THE SESSION CLOSES

Rotorua Morning Post, Volume 2, Issue 404, 13 December 1932, Page 4

THE SESSION CLOSES

I Toward the end of the sitting j just concluded the Government j introduced two of the most imi portant measures it' has bronght i down this session. These were j the Reserve Bank of New Zeai land Bill and the Small Farms j (Relief of Unemployment) Bill. Both bills contain principles which may have far reaching j effects on the economic life of i the Dominion. The establishment of a central bank has been in the mind of the Government since the proposal was first advanced by Sir Otto Niemeyer in February 1931, and it is interesting to note that the bill which has juiSt been introduced jfol- | lows very closely the suggestj ed legislation he appended to his report. "• The Small Farms (Relief of Unemployment) Bill is the result of a recent confereiice between the Minister of Public Works (the Rt. Hon. J. G. Coates) and the heads of jvarious State departments, and | it is a variation of the "usehold" | policy which some years ago was | advanced by the Labour Party. j In deciding to set a central rej serve bank, New Zealand is fol- ; lowing the example of South ! Africa, which has had such an j institution since 1921. The prinj cipal functions of a central bank ! may be summed up as follows: (1) To serve as a bank of issue and assume responsibility for maintaining the currency on a j solid and secure footing, for j which purpose it is granted to sole right of note issue or at any rate a partial monopoly thereof ; (2) to act as a reserve | bank and hold a large part of I the cash reserves of the eom- | mercial banks, either by law or | tradition ; (3) to operate as a clearing house for the other banks; (4) to act as a bankers' bank and rediscount bills of exchange, promissory notes or other commercial paper presentecl by the commercial banks; (5) to undertake that it would endeavour to maintain the entire credit structure on a sound basis and control the volume of credit, in which respect it should seek to bring about the contraction or expansion therof in accordance with the needs of business and in the interest of national i economic welfare; and (6) to act as the sole or principal banker or financial agent generally of the Government, holding Government balances and flnancing the Treasury at certain times in anticipation of heavy tax collections by means of advances or discounts of Treasury bills. The proposecl New Zealand bank will have the sole right of note issue and be the sole banker for the Government. In no way will it carry out the functions of a commercial bank and except for the fact that monthly returns o'f its operation will be published, its operations will probably pass unnoticed by'the general public. The bank is to be free from political influence — Sir Otto Niemeyer was very empha- , tic about this — and the Labour Party will probably eondemn this aspect of the proposal in the strongest terms. It is the contention of the Opposition that the monetary and credit structure of the country should be governed by the representatives of the people. Up to the adjournment Parliament had given its assent to twenty Government bills and three local bills. T.he most important of the Government measures was the Customs Acts Amendment Bill^ embodying the decisions of the Ottawa Conference, .the Urban Farm Land Rating Bill and the Hospitals and Charitable Institutions Amendment Bill. The remaining bills were inostly of a mtachinery nature. There are fifteen bills still on the order paper, and these include the Government Superannuation Funds Bill, the Electoral Amendment Bill, providing for the permanent extensioT^^h^^^o^JmjliamenL

land Bill, and the Small Farms (Relief of Unemployment) Bill. The disposal of these will take some time, and Parliament, when it meets again will also be required to give consideration to the decisions made by Cabinet dtiring. the recess. Thus there is every indication that it will take sevefal weeks to disgjMs^^h^ftgi|latioi^|thej^^