INDEMNITY BILL

Taranaki Daily News, 28 January 1933, Page 7

INDEMNITY BILL

PURCHASE OF EXCHANGE PROTECTION OF THE BANKS PROVISIONS FOR PAYMENTS CASH OR TREASURY BILLS INVESTMENT OF PROCEEDS . By Telegraph.—Presa Aawciation. Wellington, Last Night. The Banks Indemnity (Exchange) Bill at present before Parliament is entitled “an Act to insure several banks carrying on the busmess of banking in New Zealand against losses that they may sustain by reason of the fixation at the request of the Government of the rates of exchange on London and arising from the purchase and sale of exchange.” The interpretation clause defines the standard exchange rate as the rate for the telegraphic transmission of moneys from New Zealand to London that was in force prior to January 20. The fixed exchange rate is defined as the rate fixed by the banks and in force at the passing of the Act for the telegraphic transmission of moneys from New Zealand to London and includes any rate intermediate between the standard rate and the rate in force at the passing of the Act that may be hereafter fixed by the banks at the request of the Government. Clause HI. constitutes the Bank .of New Zealand the agent of the Government for the buying and selling of exchange on London for the purposes of the Bill. The provisions of the Bill insofar as they confer rights or impose obligations on the banks carrying on business in New Zealand shall apply with respect to the Bank of New Zealand in its ordinary capacity as they apply to other such banks. Clause IV. authorises the Banks of New Zealand to buy the whole or any portion of surplus exchange held in London by other banks on application being made-by the latter. The Bank of New Zealand as agent of the Government may resell to the banks, says clause V., any exchange acquired by it under the proposed legislation and shall on application in that behalf be required to resell to any bank exchange on London to an amount not exceeding the amount of exchange purchased from that bank pursuant to the preceding clause. • > Clause VI. provides that sales of exchange to or from the Bank of New Zealand shall be made at the fixed exchange rate subject to such concessions as may be mutually agreed to. 4 : • PAYMENT- FOR PURCHASES. U j Exchange purchased on behalf of the Government, clause VII. provides, may be paid for in cash or by Treasury Bills discounted at a rate -to be mutually agreed on between the Government and the banks, but not exceeding in any case the rate for the time being fixed by the banks in respect of overdrafts On best accounts. . . ' All payments, whether in cash or by Treasury Bills, required to be made by the Bank of New Zealand may be met by the Minister of Finance out of the consolidated fund. For the purposes of the Bill the Minister may from time to time borrow on security of Treasury bills or otherwise on security of the public revenues of New Zealand any moneys that may be required for payments to be made by the Bank of New Zealand as agent of the Government or may issue Treasury bills to such an amount as may be necessary in the payment to any bulk for exchange bn London purchased from such bank by the B.ink of New Zealand. Clause VHI. deals with the investment of exchange purchased on behalf of the Government. It is provided that the Minister of Finance or the Bank of New Zealand as agent for the Government may from time to time invest the proceeds of exchange in any securities in which balances of the public account may be for the time being invested in accordance with the provisions of Section 39 of the Public Revenues Act,'and may from time to time sell any securities so purchased. \ If in the opinion of the Minister the proceeds are not otherwise required they may be invested in the purchase of any other securities authorised by this section or may be wholly or partly applied in the redemption of any securities charged upon the public revenues of New Zealand. The Minister or the bank as agent may from time to time in order to provide funds for purposes of the Bill borrow moneys on security of any securities in which moneys are invested under the proceeding provision and may pledge or. hypothecate securities by way of security for sums so borrowed. AU. costs, J charges and expenses incurred in raising moneys under this section shaU with-: out further appropriation be charged to the consolidated fund. A ' The final clause gives power for the . making by Order-in-Council of such regulations, as may be necessary for giv- « ing effect to the proposed legislation.