The financial sector of the New Zealand economy is heavily controlled by foreign interests. The financial sector controls credit and investment to a large degree in all sectors of the economy. Development of the economy, and society, in the interests of New Zealanders depends very largely on the use of money controlled by the finance sector of the economy. With foreign interests being predominant, and with the foreign corporations being large enough to dictate to New Zealand industries and even the New Zealand government, then New Zealanders can only expect the best if our interests coincide with those of foreign bankers, In many cases they do not.

There are four main types of business in the finance sector. They are Trading Banks (including their subsidiary Savings Banks), Merchant Banks, Finance Companies and Insurance Companies.

There are five Trading Banks, four of which are foreign. The foreign banks do 60% of the banking business in New Zealand.

New Zealand has six merchant banks all of which have substantial linls with overseas firms. Merchant Bankers raise large loans for development purposes, arrange short term loans particularly for importers or exporters, and provide working capital in the form of loans from one company to another. Merchant Banks are playing an increasingly crucial role in determining the type of economic development that occurs in New Zealand, and hence the type of society we have.

The top 13 finance companies in New Zealand do 90% of the business in this field. Of the top 1310 have substantial foreign links. These companies loan money for hire purchase, particularly on commodities like cars, invest in property (i.e. speculate) and industry, provide loans for the purchase of property and industrial equipment, and for property development (both high rise buildings and housing).

The insurance companies invest in industry, lend mortgage money to prospective home owners, and are also compelled by law to invest a certain amount in Government and Local Body Securities, as are all the other types mentioned. There are 76 insurance companies in New Zealand, 46 of them are foreign controlled. But of the largest 10 in terms of their assets, 9 are foreign controlled.

On the surface, it appears that there are a large number of sources from which to get finance for development. But a small number of men have control over the finance sector, and hence can determine what type of developments may take place by controlling the flow of investment and credit. How do they make their decisions? According to one executive of a transnational corporation, such a person must "set aside any nationalistic attitudes and appreciate that in the last resort his loyalty must be to the shareholders of the parent company, and he must protect their interests even if it might appear that it is not perhaps in the national interest of the country in which he is operating". Dr. W.B. Sutch commented on this: "From the viewpoint of the individual state the supranational frustrate economic planning. Governments have less and sometimes no control over the structure of their economy — what industries are to develop and at what level of performance. As others have observed, governments are expected to improve living standards, including the environment and social services at the optimum development of the individual; they are expected to promote full employment, keep prices more or less under control, and foreign payments balanced. Supranational firms are not very interested in these objectives."

What at first seems a bewildering array of financial institutions very quickly sorts itself out into subsidiaries of a few important banking interests.

ANZ Banking Group Ltd.

The ANZ is a British bank and is one of the largest banks in the world — number 70 in 1971.

In 1974 the Chairman of the ANZ was Sir Alexander Ross. He was also on the Board of United Dominions Trust Ltd., one of the largest finance companies in the world. This co-directorate expressed among other things the common interest these two companies have in UDC Group Holdings which operates in New Zealand. Between them the bank and the Trust owned 73% of UDC. UDC Group Holdings in turn owns United Dominions Corporation Finance Ltd., and it in turns owns 11 other companies mainly in the field of investment, hire purchase, credit and merchant banking. It also has a share in Allied Mortgage Guarantee Co. Ltd. whose other shareholders include National Insurance of NZ Ltd., NZI and South British Insurance. The two most prominent directors of UDC are Sir Clifford Plimmer and JR Cropper. Both these gentlemen sit on the Board of the Australian controlled insurance company AMP Society Ltd. This is the largest insurance company in New Zealand with assets in 1969 totalling $348.2 million. AMP has substantial investments in NZ Breweries, Wattie Industries, NZ Forest Products, and many other New Zealand companies. Cropper and Plimmer are on the Boards of the above mentioned industries, and over 30 others.

In this example, one Trading Bank, the second largest in New Zealand, brings into its orbit through ownership or having directors in common, a major finance company, a merchant bank, other finance and investment companies, and four insurance companies, especially the country's wealthiest, AMP Society Ltd. Also many of New Zealand's largest industrial concerns have links with the ANZ, its subsidiaries and their directors. Any new industrial undertaking seeking to get established in areas undesirable to people like Plimmer, especially in competition to one of his companies, could not expect to get its finance from ANZ or its associates.

The National Bank of "New Zealand" Ltd.

This bank is the third largest in New Zealand. It too is British, a wholly owned subsidiary of Lloyds Bank, the 30th largest bank in the world in 1971. The National Bank and Lloyds have dealings with the ANZ through a financial group in which they have mutual interests. Intercontinental Banking Services Ltd.

The National Bank has shares in General Finance (20%) the largest finance company in New Zealand. Other major share holders are Cable Price Downer and New Zealand Motor Corporation. CPD has on the Board Sir Clifford Plimmer and R.W. Steele. The former has connections with the ANZ and the latter is on the Board of General Finance.

General Finance has a 28% shareholding in Chase NBA Ltd., one of New Zealand's Merchant Banks. The other shareholders are the National Insurance Company of NZ which also has dealings with the ANZ, and the Chase Manhatton Bank which is controlled by US Vice President Nelson Rockefeller's brother David.

