RESERVE BANK

Wairarapa Times-Age, 6 October 1939, Page 4

RESERVE BANK

GOVERNMENT TO TAKE COMPLETE CONTROL PROVISION OF AMENDING BILL. ■ POWER TO VARY STATUTORY RESERVE. (By Telegraph—Press Association.) WELLINGTON, This Day. Complete control of the Reserve Bank is placed in the hands of the Government by t he Reserve Bank Amendment Bill, which was introduced in the House of Representatives by Governor-General’s Message early this morning. The Bill was read a first time, and will be discussed when the House resumes later in the day.

The principal clause in the Bill reads as .follows: “In the exercise of their powers and functions under the principal Act the Governor and the board of directors shall have regard to any representations that may- be made by the Minister of Finance in respect of any functions or business of the Reserve Bank, and shall give effect to any decision of the Government in relation thereto conveyed to the Governor in writing by the Minister of Finance.” There is an amendment to the provision in the original Act relating to the statutory reserve. This empowers the Minister by notice published in the Gazette to vary or suspend either absolutely or subject to such conditions as he thinks fit the minimum reserve of 25 per cent. Power is given for the revaluation of the gold coin and bullion held by the bank on the basis of the market value of fine gold, and for the transfer to a special reserve account of any profit obtained in this way. This profit is to be held on behalf of the Crown and dealt with in such manner as the Minister may determine. When the Bill was introduced, the Leader of the Opposition, Mr Hamilton, said there were evidently some far-reaching changes proposed. He asked whether the Minister had received the concurrence of the Governor or the board or whether he had gone over their heads.

“The Bill went down to the Reserve Bank a week ago,” replied the Minister of Finance, Mr Nash, “but it would be wrong to say that the Governor acquiesces in its provisions. I intend during the second reading stage, to set out the reasons for the bill.”