POLITICAL CONTROL

Evening Post, Volume CXVI, Issue 102, 27 October 1933, Page 6

POLITICAL CONTROL

(To the Editor.) Sir,—The wonderful array of Press and other .opinions on the merits and demerits of the Central Bank Bill all more or less converge on one issue, namely: "Freedom from political control," which all emphasise as a first essential without offering one iota of constructive reasoning why this so-called "freedom" is necessary. "Will you, Sir, or any of the advocates, answer the following questions? Has the elected Government of a nation tho right to control the activities of all citizens, in conformity with the common good? If so, has it any authority to justify the exemption of any citizen or group of citizens from such control?— l am, etc., d. Mclaughlin, Treasurer, N-U.U. [A direct answer cannot be given to' the correspondent's questions, because thoso questions assume that all control is for the common good, and that the citizens engaged or interested in banking are a singular exception to the general rule of control. It ie not generally accepted that such far-reaching State control, circumscribing individual freedom and discouraging personal initiative, would be beneficial; nor have attempts been made in British countries to apply it to commerce, labour, and industry. So far from being exempt from control, the banking is under more exacting regulation and supervision than almost any other form of activity. No person or group of persons' in New Zealand may etart banking operations without special sanction and must conform strictly to the law of banking, including the provision for publication of returns of business. It is not pro- i posed that a Reserve Bank should be freed I from such obligations. On the contrary, the duties and the method of assuring fulfilment of them are prescribed l,in detail. What is proposed is a system which will guard an important financial institution against sudden enforced changes of policy, dictated perhaps by persons without expert knowledge of banking, and destructive of public confidence. Seasonable continuity of banking policy is essential to financial stability, and that cannot be assured if there is a risk of'radical change whenever a political change (due possibly to quite different causes) has occurred.— Ed.]