A BANKING BILL

Dominion, Volume 7, Issue 2214, 29 July 1914, Page 4

A BANKING BILL

GUARANTEEING NOTE ISSUE IN TIMES OF CRISIS. The Hon. J. ALLEN moved the second reading of the Banking Amendment .Bill. It was being introduced, he said,at a timo when {here was not the slight-, est danger of any bank failure, in order, to provide'. against any future contingency. It provided that at any timo tho Governor-in-Coimcil could by proclamation make bank notes legal, tender. This would obviate the necessity for doing what had to be done in New Zealand at a time of crisis previously—tho passing of hurried legislation: He was advised by the leading financial institutions that this was a proper proposal 'to make to Parliament. "'. SIR JOSEPH WARD (Awarua) supported the Bill strongly; »as being a proposal likely to obviate crises brought about by-rims on banks. ' Mr':: J. PAYNE (Grey Lynn) declared that tho Bill was "another trick of Tory robbery." He said' the Government were taking risks, in their, undertaking to,redeem bank notes in gold, for which risks they would, got no return. 'The credit and gold of the country was to be used to back private financial'institutions in times of stress, and in prosperous times : tho State would not share in the profits made. He advocated the establishment of a State hank. . :'.' Mr. T. M.'; WILFQRD (Hutt) asked to. what extent the Government would be liable to make good tho failure of a bank'.to redeem its note issue. Ho, would hot like.to,-see the banks get a •blank.cheque guarantee. ;V Mr. A. H. HINDMARSH (Wellington 'South) urged that tho Minister should bring in. a comprehensive measure <m the .linos of-.the Canadian Act.- . ; Mr. W. A. VEITCH 1 (Wanganu.i) disapproved :of, the Bill. If tho State was to shoulder all the risks, tho State should run the banks, and take all tho profits. He hoped the Bill would not bo'.passed in its present form. Mr. T. K. SIDEY (Dunedin South) asked whether the Minister- would raako provision in amending tho banking legislation of, the country to remove some of the difficulties in the'way of any bank, not now in Now Zealand, establishing itself in business here. Now tho expenses wero heavy, and the. tenuency was to, conserve tho banking monopoly undoubtedly existing'Jipre. . ■'•'■ '" "Slj" , Mr. J. CitAIGIE (Timaru) said ho would make-it a 'plank of his election platform; tbat' tho Government .should take over and run' tho Bank of Now Zealand as a State bank. „..Mr. P. C. WEBB (Grey) opposed the Bill.••;.' l '"". ' ■■:.'•" Mr. H. G. ELL (Christchufch South) approved 'of the Bill, saying that it would make for greater stability in our banking, business. v Tho-Hon. JAS. ALLEN said'that ho was glad to hear that the member for Christehurch South did not advocate an unlimited issue of ; bank-notes. . The, member.for Hutt apparently/did so. • ; Mr. Wilford: Oh, no:,' ".'.'-" . Mr. Allen 6aid that he had so understood the lion. 1 ' gentleman's, remarks. Mr. Wilford had suggested .safeguards. Adequate safeguards werp,already contained in the 8i11.,;' As. ; a. matter of fact, the responsibilities of the State under this Bill were, -practically nil. Like a Bill passed on. a former occasion; this one was intended only to meet a possible emergency—to ensure that a, disaster did not occur at an inopportune moment.' The Minister denied that banking | under tho .present law in this country ,was a monopoly. Tho v law made adequate provision for tho admission of additional banks, and as a matter of fact a new bank had recently established branches in this country, and, so far as he knew, without any great difficulty, or expense. There'might be need for some amendments in banking law, but the present Bill was intended only.to make provision for an emergency at.some future time, when, possibly. Parliament might 'not be sitting. . Mr. Allen denied thatl the Bill would beriofit-bank sharehold- ' ers.; It was designed to protect tho general public and 'bank customers. One object of the' Bill' was to prevent the fiuances of'local public bodies being. embarrassed in- times of crisis.' I