BANK OF NEW ZEALAND BILL

Wanganui Chronicle, Volume 89, Issue 266, 10 November 1945, Page 5

BANK OF NEW ZEALAND BILL

DEBATE CONTINUED IN HOUSE ADJOURNED UNTIL NEXT WEDNESDAY (I’-A.) Parliament Bldgs., Nov. 9. Debate on the Bank of New Zealand Bill was resumed in the House of Representatives this morning and was continued this afternoon. The House rose at 5.35 p.m., until 2.30 p.m. on Wednesday. It is intended to renew the debate on the Bill on Wednesday night. The first speaker this morning was Mr. T. L. Macdonald (Opp., Mataura). He said it was regrettable that the debate was being continued in daylight when reception conditions made it impossible for thousands of people in the far south and far north to listen in and when many more were precluded by their day’s work from following the debate.

Discussing the relationships between Mr. Nash and the Labour Party conference in regard to the decision to proceed with the Bill. Mr. Macdonald said the Minister had performed a somersault, but he haa maae it a neat one and had provided himself with a mattress to land on when he did a back flip. He had given way not because his reasons against acquisition of the bank shares had become any less sound, but because of conference pre. sure to make the measure more respectable. It was presented in the guise of something to aid rehabilitation. but no returned servicemen's organisation had asked for this Bill to facilitate rehabilitation. There was nothing the Government would be able to do for ex-servicemen through this Bill which it could not already do. Mr. K. Holyoake (Opp.—Pahiatua): It is pure window dressing. Mr. Macdonald said that reference to rehabilitation was simply camouflage, cloaking the Socialist Government’s move to retain office by all means in its power. The offer of a cash payment to every shareholder for his property which was being wrested from him, contrasted with the declaration that servicemen’s gratuities must, be spread over several years to prevent inflation. Apparently it was inflation to pay cash in the discharge of a debt to servicemen, but not to pay cash for an act of confiscation. DIRECTORS’ ATTITUDE Mr. Macdonald said that at the last annual meeting of the Bank of New Zealand, certain directors were very opposed to State control of the bank, but had now reversed their attitucvc. We could look to Europe for a parallel, where the mauch of a dictatorship was speeded up because men of high ideals accepted the assurances of those ranged against them. It would have been far better for these people to have made the harder decision and joined the forces of resistance. He said the main part of the stock firms’ business would be wiped out by the Government policy of a State bank being the only one to issue credit. The Government’s decision to take over the shares would have a disturbing effect on the whole community. The Bill could be described as a victory for the extremists of the Labour Party and the Minister of Finance was the “wizard that was.” “HANDSOME THING”

Mr. W. T. Anderton (Govt.—Eden) said the Government had done the handsome thing by offering to take over the shares on the terms announced. There was no principle of confiscation embodied in the Bill, nor was it true to allege expropriation of the property of the private individual. It had been said that the bank would create “funny money” at the expense of the community. The interest oi this Government was for those who produced the wealth of the Dominion, and the economic stability or the Dominion was of such a nature that at no time could there be an insufficiency of money for the purpose of creating goods and services. All inflations, except in wartime conditions and depressions in the world, had Deen due to private manipulation of money and manipulation of the banking system. No Government could guarantee that such events would not happen again unless it had the forces to regulate (he economic system of the Dominion. The banks had always defeated the aims and objects of the producers of wealth, and the creation of money by private people was the greatest fraud ever perpetrated on the people. Mis. Hilda Ross (Opp.—Hamilton) said the Bill would cause women to Lose confidence in bank fixed deposits as a form of investment, because it would make bank managers little more than civil servants. There was a great difference between a bank functioning solely as a bank and one which was primarily an instrument of Government poliqy. Women and other Voters would regi ter their opinions forcibly in the only way available to them—at (he ballot box at the next election. EFFICIENT ROUTINE JOB

Mr. Clyde Carr (Govt.—Timaru) dismissing the operations of trading banks, which he said were trequentiy harmful to the community and unjust to individual diems, said the ordinary bank office) s were beyond reproach. They did a routine job efficiently. Some bank managers were an institution in their town. They knew local finance and administered funds wisely and often generously, but al times they were brought up with a round turn by instructions from a bank inspector, which in turn often reflected instructions from London or Wall Street. The Government was planning for peace and

could not carry out its plan unless it controlled the chief factor —the mechanism of finance and exchange. In the ordinary routine of the bank, accommodation would be granted in ihe same way as was granted by the State Advance*. If a person felt an injuiy was done to him he could write to his member of Parliament, who would make representations to the Minister of Finance to have the matter looked into. Mr. W. H. Gillespie (Opp. —Hurunui) said Mr. Clyde Carr had let the cat out of the hag, because if a person could not get an overdraft he would go to his member, who would bring pressure to bear on the Minister. It was a very vicious principle whe.n a member could force a Minister to get what a member wanted.

