WHY IT CAME.

Star (Christchurch), Volume LXVI, Issue 20625, 28 May 1935, Page 11

WHY IT CAME.

Reserve Bank as “ Plunket Nurse.” RELIEF FOR GOVERNMENT. Among the reasons given by Professor B. E. Murphy, of Victoria University College, in a recent address at P Napier, for the rather sudden introduc's tion of the Reserve Bank of New Zealand was that it could relieve the Gov--1 eminent of embarrassment by taking , over the problem created by exchange ' control—“ a sort of Plunket nurse for j the high exchange baby.” )r Professor Murphy attributed the introduction of the bank to a number lt of reasons, not all held by the same LS people, states the " Hawke’s Bay Herald.” Among these, he said, it was s > felt that ’we should imitate others, be s ’ in line with recent developments, and 1... obtain the advantages accruing from )_ central bank operations. The Reserve ;9 Bank would be an insurance against d nationalisation or political control of a the banking system and take the wind > out of the nationalises’ sails. Fur- -- ther, it was opportune to secure for o the Government and the people the )t premium on the appreciation of the c- large gold holdings of the trading n banks. 3, Professor Murphy said it was felt v that New' Zaeland was too dependent It on banking institutions domiciled h abroad and too likely to be dragged at >f the heels of Australian finance. The n dominance of London was a different 5- matter. As long as we sold mainly to is Britain and borrowed mainly from ■r Britain we should be dominated by i 0 London under any banking system. The attitude of a certain Australian bank frightened many people in New Zealand, for it appeared to be interfering in the Dominion’s domestic | politics for its own private advantage. ’ The idea, then, was to have New Zealand money and banking determined , for good or ill by New Zealanders in I Wellington and not by Australians in n Sydney. c l “Most people felt that if we had to t scorch our fingers we should do it our-j-j selves and not let anybody else push a our hands into the fire,” Professor -] Murphy said. t Lastly, he pointed to the anomalous patchwork banking system with six e trading banks, one domiciled in New n Zealand, three in London, and two in >_ Australia, four of them primarily Ause tralian institutions largely outside r New Zealand jurisdiction. The Gov--3 eminent owned nearly a third of the capital and appointed four out of the 1 six directors of one of the banks, but t it had no regulative powers over the other institutions. The banks had 1 ceased to work in harmony with themr selves. Exchange had been artificallv s depreciated, there was no gold standi ard, and we were tied precariously to r sterling, which itself was swinging in • the air. Such a situation as this needs ed regularising. J COLONIAL SUGAR. i j Shareholders Consider > Question of Tax. ' per Press Association. ’ AUCKLAND, May 27. , The ruling of the Commissioner of Taxes that bonus shares issued last t year by the Colonial Sugar Refining Company, Ltd., were liable for unem- ; ploy men t tax and for assessing the rate ' of income tax was discussed at a meet--1 ing of the company’s shareholders in 3 Auckland. - Questioned regarding the tax posi--1 tion in Australia, the chairman, Mr W. j 1 R. Wilson, said that the local office of t the company had received advice from : the head office in Sydney that the whole of the bonus issue of shares would be liable for Unemployment Tax j (now called Special Income Tax) in ) New South Wales. This might alter the whole position, as share-holders in , New Zealand were liable in respect of ! dividends at least only on so much of the amount as had not been taxed in l New South Wales. r Mr Wilson read a telegram received from Wellington stating that southern , shareholders would co-operate with Auckland. [ A committee was set up to go into the matter. A levy of 5s a shareholder was collected provisionally for expenses. Shareholders suggested that a de- ‘ finite line of action should be taken ' and it was decided not to pay Unem- ' ployment Tax on shares for the time [ being. l SYDNEY WOOL SALES. i SYDNEY. May 27. At the wool sales to-day 10,240 bales t were offered and 9550 sold, while 6054 E bales were sold privately. Under very keen and widespread com- : petition prices rose 5 per cent above ; closing rates of last week for all i descriptions. Japanese, French, Gerl man and Bradford buyers were the - principal operators, with support from - local mills. I Greasy merino sold to 20d. The average price last week was £l3 15s*lld per bale, or 11. Id per lb. ( . ’ . ’ ’ • ,