BANKERS AND MERCHANTS.

Kumara Times, Issue 844, 14 June 1879, Page 4

BANKERS AND MERCHANTS.

A contributor to the Sydney Morning Herald gives opinion, and adduces figures, in support of his argument that one among the many causes of the commercial depression pervading the colonies arises from the bankg having destroyed the business of the merchants by acting as merchants themselves. In the good old days when we were all prospering, the squatter sent his wool home through the merchant, and the tradesman imported his goods through the same medium j the result was that the merchant did not advance the squatter more than the wojl waa worth, and did not import for the tradesman more goods than he could conveniently consume and pay for. The banks had the business from the merchants, but it was surrounded with all the safeguards of the prudence which the merchant had exercised in making his advances. Now, the tanks advance to the squatter direct, and send his wool home to their branch in London for sale, and let him draw here as much as he pleases against it. This is all very pleasant go long as the market keep up, and the Bquatter feels justified in living well and spending his money freely, but let seasons such as. we have had for the last two years occur, and ugly reclamations come back for big figures which the Bquatter cannot pay, because he has spent the money, and the result is increased indebtedness to the bank. So the tradesman, in the same way, imports his goods direct through the bank, and, having no check, and the bank advancing the full costs iu London, he orders freely in the hope that a good market will repay him when the goods arrive ; but, alas, for his expectations, he finds, when the vessels come in, other tradesmen have sen* equally heavy orders with himself, asd the goods go into stock or go into skow. until he can relieve the advance, mbiah they are liable for, and so we aj»* inundated with goods, because all the. checks which should exist upon sucjfc operations are withdrawn. *

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