N.Z. RESERVE BANK

Hokitika Guardian, 24 November 1933, Page 5

N.Z. RESERVE BANK

LONDON CRITICISM

“AN UNDESIRABLE FEATURE.”

1 United Press Association—By Electric Telegraph— Copyright.)

(Received this day at 10.52 a.m.) LONDON, November 23

Commenting on what it describes as “an undesirable feature” of* New Zealand’s Central Bank Bill, the ’'Financial News” says that although there might ■have been s°me justification for commandeering the , reserves of domestic bank 6 m 1914, there is certainly none now.

Firs-ly it is extremely unusual, and not a little discreditable, for any Government to confiscate property belonging to foreign institutions -and the fact that New Zealand regulations may «ave oeen partly responsible for ownership, is neither here nor there. Secondly, since the Government Lself has r.:-Ken a direct hand in depreciating currency, it has thereby diminished the value of the banks’ net assets. Gold was the b nks’ only protection. Any increase in value may be considered in equity to belong to them, bub the most important of all, is the fact that since 1914, there hn s been an embargo on the export ol j gold coin. I So, for nineteen years the »an*<s' have been icompelled to keep a large part of the funds locked, although the obligation -to make- payments of gold was Suspended, and gold has no relation to the currency system. In these it can scarcely be said what sort of asset the banks’ gold can be considered. It seems to be an “nvestment” like anything else.

TV> inosb people here it will seem that these ingenious theories serve principally to cloak the fact that a windfall profit of nearly £4,000,000 in New Zealand currency tempted th e Treasury too much to let that profit remain where it properly belongs.