The Dunstan Times FRIDAY, SEPTEMBER 27,1872.

Dunstan Times, Issue 545, 27 September 1872, Page 2

The Dunstan Times

FRIDAY, SEPTEMBER 27,1872.

Beneath the Rule of MenEN'TiRELY justt the PEN' ia mightier than the sword,

Mr. Johx Bathgate, M.H R, lias introduced a very useful measure inlo the House, and one which we hope to see carried in something like its original shape. The Bi lis intituled “The National Currency and Bank Act, 1872,” and is founded on the principles of the “ American National Banking .Act, 1864.” A Select Com mittee of the General Assembly was, last year, appointed to ii quire into and report upon hanking in the Colonies, and Mr. Bathgate’s Bill is based mainly upon their recommendations. With these facts before us, there exists good reason to believe that some practicable measure to reform our present system of banking will be the result, j t must be very clear to everyone that,

as a rule, the Barks as at present ■established afford but indifferent facilities to the trading and producing classes ;in fac r , 10 men of small means,

they are worse than useless, the inferior fry of traders and producers ■being absolutely refused the slightest amount of assistance, let their position be ever so sound. The branch establishments, known as gold-fields agencies, are merely purchasers of gold or depositories for money.

What legitimate banking they may do is con fined to a very select few, •whom the banks use as go-betweens between tbem and the general public, the ostensible objects of the banks being to contract their operations as much as possible with the industrious ■classes, so that they may invest the more largely in squatting properties and Government securities. The profits made by the banks are something enormous, livery year we find their balance-sheets showing dividends of twelve to fifteen per cent., with considerab e sums carried to sinking fund; and ad this made out of the money of the colonists, who receive no benefit whatever in return, notwithstanding that they snpply the means It may be very true that the banks possess a large paid-up capital; but how is it expended 1 Not in assisting the development -of the resources of the country, or supporting its trade or industries ; but in Government loans O. - advances on wool and stations, having no effect at all upon the requirements of the public generally 'J ho profits made by the, banks are larger and more certain than the average gains of mercantile establishments, scarcely ore penny of win dr is expended in tire Colony. A 1 goes to Enland, and is entirely lost to us : in no shape whatever do we obtain any assistance. It is no wondei that New Zealand, notwithstanding its gold-fields, is gradually becoming poorer and poorer. While so large a proportion of our earnings leave us. it matters not what we nav ni.d e,

unless wo can retain, some portion, the amount of satisfaction left to us is no more consoling then it would be to the slave condemned to the mints, in that he has extracted so much gold oi s’lver. A country, like an iiuli ,I’iduai, must retain soma Jf tlie jnoSts-

of its earnings, or it cau never gr- w. rich and prosperous. It has been computed that the Imsiness done by he bauks in the Colony is, for the treater part, transacted with the money of the Colonists themselves, while the ■refits they take out of it beats no proportion whatever to the amounts ■valy invested. Mr. Bathgate's Hill .proposes to deal with this difficulty, iid provides “ That foreign companies Dairying on the business of banking in the Colony shall set aside a certain proportion of their capital f<>r use in the Colony, and come under the same regulations necessary in the case of local banks.” That to ensure the growth of capital and further the levelopment of trade and commerce, encouragement should be given towards the establishment of local banks, to be called ‘National Banks. That in order to diminish the necessity for keeping large amounts of gold in a number of places, a central clearinS bouse be'established, whereby balances ■nay be settled and adjusted throughmt the Colony” The necessity for local banka has, we ara aware, occupied the attention of Air. Bathgate for- some years past and that gentleman has put himself to considerab'e trouble and expense in procuritg the most perfect and reliable information upon the systems of banking practiced in America. To a gentleman possessing the practical experience of Mr. Bathgate, the drain upon the Colonists by the present system of banking must have been long apparent, and should he fortunately he successful in. canying the present most useful measure, we feel assured that he will deserve the hearty and; unanimous thapks of the New Zealand public.