the extensive powers which have been taken to be applied, if not over the whole war period, the duration of which the Government cannot know, at least for that immediate shortterm period which the Government must have fully estimated already in relation to the augmentation of war finance through the powers of the Reserve Bank Amendment Bill? As this is a matter of public concern, we propose handing a copy of this letter to the Press for publication, and we hope the questions raised herein will be dealt with for the information of the public.