Thursday, 19th August, 1847.

New Zealander, Volume 3, Issue 129, 25 August 1847, Page 2

Thursday, 19th August, 1847.

Present, — The Governor, Colonial Secretary, the Colonial Treasurer, the Attorney General, Mr. Brown, and Mi. Aferiiman, The minutes of the last meeting were read and confirmedi

Paper Currency Biu. On the motiou of the Colonial Treasurer, Council went into committee on the bill : and on the motion that the pteamble do stand as read, Mr. Merriman said, that as the whole principle of the bill was involved in the preamble, he could not agree in the motion, and proposed that the preamble should stand over, till the other clauses had been considered, which was agreed to. Clauses 1, 2, 3, 6, and 7, were read, and allowed to s>tand as printed ; clauses 4, and 5, being postponed. The Attorney-General, on the reading of the Bth clause, suggested, for the consideration of the committee, whether Nelson ought not to be inserted as well as Auckland, and Wellington. Of coune, he »aid, a line must be drawn same-

where, hiit it seemed to him, (hat no little inconvenience and hardship would be suffered by a settlement of three or four thousand inhabit' ants, if no office for the cashing of this government paper, should be established in it. Mr. Men i man agreed with the learned At-torney-General, that very much inconvenience would arise in those settlements where there were no office established, but he thought that it should not be made compulsory to establish one at Nelson, as Taranaki and other settlements, would, on the same gi omuls, be entitled to one, and the multiplication of them would certainly not work well. The Colonial Secretary did not see the necessity of establishing an office-even at Wellington. He thought that the Bank- of issue should be confined to Auckland alone. The Attorney-General thought that such was not the meaning of the Secretary of State, in hie despatch, who, in suggesting where the banks might be established, had made use of the words* " Wellington and Auckland/ by which it obviously appeared, that he intended that a bank of issue bhould be lived in that town. With tegard^to Nelson, he would suppose it to have no Mich oiHce. The inconvenience must be obvious;, if this bill should come into operation, a portion of the issued paper money would find its way to Nelson, whether an office should be established theie or not ; and such paper was a legal tender by the bill — a colonist, desirous of leaving the settlement, gets in his debts, and is paid in government paper j to carry away, or for remittance, these notes would not be available; the neatest office at which he can get the notescashed, is, say, at Wellington— practically at the distance of a fortnight. Thus, in every case, a settler wauling cash, would probably have to dispose of his notes at a discount. It would, of couibe, be impossible to remedy such an inconvenience entirely, under the bill ; but he, the Attorney-General, thought that the people of a large settlement ought not to be without the opportunity of immediately converting their notes into cash. The Governor thought that the Sub-col lector of Customs at each settlement, might be empow. eied to transact business for the bunk j a number of notes could be supplied to each ollker, to be issued on account of tue bank, if they should be applied for. The Attorney-General said, that in that case, j each officer so acting, should be required to take [ the oath prescribed for a manager, and havr power to cash jiotes as well as issue them. i The Governor said that some such arrangement might be made for the convenience of small settlements. Mr. Brown said that the more numerous the ebtablishments were for issuing these notes, the qi eater facilities would then be afforded lot increasing the circuJuiion. Suppose th<t amount m circulation in Auckland, to be £4000, and on the establishment of this bank, application were made for notes to that amount ; the notes would, of course be issued, and exchanged for gold :— three-fourths of this £4000 would be immediately liable to be invested at interest, and so get into the hands of Ihe colonists, or any one of them again;, and in this way, instead of the amount in circulation being £4ooo, as originally, the circulation would be augmented io £7OOo! And so ou, — notes would be continued to be issued for the cash lent out, until all that the bank would have to redeem them would be, a small fraction of specie, and some perhaps very questionable securities. The Governor said that it was impossible that such a chain of occurrences as tiad been woven by the hon. member could ever exist. He believed that experience had proved that overissues were always kept iit check by a run fo* gold. However he would have no objection to have one third of the amount of specie received for notes kept on hand. The Colonial Treasurer said that from what had fallen fiom the hon. member, Mr. Brown, one might imagine that people would prefer these notes to gold, and hasten to the bunk in crowds to have their sovereigns exchanged for paper. The clause was then agreed to. [The continuation of Thursday's proceeding*, and last Saturday's, will appear in our nexl.J