THE OLD, OLD STORY

Taranaki Daily News, 24 July 1931, Page 6

THE OLD, OLD STORY

The proposal to convert the Bank of New Zealand into a State bank is a favourite one with a certain class o politician. Its latest advocate is the Labour member for Waimarino, Mr. i-_ Langstone, who introduced a Bank of New Zealand Amendment Bill in tne House of Representatives on Wednesday. Like the old lady who found such comfort in the word Mesopotamia, Socialistic politicians .seem to find an attractiveness about tlie title State bank” that is extraordinary. _ In Mr. Langstone’s opinion, the creation of a State bank would bring about a monetary reform, stimulate credit, and m shine magical fashion roll back the clouds of depression with which t.ie Dominion is overshadowed at present. It is almost a pity to spoil such roseate optimism with cold fact, but Labour politicians in Australia held somewhat similar views to those of Mr. Langstone when the Commonwealth _ Bank was created. Labour in Australia lias found, however, as Labour would here, that politics and banking do not mix. On the contrary, it became the duty of ths Coni riion we al th Bank to call a halt in national extravagance to tell the Federal Government that its credit was near exhaustion. So much for the “creation of credit” by a State-owned banking institution, of which Mr. Langstone is so hopeful. On the other hand, some of the keenest financial minds in the Empire have reported against anything approaching political control of currency or credit. The unchallenged position held by the Bank of England is due to its reputation for being above aiid beyond any influences other than those brought about by economic conditions as they are, and not as politicians or any other people might like the public to imagine them to be. The result of the bank’s strength has been demonstrated in the appeal made by Europe for gold during the past few days, an appeal that the Bank of England met as part of its ordinary business, and because it was satisfied of the soundness of the proposition. The case against the private banking institutions of this country, if there is one, requires something more than political opinions or desires to make it worth consideration. It is an economic, _ and not a political, question, still less is it one in which party politics can have any share if the good name of the Dominion is to be undisturbed.