BANK OF NEW ZEALAND.

Dominion, Volume 7, Issue 1894, 31 October 1913, Page 4

BANK OF NEW ZEALAND.

THE BILL REPORTED. HOSTILE AMENDMENT REJECTED.

/ Mr. J. B. HINE (Chairman .of the Public Accounts Committee) reported for the committee that it had considered tho Bank of New Zealand Bill, and recommended that it should bp allowed to proceed with'amendments. . SIR JOSEPH WARD (Loader of the Opposition) said that ho was of opinion that the Bill should not have been gone on with by the Public Accounts Committee without a representative of the Government being present. Tho Minister of Finance, who was unfortunately unwell, should havo boon present when tho Bill was under review. Feeling sure that the Bill would not be gone on wjth in the absence of the Minister of i Finance, he (Sir J. Ward) hud not attended tho committeo that ■ morning. All that he could nay was that the Bill would raise discussion. As a result of the absence of the Minister, somo amendments would be moved which might have been kept away from the House .altogether, and discussed before the Public Accounts " Dr. A. K. NEWMAN (Wellington East) said that the Bill had been beforo tho Public Accounts Committee time after timo, and had beon gono through again ■and again. The absence of the Minister at tho final summing up that morning was of Ino importanco whatever. The committee, that morning, had made only a few verbal amendments. In any caso, when the Bill camo beforo tho House, members wero bound to be full of ideas about it, and tho final decision rested with tlio House. Tho PRIME MINISTER said that after tho speech delivored by Dr. Newman, who was a member of tho Public Accounts Committee, it was scarcely necessary for him to speak. Ho hardthat the Leader of the Opposition- was'-justified in complaining that no member of the Government attended tlio meeting of tho Public Accounts Committeo that morning. Sir Joseph Wajd knew perfectly well that the Finance Minister was indisposed and unable ,to go on with his Parliamentary duties. As to the Bill, ho was of opinion that, if possible, it Bhould have been passed weelcs ago. The commercial community wero looking for it with a very great deal of interest, and looked upon it as ono of the most iriiportant Bills of the session. Practically, the wholo of the clauses in the Bill, if not the wholo of them, had been considered by the committee before it sat that morning.

. Royal Commission Proposed. Mr. J. CRAIGIE (Timaru) said that upon the Public Accounts Committee ho had been in a minority of one in opposing the clauses of the Bill providing for an increaso of capital. Ho moved as an amendment: "That this House is of opinion that the Government should set up during tho recess a Royal Commission representative of tho commercial, agricultural and industrial classes of tho community to inquire into: "(1) Tho relationship between tho State and tho Bank of Now Zealand as now existing, and to submit recommendations as to tho manner in which tho present capital interests can bo best adjusted with a view to. promoting in the n<osb effective .mariner tho permanent interests and futuro prosperity of tlio Dominion. "(2) Tho desirability of tho Government taking steps to have tho bank State-owned and managed, and if desirable, what terms and conditions would be fair and reasonabfo in the interests of tho Stato and tho privato shareholders. . "(3) Whether it is desirable in the interests' of the Stato to establish an independent Stato Bank, and if so what proposals' or steps should be adopted to bring this about." Mr. Craigio went on to stato that, the shareholders were evidently not satisfied and ho thought that tlioy had a just cause in protesting against the preponderance of Government representation on the directorate. In his opinion it'was not rigiit that the Government should be associated with an institution that was paying such high dividends as tho Bank of New Zealand was at the present time. If it were not that largo sums had been paid to rcsorvo in recent years the bank would liavo paid dividends of something liko thirty per cent. Mr. Craigio commcndcd the Bank I of France as a model for similar institutions. Soma members of thQ HousqJ

