The Feilding Star. Published Daily. MONDAY, SEPT. 11, 1893. Money

Feilding Star, Volume XV, Issue 62, 11 September 1893, Page 2

The Feilding Star. Published Daily. MONDAY, SEPT. 11, 1893. Money

" Money came in too fast for the Bank to profitably employ it." So said the Chairman of Directors of the Bank of New Zealand at the meeting held in London on August 2nd when moving the adoption of the report of the Bank's affairs up to March 31st last. Since that date certain complications have arisen in the financial world which have altered that happy state of affairs. Money has apparently been ilowing so sluggishly into the banks that they have been compelled to hold out lures for it in the shape of high rates of interest paid on fixed deposits, and to pay such high rates they have also raised their charges to clients. On this subject the New Zealand Trade He view says that the course was not justified by anything in the nature of inflation or speculation in the colony. "On the contrary," it observes, " the common ground for regret has been in the spectacle of deposits constantly accumulating in the hands of banks and little or no disposition manifested to utilise money in enterprise or industry. We can only trust that the present position will not be continued longer than is absolutely necessary, and that as soon as possible an endeavour may be made to assist the promotion of legitimate development." The fact is probably this : One weak institution has been compelled to set the example of bidding high for money, and the others, like a lot of frightened sheep, have followed. There is one glorious exception, and that bank increased its share capital so as to be able to depend entirely on its own legitimate resources. We pointed out when the financial troubles commenced in Australia that one main cause of them was the diversion of capital from its legitimate channels, and it would appear that the folly is to be tepeated again. If the banks must compete with private capital they should go the whole hog, and invite deposits for five or even ten years, so that they could employ it in the same manner as private mortgagees. This would be the same as issuing debentures, or, as in the case of Governments, Treasury bills. Of course this would smother private enterprise, and ruin the country, but that is a small matter to alleged financiers who have not the visual power to see a yard before their noses. In the last year or two the outside public have had considerable knowledgo of finance thrust upon them, in a painful way it is true, but we really believe it has done them good. Take the farmers for example. Formerly they would agree to pay «m borrowed money without a murmur whatever interest was asked of them as high as ten, fifteen, or even twenty per cent. Not so now. They have been educated to know that the security they have to give in their land is the best aud safest of all, especially in New Zealand, foi tho very excellent reason that it cannot take wings unto itself and fly away. Having that knowledge they are not willing to pay a charge for money which would be equal to. a rackrent on their farms. They argue that if money is only worth five per cent, to the banks, whoso security they have been taught is not irrefragable, surely it can bo worth no more to them whose security is undoubted. We are quite within the mark when wo say that in the Orouu County aloue one hundred thousand pounds could bo invested in a week, ou security of double that valuo, but certainly not at exorbitant rates of interest loaded with extravagant charges. It is not out of place for us to mention hero that however well intentioued was tho forcing through Parliament of the •• Banks and BankorsAct, 1893," yet it savored strongly of panic legislation, and, worst of all, it is tho first step towards the attuiumont of that most foolish of twin, a Ktnto Bank. In order to innko tho colony prosperous by the development of ita resources through the intelligent oxoroiso of tho oxterprise of tho colonists, choap money is re'jiiirod, and that can novor be suppi iod whilo tho banks aro competing for it in tho jpon market, and thus ororitiiitf a fictitiouK valuo.

that this has no foundation in fact ; also that it is not at all probable any more licenses will be granted in the Borough while the present Licensing Committee is in power.