BANK AGREEMENT.

Globe, Volume VI, Issue 660, 1 August 1876, Page 3

BANK AGREEMENT.

To the Editor of the Globe. Sir,—The agreement made by the Ministry with the Bank concerning the loan, which is a fraudulent preference, as shown in my former letter, has certain peculiar effects which the public may not at first see. It makes the agreement useless, for all criminal agreements arc void (that is, are not binding). But its worst effect is really on the customers and shareholders of the Bank. The words of the agreement are, " If they think the Bank unsafe;" why then the mere thoughts of the Ministers would ruin New Zealand, because, acting upon their thoughts, they may withdraw all their deposits from the Bank without notice, and leave for the other customers —what ? Nothing but securities for sale in a panic. What about the cheques of their customers, the bills falling due, the note circulation 1 For the amount *due to the Government is at least three times larger than all the coin and bullion, cash balances and Government securities included, held in the Bank of New Zealand and all its branches. If, according to the agreement made by Mr Bowen and bis friends, the bailiffs were put in charge of this as part payment of the debt to the Government, what would the public do for their money ? Where is it to come from? You can't cash securities in a week or a month, All business in New Zealand would come to a standstill—all cheques, bills, aud notes would be dishonored, because there would be no coin to pay them with, the Government alone having all the cash and good securities. But the agreement is illegal, if the Ministry dared to attempt to carry out their own agreement, the judges would be called upon to interfere, even supposing that the members of the House still continued to take no notice of this fraudulent preference. (Page 231. Bills of sale—lf a creditor shall think a debtor not safe, and, expecting failure, ehould get paid in full, &c, &c, &c.) There seems to arise a difficulty in dra.ting the 1877 Bodget, on the score of county finance. The County Bill clearly aims at the entire destruction of the Road Boards, and at the reconstruction of provinces with a new name, and smaller dimensions. The Road Boards are the very best part of our constitution ; the only fault to find is " that there are not a few more." If the County Bill become law (it should be called the New Provinces Act), it will have a great influence on the Budget. If the County Bill be thrown out and New Zealand be divided into 100 Road Boards, with power to suboivide su.bjt.ct to approval of Parliament,

I what a different form the Budget will assume. England alone, when but a little more populous than New Zealand, was divided into forty counties, besides Wales, Scotland, and Ireland, yet all these four countries together are smaller than New Zealand—which has a full million acres more than the whole four. The division of New Zealand greatly affects the Budget, the Budget affects the Banking Agreement, and so speculation and guesses are vanity double distilled. How to mend the Bank agreement ? several persons put that question to me. It is void, utterly past mending. What is to be done? Make a new one, and revert to the sound principle of the Bank of England; let the Bank hypothecate definite securities for the advances due to the Government, and so end the difficulty. Ought not the Ministry to be impeached at the bar of the House for this breach of the laws ? It is certain that laws are of very little use unless you carry them out, and they could not be known but by use. Suppose in a month the Ministry are out of office, and some other politicians are in their places. Suppose the new Ministry "think the Bank unsafe," (some members of the House think that now). Suppose the new Ministry, without a moment's warning, put bailiffs in charge of all the cash and bullion, drew all the cash balances due by other banks and pounded all available securities, that would only be carrying out the very letter of the agreement. Your readers can imagine the next morning's telegrams ; but I really think that a Bank Inspector who could so place his Bank at the mercy of time serving politicians who perhaps would just delight to ruin the place, and then blame the Premier, I think such an Inspector would do well to leaye his country for his country's good. The whole agreement is void, it cannot be enforced at law but; what are the House doing—Mr Moorhouse has said nothing—Mr Richardson is one of the makers of the agreement, and even Mr Stevenshas failed to notice it. Yours, &c, J. W. TBEADWELL.