said that the Bank of Now Zealand should be acquired and run by tho State. Ho did not know enough about banking to say whether this was the right course, but he considered that this was tho proper time to move the amendment. It was right that the Government guaranteo of £1,000,000 should bo renewed, but the State's capital should not bo increased until full inquiry had been made. The PRIME MINISTER contended that it was not competent for a private member to move an amendment such as had been moved by Mr. Oraigio, although a private member could move to refor a report back to a committee. This objection was not upheld. Mr. J. A. I-lANAN (Invercargill) argued that the Bill was now before tlio House, and that it was therefore open to a member of the House to move ■ an amendment. Several Opposition members contended that Mr. Craigie's amendment was in order. A Useless Amendment. The Hon. J. A. MILLAR said that the amendment would be useless in the absence of a provision that the Bill should bo hung up while an inquiry was being conducted. Tailing this, the Bill would go through and would conclude an agreement between the State and tlio bank which would subsist for twenty years. Mr. H. G. ELL recommended Mr. Craigie to move that the Bill be referred to a Select Coinmitteo of tho House, so that something might bo done this session. The SPEAKER ruled that tho amend.ment was in order. Mr. D. BUDDO (ICaiapoi) seconded tho amendment, ajid said that ho did so because he considered that the proposals in the Bill had hardly been considered at fill by tho general public. The Bill had come in tho first instance from tho bank directors, and had been very little altered. He did not favour all that Mr. Craigie had proposed but considered that there should be an inquiry. To liia miiul every caro should be taken in a country liko this to avoid building up monopolies in our midst. Enormous powers wero granted to tlio bank by tho Bill beforo the House. Anything that could bo done to safeguard tho country's interests in tho future should be done. A State Bank. Dr. A. K. NEWMAN (Wellington. East) said that ho had a great deal of sympathy with tho amendment, because ho considered that tho banking . and financial affairs of the Dominion should be reviewed in a comprehensive way. In his opinion thoy had unsatisfactory financial arrangements in every way. Instead of bringing in this Bill, which was' only a fragment, the Ministryshould have'sot up a commission with a view to putting the financial and banking affairs of tho Dominion on a more satisfactory basis. Relations between tho State and tho bank should be properly defined. The Stato now owned one-third of the bank, and if ho had his way lie would accept tho offer of the shareholders and buy tho remaining two-thirds on behalf of the Dominion. He would then take £200,000 or £300,000 a year,, or probably later on £400,000 or £300,000 a year, and reduce tho taxation proportionately. (Opposition hear, hears I) No doubt this statement would give offence to some of his political friends, but since, the State conducted an insuranco business and others ho saw no reason why it should not acqniro a bank. Probably the two-thirds owned by private shareholders could bo obtained for about £175,000. The bank had accumulated sinking funds almost equalling that amount. He would pay the shareholders with tho sinking funds and then "tako the blessed bank."

Mr. Eraser: Brilliant financol Dr. Newman said that the directors of- four out of the five banks operating in Now Zealand were' foreigners, nnd did not consider tho interests or this Dominion at all. This was exceedingly unsatisfactory. . ', Sir J. Ward's Opinions. Sir JOSEPH WARD repeated his previous objection to the Bill'coming from tho Public Accounts Coinmitteo after being finally considered at a meeting not attended by the Minister of Finance. 'Die Bill, ho contended, should not be hurried through. Ho did not say that it ought to lie deferred uiitil next session, but there was no occasion for hurry. There was undoubtedly friction between tho Government and tho shareholders. Before tho committee thero had been a proposal to give tho shareholders a .majority on the directorate, subject only to a right of veto by the president or tho Minister. Ho believed that the best thing would'be for the Dominion to acquire the Bank of New Zealand entirely, but he did not think that it should be done in a hurry. That it could bo done with safety was beyond all question. If taken over by the Stato the bank would not of course get rid of its obligation to maintain a gold reserve proportionate to tho amount of notes issued from timo to time, and a financial position of a thoroughly sound naturo. Ho advised Mr. Craigio to withdraw ; his amendment, and to move a similar one on the short title of the Bill in Committee. . Cup of Tea. Mr. G. V. PEARCE (Patea) said that ho wished to take exception as a member of the Public Accounts Committee to tho statements of tho Leador of tho Opposition. Sir Joseph Ward: "I am going to get a cup of tea." He then went out. Mr. Pearce said that Sir Joseph Ward could have attended the committee if ho had so desired. Ho urged that the amendment should be thrown out. Mr. H. G. ELL (Christchurch South) asked whether it was a decent thing t-liat a private member sh"buld be put iip to reply to the Leader of tho Opposition. (Government laughter.) Mr. SPEAKER- intervened with the statement that honourable members were all equal in that respect.

Committee of Inquiry Proposed. Mr. ELL moved a further amendment ■ providing that tlio Government should set up this session a Select Committeo to inquire into the relations between tho Bank of New Zealand and the State. Mr. G. W. RUSSELL (Avon) said that he was opposed to Mr. Craigio's proposal, and regretted that a discussion in rogard to tho Bank of Now Zealand should have been launched at that 'stago of the session. Tho effect if the proposal were adopted might bo to injure tho standing of tho bank in connection with a flotation of additional capital. Mr. llussell recalled tho fact that in 1895 he proposed that the State should take over tho Bank of Now Zealand. Tho proposal, ho said, was practicable then, but ho doubted whether it would bo practicable now. He advised Mr. C'raigie to withdraw his amendment, and to move it at a more convenient season. It had sprung a surprise upon members of the House. Mr. Fisher: It was not a kite? Mr.' Russell: Not from this side of the House. Mr. CRAIGIE said that it would be impossiblo to conduct a proper inquiry whilo tho House was sitting, but that if tho House thought fit he' would accept tho committee proposal mado by Mr. Ell. . , Mr. Ell's amendment was negatived oil a division by 45 votes to 18. A division \vas then taken upon Mr. Oniric's ainendmont, and it was negatived bv 41 votes to 21. The report of the Public Accounts Commitceo was laid on tho table.

rating amendment bill. Tho Rating Amendment Bill (Mr. Herries) was read a second time, pro forma, and referred to tho Native AfJaira Committeo.