The Evening Star SATURDAY, APRIL 9, 1870.

Evening Star, Volume VIII, Issue 2161, 9 April 1870, Page 2

The Evening Star SATURDAY, APRIL 9, 1870.

It is not within the province of a public journal to commend any particular scheme for the investment of capital, the success of which is dependent upon individual management. Journalists have to deal with principles affecting society as a whole, and therefore have need of the utmost caution lest their advice should lead persons to a course of action that may tend to loss. When therefore a prospectus of a railway, a new manufacture, or a bank is placed before them, their only safe course is to examine the grounds on which the project is based, that some clue may be given to capitalists to form a correct judgment. Taking into consideration the circumstances of Otago, the project of a new bank will not excite surprise. It is not for us to penetrate into the secrets of those awful chambers, the sweating rooms of the banks, nor to say that the pressure that is now so heavily felt by all classes in the Province may not be justified on the soundest banking theories. It is, however, somewhat singular that the heaviest pressure has been put on in Otago at the very moment when England is recovering from the long depression that paralysed her manufacturing industry, and when there are unmistakcable indications of a change for the better in the main industrial interests of the Province. It is all very well to tell those who are suffering, that these periodical purifications are necessary, and that hereafter trade will be carried on on a sounder basis. This may be true, bnt unfortunately the weeding process while getting rid of the tares very often roots up the wheat also. There can however be no doubt from the revelations in the Bankruptcy Court, that many failures that have taken place were inevitable, and that no justifiable amount of support would have enabled the bankrupts to overcome their difficulties. But these are of old standing, and it may be fairly assumed as property has settled down pretty nearly to the world’s price, any new banking establishment would enter upon its business under favorable circumstances, as the securities upon which advances may be made are more likely to increase in value than to depreciate. In this respect the time is favorable, and not the less so that many really sound men are quite prepared to support an institution which, properly conducted, will retain the profits within the Province, instead of exporting them to capitalists in England, who have no interest in the Colony except receiving their dividends. There is quite sufficient margin, too, between the value of money at Home and in the Colonies to render well-conducted financial operations profitable. It is plain that there is ample room for the profitable investment of capital. New industries are springing up. The development .of quartz mining, flax dressing, and of the trades that will rise up consequent upon the progress and completion of public works, all point to the necessity for a means of utilising capital to the utmost. Whatever caution may be necessary in making advances for the purpose of fostering industrial development, without assistance from capital progress is impossible, and it may be fairly assumed that those who became shareholders in the proposed Bank, should it be established, may not only fairly expect to reap the legitimate profit of their enterprise, but have their property enhanced in value in proportion as population and wealth increase. We look, therefore, upon the proposed scheme as the outward sign of a pressing want. We are not prepared to say whether the present banking establishments are or are not able to render the necessary aid, If thev arc not vdlling, the ability is not a matter for discussion ; for no matter from what cause, it is sufficient that it is withheld. It must not, however, be forgotten that any new bank will have to contend for business with existing institutions, and the points for consideration are to ascertain the probable amount of business, and to secure efficient management. An to the first, the shareholders themselves, through their influence and connections, can generally secure sufficient; the second must depend upon the directors.