RESERVE BANK

Evening Post, Volume CXXX, Issue 83, 4 October 1940, Page 6

RESERVE BANK

USE BY STATE

QUESTION OF REPAYMENT

The use of the Reserve Bank by the State was referred to. in the House of Representatives last night by the Rev. A. H. Nordmeyer (Government, Oamaru), who said that the Bank had already been called upon to find the sum of over £27,000,000.

The Hon. Sir Alfred Ransom (National, Pahiatua): Will you pay them back?

Mr Nordmeyer: I am not concerned about that aspect. (Laughter.) I r No one could determine beforehand the amount of Reserve Bank credit which it was safe to have in circulation at any one time, he continued. It depended upon the circumstances existing at the time and the volume of goods and services available. The Government could extend even further the use of the Reserve Bank and would do so for housing purposes and for other services as circumstances arose. The most ardent monetary reformer in New Zealand would concede that no matter how anxious they were to use the Reserve Bank and its credit facilities, they could not without disaster extend them beyond the point where goods and services were available. His own personal opinion was that they had not reached that point yet. Mr. Nordmeyer said that he could see a time coming after the war when, in order to maintain the security and stability of the Dominion and to keep the farming community from disaster and bankruptcy, it would be necessary to call upon the Reserve Bank to an extent not hitherto availed of in order to maintain our financial and economic system. "LOSING THE PEACE?" Mr. J. A. Lee (Democratic Labour, Grey Lynn): Are you going to lose the peace? Mr. W. S. Goosman (National, Waikato) said it had taken the Government twelve months of war to make up its mind what it was going to do and during that period the people had been kept in a state of anxiety. Referring to Mr. Nordmeyer's statement that he was not concerned about whether the Reserve Bank would receive repayment for the money it advanced, Mr. Goosman said that it was tantamount to saying that there was no intention of paying back the money. Labour voices: Be fair. The Prime Minister (the Rt. Hon. P. Fraser): You cannot get away with that. Mr. Goosman: I say I have got away with it. (Laughter.) I Continuing, he said the Government had got away with £27,000,000 from the Reserve Bank and the member for Oamaru had informed the country that I there was no intention of paying it' back. There were further cries of "Be fair" from the Government benches interspersed with a chorus of "No, no."