N.Z. RESERVE BANK

Hokitika Guardian, 13 September 1933, Page 5

N.Z. RESERVE BANK

LONDON COMMENT PRESS FAVOURS PROPOSALS. 'United Press Association—By Electrin Telegraph—Copyright) LONDON, September 11London papers are generally sympathetic towards the proposals for a reserve bank for New Zealand. The “Evening ’Standard’s” city editor writes : It- is evident that Ns"’ Zealand’s scheme is on ; sound lines. A central bank, which shall net only from economic considerations, and whose management will be bound to look only to the mated J welfare of the country, is definitely the aim of the Bill. Certainly, a Central Bank if kept on the lines laid down would j facilitate business between the London money markets and the Dominion. ! and would also at times be able to J drive hard bargains with London in regard to financing operations; A welcome detail of tbe scheme is the limitation of dividend on shares to the, maximum of five per cent. , I The “Financial News” welcomes the proposal to reintroduce the Bill j and refers to the fact that the Finance Minister was careful to point out the establishment of the Bank would not involve surrender iby the State of its right to determine the monetary policy, and while that i- q true in the last -resort, one of the main objects of the establishment o* the Central Bank is to ensure that expert judgment, and not political pressure or section self-interest, shall i control monetary policy. j The “Morning Post” city editor is I sympathetic to the proposal, but J Stresses the ‘importance- of 'reserve ; banks being entirely independent of: State control.

The “Financial Times” says: Criticism has been -directed mainly at the pa.rt of the measure designed tn curtail the functions of fr'ding banks, and to. the .relation of currency *tnd credit .pdliev to that of the Bank of England. The first of these criticisms has long since been met. Regard the second point, it is evident there is some difficulty in the minds cififiics im distinguishing between cooperation. wRh, ami subjection to. the monetary poliev of the Mother Country. The establishment of a Deserve -Bank no more implies' donmvtuyj of New Zealand affairs bv outside interests than does the linking with', sterling- of the exchange of certain foremn countries govern the economy -of the latter. The article continues hi further terms of approval of the prnposil, as An important development, in the greater Empire unity, and concludes ; Necessarily, international bunking co-operation cannot be entirely free from political considerations, which is not the same thing as State control,