The Ashburaton Guardian. Magna est Veritas et Prævalebit TUESDAY, OCTOBER 1, 1889. A STATE BANK.

Ashburton Guardian, Volume VII, Issue 2241, 1 October 1889, Page 2

The Ashburaton Guardian. Magna est Veritas et Prævalebit TUESDAY, OCTOBER 1, 1889. A STATE BANK.

The amiable weakness of the member for Ashley, is it is well known his earnest desire for the establishment of a (State Bank for New Zealand ; an idea which so dominates his mind that he seldom or never rises to speak without dragging it into his rem.rks, whether the subject under discussion be finance, or federation, divorce law, or dog collars. Indeed the fanctious report of Parliamentary proceedings which appeared once during last session in the " Catholic Times " and in which every other paragraph consisted of the sentence "Mr Verrall advocated a State Bank " was scarcely so much a travesty as a truthful record of actual fact. But we fear that the insistance and persistence of the honorable member is fated to be fruitless and that he is doomed to disappointment, for there seems to be no probability of Parliament acceding to his proposal. It will, however, perhaps be interesting to our readers to know that New Zealand has already had some experience in this direction, for we find that at a publio lunch aon in Nelson the other day the history ot what was something like a State Bank, and which was in operation in that citf pome forty years ago was given in the following extract from a letter from Mr David Icelanders , who founded the firm of Sclanders and Go in 1842 : " Perhaps you are already aware that the Government of New Zealand passed an Act creating a Bank of Issue, and made their notes a legal tender. I think this was about the year 1847. A more stupid thing was never attempted, and when at length the act was repealed, the officers of the Government had got the business into such a mess that I was told on good authority at the time that they had to hand over to the Union Bank of Australia the work of withdrawing and cancelling these Government noteß. The Government Bank was only a Bank of Issue, and had no provision for effecting remittances or similar banking business. Tbe Act prohibited the issue of any other notes payable on demand, and this of course compelled the Union Bank of Australia (then tbe only -Bank in the colony) to withdraw every note they had from circulation, and as it was not worth while to continue their branch in a small place like Nelson, they closed it. Now you may imagine what a difficult position We were thrown into, without any means in the place for making remittances, and nothing to constitute a medium of circulation except a very moderate supply of Government notes, and a still more moderate supply of gold. One had to exert all one's wits to consider how any business was to be done. The first step I took was to buy the Union Bank of Australia's safe (wh ; ch the firm has still in use). I believe it was the only safe in Nelson of any practical value, and the Government officer in Nelson, who had charge of the local funds, kept them in that safe for years, for which I gave him the exclusive use of one of the drawers. The Government paid all salaries, wages, etc, in their own notes, and all Customs duties, were paid by importers in Government notes or gold. It was a sort of scramble to gather enough notes and gold for Customs purposes, for these were being continually oarried away from the place in the absence of any other way of making remittances. 'J hen srose the necessity for my bank, which I called the Nelson Bank. The Bank of Issue Act prohibited the issue by anyone else than the Government of notes payable on demand, and although 1 issued my notes payable twelve months afterdate, I paid tbem all the same whenever presented. A high Government official called and tried to persuade me I was infringing the Act, and I had to argue with him a long time before he could see, or would acknowledge that he saw he was wrong, These notes of mine were, of course, ___-ujly made use of in the Nelson province, snd for about eight years they answered all tbe purposes of a circulating medium, and little or any other money was ever to be seen, and I frequently received the thanks of those who were capable of appreciating their usefulness, acknowledging that without tbem it would scarcely have been possible to carry on business The first year or so the notes wero printed in Nelson, at th.e II Examiner '* newspaper office, but afterwards they were lithographed in London. At first only £1 notes were i&sued , bat afterwards £/> ones also, and also (when even silver became scarce) 0s notes were issued by special request, and were greatly appreciated."