Mr. T. H. McCombs (Govt.—Lyttelton said he had received a number ol communications from his electorate, expressing both approval and disapproval of the Bill. Messages in favour represented about. 1000 people while he had received some 13 communications from electors of ins who oppo-ed the Bill. Mr. Gillespie: I could bring you 300. Mr. McCombs said the decision io take over the bank was made not by the Labour Partv conference as had been suggested, hut by the Parliamentary Labour Party, which had unanimously agreed last year that the Bill should be brought down. Sub-

sequently the decision was confirmed by the Labour Party conference, but even then the resolution was moved and seconded by members of Parliament.

The debate was interrupted at 1 o’clock.

Arguments for and against the Governments acquisition of bank shares were continued when the House resumed sitting in the afternoon. Mr. A. Hamilton (Opp., Wallace; said many depositors and businessmen were very anxious about the Bank of New Zealand Bill, with the introduction of which the Government was stirr.ng up the country at a time when co-operation was needed. He believed that a majority in the House did not want the Bill, and did not believe in it. There was £346,000,000 of free money to-day, and there was no need to have a State bank to create money. Banking had been very successful in New Zealand, and there had been no trouble for a long time. TAXPAYERS SHOULD BE VIGILANT.

Mr. Hamilton said the taxpayers should exercise vigilance, and watch their position. The preamble to the Bill was almost a sacrilege, and spelndid phrases and words were used to gull the people. He asked, why did the Government want the Bank of New Zealand? When confidence was gone the real bulwark of banking had gone too. It would be remarkable if the bank would maintain the same amount of business after it had been taken over by the Government. It was obvious to him, after hearing all that had been said of stock and station agents, that Government members were quite ignorant of the good work those firms did for farmers. They had no other desire than to help the farmers.

Mr. C. H. Chapman (Govt, Wellington North) commented on the Opposition’s senseless discourtesy to the Minister of Finance in denying him sufficient time to give adequate explanation of the Bill.

Opposition voices: Why didn’t you play the game? Mr. Chapman said that perhaps the Oppostion had a sinister motive, for they might have realised that the Minister could have given the country convincing reasons for taking over the Bill.

Mr. Chapman said the suggestion had been made that if the Government took control of the bank it would be a failure, but he pointed to the success of such great State undertaking as the railways, the post office and the Public Trust Office. It had been said, too, that all other bai <ks would have to close down because they would be unable to withstand the competition of a State-own-ed trading bank, but it should be remembered that numerous insurance compm lies operated successfully in spite of Government insurance departments. “I think other banks will be able to carry on. I am not quite sure if it is desirable for them to do so or i.<ot,” said Mr. Chapman. A Government-owned trading bank would be just as successful as other State undertakings. The ownership of a trading bark would help the Government to keep the interests rates low. However, those who imagined that with a State tradfcig bank all tney would need to do would be to go along and get an overdraft were in lor disappointment. Their proposition would have to be creditworthy, and to the advantage of the community. If it was disadvantageous to the community then certainly no loan would be granted. Private banks had sometimes granted loans lor purposes antagonistic to the interests of the people. Mr. R. G. Gerard (Opp., Mid-Can-terbury) said rehabilitation was being used for political purposes in discussion of this Bill. Returned men had not fought for the taking over of the bank. Government voices: They didn’t fight for the bank hither! Mr. Gerard said the men who went overseas fought for a continuation of their own way of life, but that was being taken away from them. Taking control of the bank was another step toward complete socialisation. The Government had been treating the public with sugar-coated pills containing dynamite. The next step, he said, would be State control of mercantile firms, freezing works, homes, farms and businesses of the people. Mr. C. M. Williams (Govt., Kaiapoi) said he had never heard anyone deny that socialisation was not the policy oi the Labour party. It was all a question of tempo and extent. He said an expansion of credit at present would he harmful, because there was ample purchasing power but a shortage of goods. It the Government had started its own bank to deal with business which the Government could put in its way, it would nave destroyed the assets of the Bank of New Zealand and every other bank which competed with such a State bank. Despite the crit.cism of the Opposition, a State bark would be of great assistance in rehabilitation. He declared tiiat. with the acquisition of the Bank of Now Zealand the chain of financial organisations would be completed and the Government would be enabled to carry out its financial

policy. Mr. C. M. Bowden (Opp., Wellington West) said Mr. Williams, in common with other members, would be required to run round looking for overdrafts for his constituents under the new system.

Mr. Williams: I won’t do it. Mr. Bowden said Mr. Williams had declared that by the setting up of its own bank the Government would have destroyed the assets of the existing banks. The fact was the Government had been destroying the value of the shares in the trading banks for years, and if anything would further that process It wai this Bill. Mr. Bowden said the arrangement between the Government and the directors was one of which the shareholders knew nothing. When it appeared in the newspapers it stunned them. There was no contract with the shareholders, no negotiations. The price of the shares had been fixed njt by agreement, but solely by the

Mr. E. P. Meachen (Govt., Marlborough) said ibe Opposition was doing al! it could to create disunity. They wore on dangerous ground when they criticised this measure. He was sure the honest, decent farmer would appreciate what the Govrrment had done for h’m, and he was satisfied that the country. In future, would have a definite safeguard as the result of the passing of the Bill.

I The House rose at 5.35 p.m. until 2.30 p.m. on -