CENTRAL BANK

Hokitika Guardian, 27 September 1932, Page 5

CENTRAL BANK

PLAN OUTLINED

SIR 0. NIEMEYER'S/SCHEME.

(Per Press Association — Cnyright. )

■WELETNGTONy'.September 26. Regarding the adoption of Sir O. Niemieyer’s proposal for a central bank by the Government, his report was to the effect that there sliould be a central hank with the .'sole right to note issue in the Dominion. Shares for the central reserve hank would be open to public subscription, and the bank would also hold the reserves of the Government of New Zealand. Summarised, the recommendations of Sir Otto Niemeyer were :

(1) That permanent legislation should' be passed making the New Zealand note inconvertible in New Zealand but convertible into sterling at rates fixed within certain limits.

(2) That an independent Reserve « Bank should he set up charged with responsibility for the stability :of New Zealand currency, invested with the privilege of note-issue, and charged with balding the Government account and bunking reserves of New Zealand.

(3) That the note-issue should be unified and flofteentrated in the Re* / serve Banlcr th© note-issuing powePr * of existing banks being abrogated. (4) That the trading banks should be required to transfer to the Reserve Bank the gold they now held in New Zealand in exchange either for Re- - f= serve Bank notes with which they can pay off their own notes, or for credit -y; at the Reserve Rank. .

(5) That the trading banks should he required to keep with the Re servo Bank minimum reserves of 7 per cent, of their demand liabilities in New Zealand and 3 per cent, of their time liabilities in: New Zealand.

(6) That thereafter the existing prohibition on the export of gold coin from New Zealand should be withdawn. ’ • y ' ■ ‘ ' ■/• '