CENTRAL BANK BILL.

Waikato Times, Volume 114, Issue 19010, 29 July 1933, Page 5

CENTRAL BANK BILL.

-SEVERE CONDEMNATION

" KEEN LOCAL INTEREST. “A NATIONAL DANGER.” A vigorous attack on the proposals embodied In the Central Reserve Bank Bill was made by Colonel S. J. E. ■ Closey, of Auckland, at a largelyattended meeting in Ngaruawahia , last evening. The meeting comprised delegates from most parts of the Raglan electorate, and Mr D. Stewart "Reid, M.P. for Raglan, was present by request. •' . The Mayor of Ngaruawahia, Mr R. Eyre, presided, .and in • introducing Colonel Closey, said-that it was becoming Increasingly' evident that the troubles besetting the world in general and New Zealand in particular had arisen from financial maladjustment. In his opinion unless New Zealand solved her monetary problems in the very near future a crisis was inevitable. . ' Colonel Closey drew attention to the failure, of the World Economic Con'L. ference, and stated that each country r would have to solve its own problems. “It'is no use our waiting for international action. New Zealand must save herself. To-day we are breaking contracts right and left. People are not meeting their obligations and the national morale is being undermined. We' are heading for that ‘bleak and f-roclous barbarism’ of Which Mr Winston Churchill has repeatedly warned us.” ... The speaker went on to point out that banks now created credit When , they made advances, which credit was a clear addition to the amount of money in the community, quoting the Rt. Hon. Reginald McKenna and other authorities. A central bank would mean a consolidation of this power and by thus controlling the issue and cancellation of money would affect the nation’s price levels at will. It -would control-the nation’s credit and In the speaker’s opinion this was far oo vital a matter to be left In the hands of a private Institution. The Real Power. > , “I want to make it dear,’’ said Colonel Closey, “that while the board of directors of the oposed bank would have power over the bank s> internal administration, the real power controlling the bank’s policy would be in the hands of the governor of the bank. Moreover, another, danger hcs in the proposal that New Zealand currency should be definitely linked to sterling at an exchange rate not varying one and a-half per cent either The speaker went on to point out that as England was a manufacturing creditor nation and New Zealand was ‘i a pastoral, debtor country their price level policies would be Invariably in opposition. A . tragic example of this had been New Zealand’s repatriation efforts, when the returned soldiers were lent a pound worth lis 3d, which within three years had been deliberately raised to 19s 8d by financiers J operating vfrom London, In terms of t real wealth the soldiers’ obligations V had been nearly doubled and this was reflected also through the country s overseas Indebtedness. It was-' essential that New Zealand should have control of its Internal price-levels, particularly In view of the farming community having contracted long-term indebtedness. Sir Basil Blackett, in “Planned Money had said: “The criterion by which a central bank should be judged ought to be its success in maintaining a constant price level which is unlikely to be attained except on the basis of independent local currencies. . . the essence of this policy is that the prices of Internal currencies should be left to find their own levels.” It was obvious, therefore, that this proposed linking of New Zealand currency to sterling was condemned by this eminent banking authority. “We must have self government in money, not overseas control,” concluded the speaker amid applause. ' Grave Concern Expressed. . After several questions had been asked and answered the following resolution was carried unanimously: “That this meeting of Raglan electors expresses its grave concern at \ the Government's apparent intention to proceed with the Central Reserve Bank Bill before an open inquiry into the existing monetary system is held.” Colonel Closey was accorded a hearty vote of thanks for his address. MR STEWART REID’S ATTITUDE. WILL NOT GIVE PLEDGE. An attempt to secure a pledge from Mr D. Stewart Reid, M.P. for Raglan, to oppose the Central Bank Bill, was unsuccessful at the meeting at Ngaruawahia last evening. Mr Reid, who „ was Invited to address the gathering, X was subjected to soipe interruption, but refused to commit himself on a question which had somewhat excited the meeting. He stated that there were two sides to every question and that lie would not commit himself without consulting the Prime Minister, the Rt. Hon. G. W. Forbes, who was doubtless gathering evidence on central banking while in London. He had no objection to an open enquiry into the monetary system. Questioned as to his attitude if the Central Bank Bill was made a matter of no confidence by the Government, lie said lie would vote with the Coalition. Mr Reid went on to say that if he was convinced that the Central Bank Bill was definitely not In the Interests of the country he would consider it his duty to resign his seat. (Applause) He reminded his audience that the bill, as at present drafted, might be considerably amended by the House and many of the proposals to which exception was being taken might he struck out. The' following resolution was carried unanimously:—“That this meeting of representatives from various parts of the Raglan electorate instructs the member for the district, Mr D. Stewart Reid, to oppose the passing of the Gcntcral Reserve Bank Bill before an open enquiry into the present money system has been held.” Mr Reid was .subsequently accordj <d a vote of thanks.