THE CENTRAL BANK CRITICISM

Wanganui Chronicle, Volume 76, Issue 123, 27 May 1933, Page 8

THE CENTRAL BANK CRITICISM

GOOD DEAL of what passes for criticism of the Central

Bank proposal, advanced, but not defended, by the New Zealand Government, is very wide of the mark, and it would he more in place in a novel by the late Mr. William Le Quex. Surveys of the facts concerning the Central Bank proposal would be very helpful, but drawing upon the imagination is not likely to assist the discussion at all. It is quite easy to assert, as does Mr. Rushbrook, M.P., and some others with him, that the whole scheme is a plot to bring New Zealand finance and banking under the dominance of the Bank of England, but. it would be more to the point if this airy charge was made in more specific terms. It would probably surprise most, of those romantic critics, were they to learn the truth of the present arrangements, that, the decisions of the Bank of England, in so far as they arc effective in ruling the money market, do dominate New Zealand finance already, simply because the liquid assets of the New Zealand and Australian banks are situated in London. If the advice given by Sir Otto Niemeyer was sound, and a fully developed money market could be constituted in New Zealand, then the dominance of the Bank of England would be lessened, not increased, in its influence on New Zealand finance and banking. The opposition to Sir Otto Niemeyer’s proposals are really to be based upon the faet that the development of a money market, in its complete sense, is beyond the range of possibility in New Zealand, or even in Australia, at the present time, and therefore it is useless to go to all the trouble, of establishing a Reserve Bank in New Zealand when the means of it operating effectively arc negligible.