INDEPENDENT BANK

Sun (Auckland), Volume IV, Issue 938, 3 April 1930, Page 11

INDEPENDENT BANK

CONTROVERSIAL SCHEME IN AUSTRALIA BILL INTRODUCED CANBERRA, Wednesday. A Bill providing for the establishment of a Central Reserve Bank was read a fir time in the House of Representatives today. It is likely that it' will cause considerable controversy. The proposal is that the bank shall have an independent directorate, to include one representative of Labour. The proposed capital is £2,000,000. The Bill provides for the bank to have complete control of the note issue, and to be empowered to buy and sell in the open market cable transfers, also to buy, sell, discount, or rediscount securities. Another provision is that the bank shall act as agent for. the issue of loans on behalf of the Commonwealth and the States; make advances to other corporations; buy, sell, and deal in specie. But it would be forbidden to make advances against land, or engage in trade, or to purchase shares in trading companies or other banks. Under the provisions of the measure the private trading banks would be required to establish and maintain in the Reserve Bank’s reserves balances of not less than 10 per cent, of their demand liabilities within the Commonwealth, and 5 per cent, of their true liabilities. One clause provides that Australian notes may be printed and issued in denominations of ss, 10s, £l, £5, £lO. or any multiple of £lO. Private banks would be required to keep a record and furnish a return of banknotes in circulation.