THE NEW BANK.

Dominion, Volume 6, Issue 1845, 3 September 1913, Page 4

THE NEW BANK.

PAYMENT OF NOTES ISSUED.

•fllr,'A. M,iMYERS (Auckland.East) Jnoted thaV,the" "report of the Commit-; . 'too on tho Commercial Bank of Austra-- ] i'lii (Limited) Bill bo agreed to. ... . , ,' MrrH. G. ELL (Christchurch South) j ■pointed- out that there was no provision , U tho Bill to compel tho bank to 'issuo : Wtesvfrom any particular places, and ; Mo"rosult might. bo that the notes, uein<* redeemable only at the place of . 'issue, could be exchanged for gold only ' ttt.'Wollington. Sir -Joseph Ward interjected that ho Wpuld bo very sorry to seo tho bank liave. power to issue notes payable anySihorP" All-.thO other banks made their 'liiJtes .pavablq in'.Wellington. * "air.; Ell protested that the Bill was icing allowed to go through the House Svitliout members having a sufliciont knowledge of what was happening. r The Hon. J.: ALLEN said ho had examined the Bill, and lio saw no reason )vhy the Bill should not pass. Tho Bill V>;as quito clear on tho point that Mr. Ell had raised. Tho notes would be 'payable in gold at tho office of tho bank, at tho place of issue, and also at the ■Jioad office of the bank in Wellington. ; J lho Bill was a safe one for the Dominion; . .. SIR JOSEPH WARD (Awarua) said it\had,been deliberately arranged when jtho general*banking law of New Zealland was framed that tho big gold.reserves should bo held in Wellington. -This had been designed in order to safeguard the bank in tho case of a'run at 'oil isolated office, and it had been arranged also that all notes should be ipayablo in Wellington. Notes wero paid on presentation any[where, but in a time of crisis the banks Iliad the right to ask that tho notes bo F-paid in Wellington. Ho believed that ! the bank was a strong bank, and that 'it would not be a bad thing to have another bank in this country. Ho was satisfied to see another bank opening, .-provided it opened on tho samo footing in'regard to the'privilege of note issue the other banks. The General Question. 'i Mr. 'A. S. MALCOLM (Chairman of the Committee) said the Committee hud ijieaiii flue tavkiua experts representing other banks, and nnd been i'iiformed that tho Bill was not dangerous. ■ Tho Committee had considered tho Bill most carefully. . Mr. A. - HARRIS ' .(Waitemata); said ■ there was no provision in the Bill to prevent tho bank from issuing all its notes in Wellington, nnd ma>king them all'payablo in Wellington. Mr. A. H. HINDMARSH (Wellington South) said he would liko -to see tho Government face the wholo question of banking, and he' thought they should adopt the Canadian system by which the gold reserve of tho banks was held by tho Government. The result was that the Government got a great ■ deal of money for nothing; rnd the customers of the banks had tho advantage of greater security. I The Hon. J. A. MILLAE said he jvas sorry to seo that an important clauso giving an unlimited liability on noto issue had been struck out of the Bill. -;Mr. Allen:- 'That clauso . was not operative." ; . ;l ; ' f ■ ,;Mr. Millar' said that the commercial community- would nover bo adequately safeguarded until the bank , took ovor the solo right of note issue, and with it tho., Government.would havo'to take the right to bo tho sole purchasers of gold. "Tljen the-banks would : havo to buy from .'the Government to remit when tho balanfco'of trade ' was .against US. — ' ' '." " ; ' " fFrrie Competition. -Mr. T.- Jf. GILFORD (Butt) asked the .Prime'.Minister whether.ho intend-; cd to .'.introduce any legislation this session. In his opinion, banking was tho greatest monopoly in this coun-ti-y. - If bunking legislation were brought down ho woukl move to introduce a clause practically bringing in freo trade in banking., • t.» ,Mr. aiassey: What 'do'you'incan by freo trade? ;Mr. Wilford: Allow oxtra banks to bo established in tho country. Mr. Massey: Without coming before Parliament? Mr. Wilford: Oh, no, but, with tho sanction of Parliament, 1 would provide that '20 banks if necessary might start in this country provided they were sound .financial institutions. Ho added that the restrictive clauses in. tho present Banking' Act made it difficult for new banks to" start in business here. Tlio PRIME MINISTER said that ho held in' his 'hand a Governor's Messago, introducing th^ 1 Bank of New Zealand Bill. Probably .it would be introduced that afternoon. Ho agreed thoroughly with the opinion in regard to competition in banking,, hut ho, knew of no restrictions 'which would prevent any sound financial institution' coming in and entering the banking business in this country. So far as tho banking business was concerned ho considered that the moro competition there was the better, so long as Parliament satisfied itself-that each bank coining into tho country had sufficient behind it in the way of assets. . . Mr. C. E. STATHAM (Dunedin Central) said that Parliament had no power to vary tho liability of bank shareholders living out-side New Zealand. It was for . this reason that tho committee had struck out certain.clauses. Mr. W. A. VEITCH (AVangnnui) said that he would offer no strong opposition to tho Bill, because it might do something to provide an element of competition between the banks. Ho had no proof of the fact, but was firmly of opinion that the existing banks understood one another very well. He would have preferred a Bill giving tho Government more control over the bank than it had at the present time. When the House, came to_ deal with general banking legislation it should apply the samo principle to other banks.. What About the Employees? Mr. C. A. WILKINSON (Egmont) said that ho thought Parliament should before passing this Bill seo that the • emplovces of tho bank wero adequately protected. In the Now Zoaland banks an omployeo who left tho service was paid baok all his contributions, but in at least on© Australian bank, tho Bank of Australasia, not one penny of the moneys paid by an officer to the pension fund was ever paid to him when he left the bank bofojo tho retiring ago.

