The Manawatu Standard PUBLISHED DAILY.) Suivant la verites SATURDAY, FEBRUARY 24, 1883. THE STATE OF TRADE.

Manawatu Standard, Volume 3, Issue 78, 24 February 1883, Page 2

Manawatu Standard PUBLISHED DAILY.) Suivant la verites SATURDAY, FEBRUARY 24, 1883. THE STATE OF TRADE.

peopie are wondering whether the , banks will continue to "put on the screw " as has been thß practice recently^ We are inclined to the opinion that a return of the palmy days of unlimited and. unquestioned bank accommoda» tion need not be expected. The system was a cursa to tie ' colony. In the inajoiafcby! ot caeis, ov&fdrefts. wer« fi«aly. givenv'^anfr • whin-* /a ' crisis appeared looming ahead, they were as suddenly called m, and thus ruined hundreds, who cursed the day m which th-y ac« cepted the bank's spontaneous favours. It is ft rotten system,, and only encourages men m rash speculation and extravagant ways of living, which otherwise they would 'never dream of. It will be an unfortunate day for this Colony should; the djay of lavish, bank accommodation and'- big overdrafts, especially to men of small means, ever return* The general Opinion is that the final result wiii be that' overdrafts will -be refused "to retailers, and that the blinks, or many of them, will more universally, adhere to legitimate banking business, and. not lay> themselves, open to the charge of being only pawnbrokers. What people iri business' generally complain: of is ..the sudden calling-in of overdrafts; often without cause, rhyme, or reason. The curt official circular is received, and the unfortunate customer might 1 as well argue or reason with the iron door of T the bank's strong room. The genial manager listens patiently, smiles blandly, and simply interjects ; « JMy 'dear 'Sir, the" bank wants ; the money." The customer turns away a disgusted, disheartened, arid possibly a ruined man. Of course* it might be said a business man oas no right to allow himself to be placed m such a position. But will anyone tell us what man, be he large or small; can at a moment's notice, and without serious inconvenience, and possibly a severe struggle, meet his ; indebtedness to his bank! Tne mercantile community, would gladly «cc a law passed to render binding a certain scale of periods, proportionate to the amount of advances made, during which overdrafts can be called m; say so many days for every hundred or thousand of advance, as the case may be. We consider that m this respect the banks have been to blame. Whsi is generally considered trade depression is due as a rule to reckless trading m the first place, subsequently followed by undue bank pressure, entailing ruin upon many, The effects of the Glaijjgpyl jßdnis fcqilapset are terrible to , contemplate, and will not be forgotten within the present century. We give the following figures by way of illustra* tion :y~" It appears that the liquidation of thefCity of jG-ljasgqwißanic'has , cost ,£194,000, or l| per cent, on the amount which has pasped through the hands of the Jiqhidatffro. iT-he jfcotal is made up of £30,000 for salaries and expenses, £103,000 for legal charges,, and £61,000 for remuneration of Ijqnidators. There were 1,300 share-, holders when ihe bank stopped ; of these 350 were women, and there w,ere ,174 perßonß'who merely Meld as 'trustees or executors. The first call of JgdOO per £100 share produced half the nominal amount, and entirely ruined one-third of the shareholders. The next call was £2,250 per share, and after it was paid only 176 contributors were left solvent. When the bank failed there was a deficiency! 0f ; £5,20Q,000, - which e.nor-i mousi stain- had-' been p'rihcipally lost' through tour accounts, on which £5,790,000 had been lent m return "for securities worth £1,52.1 ,000." One collapse of this ( kjnjl cipugh" to take place m every fifty yearß, though doubtless such occurrences have their benefi?ial , froto: a social and commercial point of view. In this colony the restrictive action of the banks has recently been felt very considerably. W itii money at 4 su^ti a' 'high rate,' and profits practically nil, trade cannot be designated otherwise tban unsatisfac* toryr ; Tfie following figures and remarks are from the carefully compiled statistics of the Wellington Monthly Prices Cur« rent during the quarter /ended December, 1882. We find that the indebtedness of the public to the banks has increased £455,739, or a total increase for the year of £2,225,42(7. The Prices Current remarks : "The excess of advances has never before stood so high as it does m these returns. We imagine ithat these figures will take, some of our local readers by surprise; th^y have been so accustomed lattery to hear of the banks putting on the screw/ that they can scarcely be, prepared to find that the fact is the public have been, ,and still are, bearing heavily on the

banks." We, however, incline to the opinion that the quarter ending March next will show a very different st ite of affairs, an improvement to effect which a present loss is inevitable. The importations during the month have fallen off considerably, and if there is any meaning m the London freight report that the tassels on the berth for New Zealand are ample, we. anticipate a sensible and much desired decrease m imports for the next six months. The lesson taught from the effects of over-trading-should not be forgotten by our mercantile community, as an element of danger and inevitable temporary retrogression inducing probable protracted stagnation m every branch of business. Let the recognized principles of supply and demand be consistently adhered to, and over-trading will speedily eflect its own cure.