N.Z. RESERVE BANK

Hokitika Guardian, 26 September 1932, Page 5

N.Z. RESERVE BANK

IS TO BE SET UP ON SIR 0. NIEMEYER’S PLAN. (Per Press Association — Copyright ,)j PARLIAMENTARY BUILDINGS, (September 26. The Government has decided, according tc a statement made by the Rt. Hon. G. W. Forbes yesterday, to set up a Central Reserve Bank. It is to be one on lines of Sir Otto Niamey or’s report. This means that the new institution will be one outside of political control. It life/ understood that the Labour Party’s contention will be that as such a bank is to b e outside of the control of Parliament, there is . really no guarantee that it will act in the interests of the people.

In view of the Government’s announcement it is interesting to note the introduction of a Currency Bill by Mr Mason (Auckland Labour Member). Th© , main proposals of this bill are that notes shall be issued by the .State under the control of the Auditor and Controller-General, and that they shall be issued through the banks and to the Stat© Advances Office, Th© quantity of note© in circulation, Mr Mason explains, would under this measure, be increased, op diminished, according to the variation from time to time in the general love) of prices, In th© Bill, the value of the Domin, ion’s export commodities is to ,be taken as the tost of the general level of prices, the reason being that New Zea. land’s depressions ar© caused by a diminution in the circulation of money, arising out of the fall in th© prico c .f its export commodities in the overseas market. The note igsu© control is intended to stabilise the amount of purchasing power distributed through th© exporters. ‘ ' ‘ • Mr Mason holds that the result should b e stability of prices and of business activity. The point chosen as the basis for the fixing of the- price level is the average of th© prices during the comparatively prosperous years from 1923 to ,1929. , ,

* FUNCTION OF RESERVE BANK. SHARES OPEN TO THE PUBLIC. "• • WELLINGTON, September 25. Legislation is to be introduced during 'the present session of Parliament to provide' for the establishment of a Central Reserve Bank, in New Zealand. The Prime Minister said that, with modifications as the resu t both of inquiries made by Mr Coate3 an Ottawa and the Minister of Finance, Mr Downie 'Stewart, •in England, legislation would be introduced giving ef* feet to the general (recommendations of Sir Otto Niemeyer, whose report oh the subject has been receiving th© con* sideration of the Government for some time, The main recommendations made by Sir 0, Niemeyer in his report on banking and currency in New Zealand was that a Central Begerva Bank should be established in Now Zealand with the sol© right of note i?.su e in the Dominion. The shares for the Central Reserve Bank will be open to public subscription, and th© bank will also hold tho reserves of the Government of New Zealand.