Tho officers had no control over tlio funds, and he thought it was time that tho State should insist npon having somo control, in order to protect, the interests of employees of certain banks. I)r. A. K. NEWMAN (Wellington East) said that one of tho causes of banking trouble hero. was that most of the banks were controlled by people whoso chiof interests were outsido of this country. These people naturally looked upon Now Zealand as a place in which to make money, and when the funds of tho bank wero needed to protect their interests. elsewhere, tho money was at once withdrawn from Now Zealand. This bank would be in. tlio samo position. Of course, tbero was a ring in bankiug in New Zealand, j There was a ring in everything hero. Ho regretted that tho new bank was not a Now Zealand bank governed by New Zealand diroctors. He hoped that in futuro sessions more banks would como forward with their main interests in New Zealand, and not in Australia or Eugland. Ho attached no importance to the opening of this bank for business here. Mr. A. M. MYERS (Auckland East) said tho Bill simply followed tho lines of tho charters given to other banks in New Zealand. Ho repeated that tlio committee had gono very exhaustively into the Bill, and had been assured that the Bill ought not to bo treated in a hostile manner. As to Mr. Wilkinson's remarks, ho thought they might liavo been bettor deferred until the Prime Ministor brought down his Bill. Ho was glad to bo able to say, however, that this particular bank had provided adequately for its employees. He did not think there was much in the point raised by tho member for Christchurch South. It had been the rule in tho past that all notes should bo payable at Wellington; but it had been tho invariable practice to pay notes wherever they wero presented for payment. j The report was adopted. THE DEFENCE COMMITTEE. Mr. T. H. DAVEY (Christchurch East) asked the Prime Ministor, in the absence of the Defchco Minister, when the Defence Committee set up this ses- ! sion would be called together. | Tho Hon. W. F. MASSEY (Prime Minister) said he was sorry iie was un--1 able to answer tho question. Ho would, | however, make inquiries, nnd let Mr. I Davoy know when it ■would bo called | together. Tho Committee_ would certainly meet again tins session, im6 unSotUmidcty a peat deal of the Hon. J. Allen's time was taken up with the Royd Garlick Committee. Owing to the absence of the Minister that afternoon at ;tho Committee,, the Bank of New Zealand Bill would not be introduced.