RESERVE BANK BILL

Timaru Herald, Volume CXXXVII, Issue 19640, 7 November 1933, Page 6

RESERVE BANK BILL

PUBLIC MEETING OF PROTEST SOME PLAIN SPEAKING By Telegraph—Press Association WELLINGTON, November 6. A public meeting of protest against the Government’s Bill for the establishment of a Central Reserve Bank was held In the Tpwn Hall to-day. The body of the hall was filled and the audience, with few exceptions, showed itself opposed to the Government’s proposals. During the early stages of the meeting there were a good many Interjections, and one interjector was, at the request of the chairman, Mr A. de B. Brandon, conducted from the hall by a constable. Another interjector, more brief In his remarks, was also conducted from the hall. The chairman declined to allow an amendment to be put to the meeting. The resolution carried protested against the hasty passing of the Reserve Bank Bill which violated the principle of no political interference, would destroy public confidence, and seriously threaten the independence of the bank. The meeting also protested against the proposal of the BUI to expropriate the gold held by the trading banks without provision for the assessment of its value by an independent tribunal as a flagrant breach of public policy and public morality, which will establish a disastrous precedent and gravely prejudice the credit of the country. The chairman, Mr Brandon, said that the Dominion had reached a very critical stage In its existence. Now it was met with a most serious invasion Into purely business matters by “this nondescript creation called the Reserve Bank.” "I want to know whether this ing Is a hole and corner one,” asked a man In the front. He was told to sit down, but persisted in making his voice heard. “You have got not standing of any kind,” he was told. “I have got two good feet,” was his reply. The Interjector sat down, but later interrupted several times and was escorted quietly from the hall by a police constable. “That is the liberty of the subject If you like,” commented a man In the gallery. “Bare Faced Bobbery.” The first speaker was Mr Stronach Paterson, who said that he wished to draw attention to that part of the BUI, which dealt with the appropriation of the gold coin and bullion at present held by the trading banks. The intention of the Niemeyer report was that the trading banks should receive for their gold its value in currency based on gold. “The view of the man cf average business intelligence and cf sound commercial morality,” said Mr Paterson, “Is that the trading banks should have the same right to sell their gold at the full market value all other people have to sell other commodities or other property at its full market value, and that the proposal of this Bill is an act of simple, barefaced robbery." The next speaker, Mr A. R. Atkinson, said it was not a State Bank, but a Reserve Bank that the Government set out to construct. The Government had gone much too far in the direction of State control. It was a remarkable combination of a Labour Party which favoured a State Bank with a "study circle” which did not that had forced the hands of the Government and brough. about that result. "My second point goes much deeper,” said Mr Atkinson, “for it touches the very root of public honesty and fair play. My text might be ‘thou shalt not steal.’ That simple text does not say that private persons may not steal and that governments may not, that you must not steal from a private person, but that you may steal from a bank. Even in America they do not go so far as that. It simply says thou shalt not steal. There was no reason for the Government's violation of a sound and equitable principle and for annexing valuable property without giving the owners the normal protection of an independent tribunal. Blindly confident In its own policy and in the strength of its party majority, the Government has failed to realise that a large share of »ts public confidence was withdrawn when it compelled the Hon. W. Downie Stewart to resign. The same blindness prevents Its seeing how seriously the remnant has been reduced by the rejection of this arbitration clause. The rejection of Mr R. A. Wright’s amendment to restore that clause by 56 votes to 5, is to me the saddest thing in a deplorable business.”

“Financial Muddle.” “Security is the last gift of civilisation, for without security there can be no confidence,” said Mr Hugh C. Jenkins, of Wanganui. The Government policy had already by 25 per cent., or at least 15 per cent., destroyed the security of money contracts made in New Zealand with persons outside the Dominion. The whole Bill had been drafted not to establish a sound central bank but to assist the Government out of its present deplorable financial muddle and to allow “the rake’s progress” to continue a little longer than sound banking would allow. The Government had overshot the mark of sound finance and Treasury Bill finance was being abused. “With the trading banks taking up, say, another £5,000,000 of Treasury Bills you will see that the exchange chickens can be prevented from coming home to roost for a little longer, yet that is the kernel of the whole matter and that is the reason why so Cabinet Minister has sought to defend in public this unsatisfactory proposal.” Mr Wright’s Belief. The concluding speaker was Mr R. A. Wright, M.P., who said that he believed the exchange difficulty was the major reason for the rushing through of the Bank Bill. He did not believe for a moment that the Reserve Bank was going to declare exchange to be free, because the Reserve Bank wouil carry ou. the policy and currency cf the Government. His view was that unless the bank was completely free of all political control it was going to be a danger and a menace to the Dominion. The chairman put the resolution lo the meeting and it was carried on the voices. Statement by Finance Minister. The Minister of Finance to-night issued a statement along the lines that li3 made on the introduction of the Reserve Bank Bill, restating in more concise form "the reasons that in view of the Government conclusively justify the course it has adopted.” Mr Coates stated that the Government had obtained opinions from world authorities ■on banking matters who were in a position to consider the question impartially and they are unanimous and emphatic that the course taken by the Government is the proper one. He knew of no banking authorities who had expressed contrary opinions and it must be taken that the view of the Government had the confirmation of informed opinion.