The Wanganui Herald (Published Daily.) MONDAY, JULY 26, 1920. A STATE BANK.

Wanganui Herald, Volume LIII, Issue 160711, 26 July 1920, Page 8

The Wanganui Herald (Published Daily.) MONDAY, JULY 26, 1920. A STATE BANK.

Though opinion is overwhelming in New Zealand in favour of the establishment of a State Bank, there is little chance of such a desirable undertaking being carried out so long as Mr Massey holds the reins of office. That was plainly evidenced last week, when the member for Wanganui introduced his State Bank Bill, which after a short debate was referred to the Labour Bills Committee. Private members’ Bills, when dealing with matters of national concern, have very little chance of passing into law unless adopted or supported by the Government of the day. Though Mr Massey adduced no reasonable argument against the proposal, he made it plain that he is opposed to' a State Bank. He thought it would be better to leave things as they are as far as banking legislation,.is concerned, and remarked that New Zealand was already a substantial shareholder in the Bank of New Zealand, and found the investment a very profitable one. This, as the Lyttelton Times points out, is really an argument in support of a Stateowned Bank. The Dominion’s holding in the Bank of New Zealand is quite a payable proposition so good, indeed, that no sensible person would think of parting with it—• and that is certainly not a good reason against going further bn the same lines and becoming a sole proprietor in place of a Junior partner. Mr Veitch was able to show that the Australian Commonwealth Bank had proved of benefit to the country and a source of profit to the taxpayers. The history of that bank is a lemarkable disproof of all the solemn warnings that were offered when the institution was established, and during the war it , must have saved Australia a great . deal of money by facilitating th® ’ large loan and other financial transactions of the country. The Bank of New Zealand has, no doubt, served the Government well, as Mr Massey took occasion to say, and

proper credit is due'to the directors. The business of banking, has, however, become extremely profitable, and there can be no doubt that the Lyttelton Times guages public opinion correctly when it says that the majority of the people have begun to look upon most of the balance sheets with disfavour. The dividend paid by the Bank of New Zealand on the ordinary share capital has grown to 17% per cent., after paying income tax, which is equivalent to 28 per cent, allowing for taxation at 7/6 in the pound. That profit is made out of the public. True, a fair percentage is earned outside New Zealand, to which the public of the Dominion can have no reasonable objection. But what thoughtful people are saying and thinking when they see fancy bank balance sheets is that if the State went into the business it obviously could do one of two things—it could reduce banking charges, or it could collect for the public large profits which would be very useful in these days of heavy public expenditure and excessive taxation.