CENTRAL BANK

Hokitika Guardian, 22 April 1933, Page 2

CENTRAL BANK

CONTROL DISCUSSED

FEARS OF FARMERS’ UNION

WELLINGTON, April. 19

At a meeting of the Dominion Executive of the New Zealand Farmers’ Union to-night, fears were expressed that the proposed central bank might be controlled by financial interests. Mr F. Colbeck said he could not see how a central bank was going to benefit the. farmers of the Dominion. He said it would be extremely unwise to hand over the sovereign rights to the people for 25 yeais.'

The executive decided to leave the question in the hands of a special committee.

The Minister for Finance, the Rt. Hon. J. G. Coates, wrote stating that the sole purpose of having : private shareholders was to provide a nonpolitical franchise for the election of the hoard of directors. All world authorities laid great emphasis on the point that the difficult task of controlling credit and currency should be entirely free from the unsettling effects of politics. If the bill was carefully studied it would be seen that adequate safeguards had been provided against banks or any other financial concerns Obtaining control of the banks through buying up shares. In the first instance it should be noted that shares must be held by individuals, and companies could not hold shares at all, Secondly, the shares were to bo allotted in the first instance by the Minister for Finance, and the voting power that might be exercised by any one person was definitely limited. Shares could only be held by persons ordinarily resident in New' Zealand. A further safeguard would be found in the provision by which not more than one of the directors might be the director of any other bank while the of other banks were not eligible for appointment. From closer examination of the proposals there would be no occasion to fear that the ! reserve bank- would be in any way * dominated by joint stock banks.

(At the instance of the North Taranaki branch, the executive decided to ask Parliament' to set. up a committee to make a full enquiry into the'present monetary system. ‘ Mr H. O'. Meisopp (Auckland) said he whs convinced that a monetary system could be put into operation which would get New Zealand out of her difficulties within six months.