RESERVE BANK

Evening Post, Volume CXVI, Issue 102, 27 October 1933, Page 8

RESERVE BANK

DEBATE RESUMED

POSITION OF CONTRACTS

A MEMBER'S CONCERN

Accorded urgency, tlio second reading debate on tho Reserve Bank of New Zealand Bill was resumed in the Houso tit' this morning, four additional speakers having participated up to tho luncheon adjournment. At that stage no division had been leached on the hostile Labour amendjnent. According to Captain H. M. Bushworth (Country Party, Bay of Islands) there was a great " deal of anxiety throughout New Zealand concerning the proposals in the Bill. For instance, he claimed, it would be possible for the people controlling the issue and retirement of money to cause, by periodic inflation or deflation, prices to fluctuate, and, by buying and selling gotods with the prior knowledge of how prices would rise or . fall, they could make any amount of money. The Government was determined to "steamToller" the Bill through Parliament without the consent of tho people. Captain. Bushworth said that in law, contracts could be held to bo null and void if it were disclosed that information had been withheld. That would bo regarded as fraudulent misrepresentation. Ho argued that if a successive parliament attempted to amend the rceervo bank legislation and it was raised as a plea that contractual relations Jiad been entered into and if material information concerning those contractual relations had been withheld from it!ie House, the reply would be that those contracts should bo declared null tmd void because of fraudulent misrepresentation. ■ The Minister of Fmaneo (tho Et. "Hon. J. G. Coates): That is just a susCaptain Bushworth: Yes, but I think jthe suspicion is justified. . The point was made by Captain Bushworth that the Government would liave on the directorate of the Reserve Bank a smaller number of nominees than it had on the board of directors of the Bank of New Zealand. As the Government had been unable to supply cheap credit through the latter bank, how could it achieve that result through an institution where its influence was even less? • Examination of the. effect of-reserve banks m other countries revealed a trail of ruin. The interests of international financiers and not those of the people had been served. The question as to whether one Parliament could bind its successors was one of tho most important points the debate had- raised, said Captain Bushworth. In theory he agreed with the contention that it was not possible for ono Parliament to bind another, but in practice it was continually given effect to. It was a fact that contracts of various forms were being constantly entered into by Parliament with other countries, other Governments, and with individuals. Those contracts had a sanctity, ana if Parliament could not enter into contracts that would bo binding on its successors, it would find its functions circumscribed considerably. Per media of contracts Parliament hound its successors. It was clear from the Bill that tho new bank ■was'to bo empowered to enter into ' contractual relations with ■ the Bank of International Settlements; and he asked the Minister to give the House au assurance that in no circumstance* would the' bank bo allowed to Jfave any contractual relations with any bank or organisation outside New Zealand. "CONSTITUTIONAL METHOD." ! Mr. W. E. Barnard (Labour, Napier) said that while he was in general agreement with Captain Bushworth, he considered he was guilty of a slight exaggeration of languago when he suggested that failure on tho part of the Government to exercise the sovereign rights of tho people to create, issuo, and retire money brought it into the region of . high treason. At no time In the history of New.Zealand had a Government ■ exercised its sovereign rights in that respect, and thereforo it could not be said that the Government had given that right away. Captain Bushworth had said that if the schemes of the high international financiers succoeded, it would require a world-wide bloody revolution to' free the people from-the net; but he dould assure the member for' the Bay of Islands, in the name of tho Labour Party, that the Keserve Bill was regarded by it as being alterable in every respect by the ordinary constitutional methods. The Labour Party, as the Government of New Zealand, would not hesitate to amend the Bill in whatever way it deemed necessary for the purpose of giving effect to the policy of the party as indicated in the Opposition amendment now before the House. Mr. C. H. Clinkard (Government, Botorua) said there wero some "little. New Zealanders" who wanted to know Why tile Dominion could not go in for a policy of economic self-suffici-ency. That was impossible under present economic conditions. He considered the Bill was a tremendous improvement on the original draft, but he hoped that an alteration would be made providing that the governor and deputy governor of the bank should be appointed by the Government for all time. Mr. F. Langstone (Labour, WaimaTino) said there was no reason for hope that the Beserve Bank would depart from the present obsolete system of banking. It would bo controlled by rrien with the same ideas as those controlling the existing banks. Ho contended that New Zealand required a completely new banking system, definitely linked to goods, and services art New Zealand, and not controlled by outside influences. (Proceeding.)