CENTRAL BANK

Waipukurau Press, Volume XXVIII, Issue 98, 20 April 1933, Page 2

CENTRAL BANK

Defended By Mr. Coates PROVISION OF SAFEGUARDS FREEDOM FROM POLITICS (Per Press Association) WELLINGTON, Wednesday. At a meeting of the Dominion executive of the New Zealand 1* armers Union to-night fears were expressed that the proposed Central Bank might be controlled by financial interests. Captain F. Colbeck could not see how the Central Bank was going to benefit the farmers of the Dominion. He said it would be extremely unwise to hand over the sovereign rights of the people for 25 years. The executive decided to leave the question in the hands of a special committee. The Minister of Finance (the Rt. Hon. J. G. Coates) wrote stating that the sole purpose of having private shareholders was to provide a nonpolitical franchise for the election of the board of directors. All world authorities laid great stress on the point that the difficult task of controlling credit and currency should be entirely free from the unsettling effects of politics. If the bill was carefully studied it would be seen that adequate safeguards had been provided against the banks or any other financial concerns obtaining control of the bank through buying up shares. In the first instance, it should be noted that shares must be held by individuals, and that companies could not hold shares at all. Secondly, shares were to be allotted in the first instance by the Minister of Finance, and the voting power that might be exercised by any one person was definitely limited. Shares could only be held by persons ordinarily resident in New Zealand. A further safeguard would be found in the provision whereby not more than one of the directors might be a director of any other bank, while officers of other banks were not eligible for appointment. From a closer examination of the proposals there would be no occasion to fear that the Reserve Bank would in any way be dominated by the joint stock banks, Mr. Coates concluded. At the instance of the North Taranaki branch, the executive decided to ask Parliament to set up a committee to make a full inquiry into the present monetary system. Mr. H. O. Melsopp (Auckland) said he was convinced that a monetary system could be put into operation which would get New Zealand out of her difficulties within six months.