THE BANKS V. COMMERCE.

Ashburton Guardian, Volume IV, Issue 957, 31 May 1883, Page 2

THE BANKS V. COMMERCE.

At yesterday’s meeting of the Dunedin Chamber of Commerce, the chairman in kis address alluded, among other matters, to the causes of the financial deppression now existing :—“ Before sitting down there is another subject on which I would like to say a few words, and that is the present dullness of trade throughout this province and New Zealand generally, and the scarcity of money that is affecting all classes alike. At the close of one of the most productive harvests that has been known for some years, when money and should be abundant and trade elastic, we have widespread depression, Banks pulling up their customers, and every way seeking to withdraw the accomdation these inststutions have hitherto given to aid stimulate trade. Numerous failures have followed from inability of traders to gather in their assets, and to meet the demands of the Banks for the repayment of their advance. I am not sufficiently a financier to be able to give a satisfactory reason for this state of things. As a rule we all lean too much on the Banks. When their coffers are full we know how ready they are to back up many a concern that would be better wound up. If we look at several of the recent failures in Dunedin, what do we find ? That on three estates which are now being realised a loss ofLzs,ooo in hard cash has been sustained by the wholesale dealers of this province—a loss which, but for the system pursued by the Banks in giving overdrafts to an extent they were never warranted in allowing, would not have arisen. The Banks know well enough how to protect themselves, even at the expense of other creditors. When the crash comes the too confiding creditors are called together to learn that the Banks have possession of bond warrants and any other security they could lay their hands upon, and by these means usually go scot free. Useful as banking institutions are, they are not an unrnixed good in these colonies. I think the system of credit requires looking into, and the sooner that is done the better it will be for this community. So long as Banks invest the larger portion of their assets in land ' and squatting securities the cornmer- i cial interests will be liable to these ' periods of depression. When it comes 1

to witlding up estate hesitalion is shown lelt lother similar securities should be affected. I wish the same forbearance was shown by the Banks where commercial interests are at stake, as I feel assured we should have to submit to fewer losses, and a mbre Y healthy state of things would soon come round than has been the case for the last few months.”