FINANCIAL STATE OF THE COLONY.

New Zealander, Volume 1, Issue 8, 26 July 1845, Page 2

FINANCIAL STATE OF THE COLONY.

To refrain from interfering or tampering with the circulating medium, or currency, has been, throughout all history, the careful precaution of all statesmen, more especially, in commer-cial-countries,^ whose prosperity is dependant, on the purity and probity of the national faith and character. Nothing but uncontrollable circumstances, or urgent exigencies of the state, have ever prevailed on the Commons, of England to allow or sanction any Prime Minister to issue, even, Exchequer bills ;' and when they are issued, there is a specified time for their withdrawal, at which it is optional, with the holder, either to receive the amount in sterling coin, or to take a new bill in exchange. The Bank of , England— acting as a private Bank, with subscribed capital, and also, as the agents of the Government, in paying dividends on the immense loans raised during the war, commencing in the year 1792 — issued notes: but bound themselves to pay, on demand, in the current coin of the realm; however, in 1797 S specie was drained from England to such an extent, by the wants of the belligerent powers on the continent, that the English Government 'were compelled to support the national credit, by restricting their agent, the Bank of England, from paying their notes in j specie, and, at the same time, passed an Act of Parliament, making Bank notes a legal tender. This, to a certain extent, prevented much mischief ; but it could not alter the real relative value of a paper issue and a metallic currency, and although the notes of the Bank of England were received, in legal payment of all debts and other monetary transactions ; yet it very soon came to pass, that a person with a guinea could purchase as much corn, for which another, possessing only Bank notes, would have to pay the nominal amount of twenty seven shillings ; — or, in other words, twenty-seven Bank notes, of one pound each, could be purchased for twenty guineas. However, as soon as peace was concluded, no time was lost by the English Government in returning to the proper legitimate state of sound currency ; and so well understood are the dangerous, fallacious, and ruinous principles and effects of a paper currency, even to a limited extent, that the English Legislature, now regulate and restrict the issues of every local bank in Great Britain. Wherever Foreign despotic governments have issued and attempted to fix a certain value on a paper currency, similar disastrous results have followed., Not to mention the well-known French Assignats, — in Russia, the old silver rouble was equivalent in value, as specie, to the English coin of half-a-crown. When the first issue, about forty years since, of paper roubles was made by the Russian Government, there was but slight- difference in the current value of the silver and paper rouble ; but the ( Russian Government continuing, from year to year, to pay their troops, and all their civil establishments, in paper roubles, the comparative difference in value, became consequently greater and greater, until at length, on the continent, about twenty years since to our certain knowledge, a paper rouble — nominally half-a-crown, was valued at seven pence, and at the present day, we believe, its currency is about nine-pence. The recent malversations, respecting the Government debentures at Auckland, and the j trial at Wellington, with the excellent judg- 1 ment of Mr. Justice Chapman, which will be found in our columns this day, most naturally direct attention and reflection on the paper issue of the local Government, in reference to the true financial state of this Colony. It is a subject most highly important and deeply interesting, therefore, with respect to these debentures we purpose some few observations, — on the system — or rather the want of system, of theii manufacture, — the amount issued and actually in circulation, — and the probable results and consequences to be anticipated from such heedless, unlimited, excessive paper currency. . In the Bank of England, there is a regular department of Issue, the head of which is responsible for every note therein engraved and signed ; and an account is opened for every individual note, so that the date, to what office in the Bank,ortoany other person,when issued, is recorded j and when the note comes back, in the course of time, defaced and worn, to be exchanged, it is afterwards cancelled, and the date of its destruction is-also registered. But in this colony, quite a different plan is adopted, and instead of the manufacture and place of issue being confined to one department, and one person being made responsible for their proper safe keeping until circulated, these debentures, h their pi ogress to completion, pass through many offices, without either check or responsibility attached to any .individual. The plan is, so far as- we have been able to understand it, thus,— they take their rise under the auspices of the Government printer, who we presume, in order that; he may with certainty recognise, any improper fraudulent imitation of the Government type, has at the commencement of the debenture, imprinted a Roman c, in the word "\the" preceding "Colonial Treasurer, &c." It would be imagined that when the debentures, have been thus, most cleverly, put into form, they would be carried forthwith lo some pro-

pei\officer, in the Colonial Secretary's office, — but no, — they are then transmitted to the chief clerk at the Audit office, to be numbered. What the -Audit office can have to do with the issue of debentures, we have in vain attempted to discover, and we can only ascribe the ridiculous performance, of such puerile automatous duty of making figures, by the chief Clerk of the Audit department, to that general interference with almost every depaftmenf, under the egotistical assumption of universal knowledge, in every , matter, respecting the machinery of a government. After being thus magically numbered, the debentures are sent to the office of Colonial Secretary, afterwards to the Governor, and then to the Colonial Treasurer. Now we should like to know, whether during this round of manufacturing circulation, any vouchers of receipt, or transfer, pass between the different departments; if not, who can tell how many books may have been lost, or how many forged debentnres may yet be in circulation ? We most truly believe, that as .lone have been made responsible, and many most ridiculously have been concerned in preparing them for circulation, that most perfect ignorance prevails as to the real position or state of the debenture issues. So much for the manufacture, and now as to the amount of issue. If the.highest number of the debentures of each amount could be ascertained, there would be no difficulty in arriving at the total amount of issue j but that, as our readers must be aware, considering that great quantities have been transmitted to the southern settlements for circulation, is almost impossible. However, we shall shew some little calculation, on what numbers we have seen, and then proceed 10 elucidate, in a different manner, how the actual facts and amount may be very fairly calculated, and be considered as ap. proximating to the truth. We now give the numbers and date of issue, of some of which we haye seenj and presuming those to be the highest, — which it is quite clear they are not, the following will be the result; —

Amount c£'loo. £50. No. 28 31 Issued 22nd May, 1844 £. s. 2800 0 1550 0 £5. £1. 3379 6481 16th July, 1845 16895 0 6481 0 105. ss. 4853 5555 Ist May, 1845 9th Dec, 1844 2426 10 1388 15 c£31,540 5