CONTROL FOR THE BANKS

Taranaki Daily News, 23 April 1932, Page 7

CONTROL FOR THE BANKS

“FUTILITY OF PARLIAMENT” SHARE IN GENERAL SACRIFICE. MR. O. A. WILKINSON’S SUGGESTION Th® opinion that the banks an- New Zealand should be controlled by the Government to a greater extent - than at present, and that they should be brought under the financial adjustment legislation, was expressed in the House of Representatives this week by Mr. C. A. Wilkinson (Independent, Egmont). Mr. Wilkinson complained that the banks had been excluded from the interest reduction provisions of the Bill, with the result that an impossible state of affairs existed with many trading concerns. These firms', stock and station agents, for example, were heavy borrowers from the trading banks. They had been compelled to reduce their interest charges to their clients, chiefly farmers, by 20 per cent., but the trading banks had notified their intention to reduce their charges by only 74 per Cent. The margin would be so small that many of these firms would probably have to go) out of business altogether, as they would find, it impossible to lend on stock • and chattels- with the ■ margin provided. POWER OVER THE BANKS. . Mr. W. E. Barnard (Labour, Napier): It is suggested we have no power over the banks. Mr. Wilkinson: Well, that shows the futility of Parliament. If Parliament is’ not able to govern, let us hand, the whole "business over to rhe banks and they can run th© lot. Mr. Barnard: That is pretty well so now. Mr. Wilkinson: It is frequently said so, but I will not accept that. "The Government should exercise more control over the ■ banks in . this country,” Mr. Wilkinson added. “We have directors on th© Bank of. New Zealand, certainly, and we should be able to do something there. The trading banks in this country are’ paying more to their depositors: than the same banks in New South Wales.” , .:

The real earning power of money in any undertaking into which it could b© placed in- New Zealand to-day was 2 per cent. —certainly not more. ' It was quit© impossible to go on paying these high charges of interest and rents. The end must be a crash, and then chaos.

Mr. R. . Sempl© (Labour, Wellington East): We are on the way now.

EQUALITY OF SACRIFICE.

Mr. Wilknson: The 'banks should come into the scheme of . things and share in the general sacrifice so that the whole of the community might live. He complained that some savings bank’s were excluded from the .Bill, while certain local bodies which accepted de-, posits also escaped its provisions. He bad- noticed that the City of Dunedin had made a profit of £40,000 or £50,000 last year.- Yet no’ income tax was paid, while the city council was competing with local trading concerns in the same city. Mr. F. Jones (Labour, Dunedin South): Does the Government pay any rates?

Mr. Wilkinson: “No,-they, don’t.” H© added that certain trading -companies could be excluded' from the Bill. The whole Bill, he said, was a piece of rush, legislation, and had been brought down without adequate consideration. The mor© one studied it the more difficulties one found, and the longer it was in operation the more difficulty the Government -would have in administering it. ■ -• Reference was made by Mr. McCombs to the suggestion of the member for Egmont that taxation should be paid by public enterprise. "I want to lose no time in exposing the fallacy of that argument,” said Mr. McCombs, who contended that th© municipalities; were entitled to rates ‘from public undertakings if th© Stat© collected income tax';from them. So far - as Christchurch was concerned he would -be willing to make the change. If taxation, were paid by the* city tramway department and the Government paid -rates to th© council in respect to the post ofiflee and railway station properties, the Christcliurcli City Council would make a magnificent profit. The whole of th© profits of -public enterprise went into the public purse, but only part of the profits of private enterprise,