The executives of the National Bank hold 30 shares in a company called Arawata Investments. In spite of its small capital, this company owns a great deal of shares in New Zealand industry. It owns 2% of the shares of General Finance Ltd. and two director of the former company are also directors of General Finance Ltd. General Finance has at least 12 subsidiaries operating in the same fields as the subsidiaries of UDC. Both General Finance and UDC have been responsible for monopolising the many small finance companies which used to exist in New Zealand. For example. General Finance took over Gisbourne Finance during 1975 and the entire shareholding of Group Rentals which it had previously owned 43% of

The directors of the National Bank's New Zealand Board, of General Finance and Chase NBA Ltd., sit on the boards of many other companies, over 50 in 1974. These companies included Challenge Corporation which has its own finance company. Challenge Finance, Australasian Temperance and General Mutual Life Assurance Ltd., T & G Fire and General Assurance, the National Insurance Company of New Zealand. Mutual Life and Citizens Assurance Co. Ltd., and Credit Investments Ltd., the finance company for the LD Nathan Group. Australasian T & G and MLC Assurance Companies are both in the top ten, having combined assets in 1969. $177.5 million. Both these insurance companies are Australian controlled.

The Bank of New South Wales

The 'Wales' is the third largest of the foreign banks operating in New Zealand It was established in New Zealand In 1861. It is Australian owned. Its directors are drawn from many of Australia's largest industries, for example. Sir John Dunlop and TJN Foley are both directors of Colonial Sugar Refining Ltd., The interests of the latter firm go far beyong sugar refining to include investments in Fletcher Holdings Ltd.. CSR own 24% of Fletcher's shares. This makes one of New Zealand's largest firms subject to foreign control.

In Australia the Bank of NSW owns 52% of the shares of the Australian [unclear: Garantee] Corporation Ltd, Australia's largest finance company One hundred percent of the Australian Guarantee Corporation (NZ) Ltd are owned by the Australian Guarantee Corporation (Australia). AGC (NZ) Ltd in 1971 acquired 100% of the shares of another major New Zealand finance company Alliance Finance Corporation. Both these finance companies are in the largest few in this country which do most of the business.

The directors of AGC (NZ) Ltd sit on the boards of over 20 other New Zealand and foreign owned companies in this country These include Feltex (NZ) Ltd, Cerebos Foods (NZ) Ltd, [unclear: Cents] Insurance, J. Lucas (NZ) Ltd and McAlpine Refrigeratic

Fletcher Holdings, besides its links with the Bank of NSW through its principal shareholder CSR, also has links with the CBA — the Commercial Bank of Australia — the smallest trading bank operating in New Zealand.

Fletcher Holdings own about 30% of Marac Holdings Ltd. Marac has its own merchant bank and its own finance company. The CBA is the second largest shareholder in Marac having over 21% of the shares. Two of the other principal shareholders are also foreign, the Security Pacific National Bank Group (Los Angeles) and National Mutual Life Association of Australasia who owns 20% and 3% respectively. (NMLA also has shares in many major New Zealand companies, as do most insurance companies operating in New Zealand. Among these vast shareholdings is a 2% holding in Fletcher Holdings.)

Fletchers also have a large holding in another merchant bank, the New Zealand United Corporation, Ltd. Fletchers own 10% while the Bank of America International Financial Corp and Barclays Bank International both own 20%. The other major shareholders is the managing director F. H. Renouf with 22% of the total shares. The two foreign banking groups involved the NZ United Corporation are respectively the first and fourth largest in the world.

The NZ United Corporation has 10 subsidiaries which provide credit, invest in industry and provide other commercial services. J.C. Fletcher, the managing director of Fletcher Holdings sits on both the boards of these important financial institutions. Along with him the other directors of these two companies sit on the boards of over 70 other companies. These include the South British Insurance Company (along with Sir John Dunlop who is on the Boards of CSR and the Bank of NSW). Pacific Steel, Dalgety NZ Ltd. Tasman Pulp and Paper, BP New Zealand Ltd. Southern Cross Medical Care Society, Certified Concrete Holdings, the CBA, New Zealand Breweries, UEB Industries, Zip Holdings, EMI (New Zealand) Ltd, Odlins, Group Rentals (which is connected with the National Bank) and Miskimming Industries.

In New Zealand, as in most capitalist countries, a merging between monopoly finance capital and monopoly industrial capital has occurred. This is illustrated in New Zealand best by the links between Fletchers and the above mentioned Banks and finance corporations, and the many other companies that are linked by virtue of common directors and investment (e.g. Tasman Pulp and Paper is 17% owned by Fletchers). With control over a large section of the economy, employment and economic development are squarely place in the hands of J.C. Fletcher and his foreign masters. By controlling economic development and employment, these companies ultimately determine the quality of life in New Zealand. The criteria which determines what the companies do is profit and in the case of the above companies it is mostly profit for foreign shareholders. Thus, although the development of heavy engineering is important to New Zealand's industrial development, and saves valuable overseas funds, Fletchers closed down Fletcher Bernard-Smith, one of the most prominent companies in the field, in the interests of profitability.