LEGISLATIVE COUNCIL. (Continued from No. 233) Tuesday, 17th August, 1847.

New Zealand Spectator and Cook's Strait Guardian, Volume IV, Issue 234, 27 October 1847, Page 3

LEGISLATIVE COUNCIL. (Continued from No. 233 ) Tuesday, 17th August, 1847.

Mr. Mernman rose to observe that little remained for him to say, altei the ablespeechet> of the Attorney General and Mr. Brown, but that he could not help viewing the measure proposed as a mere experiment to be tried at the expense of the New Zealand colonists. That there was no intermission of change, no breathiug time allowed ; that we were buffetted about as if our welfare was utterly disregarded by the mother country. The hon. member then proceeded to make some observations relative to the old debentures, and remarked that the experience which we already had oi them, had given the country a decided distaste for Government paper of any kind. He ha<l seen one of them hawked about the town that very morning, without meeting a purchaser. That Government paper was at a discount, while the private bank ai Ai.cklai.d had taken up, or aheady provuled for the payment of every one of their notes. The Governor said that he rose with' Some degree ot diffidence to r-sply to what had been advanced in opposition to the bill, and he hoped the Council would indulgently bear with him, while he endeavoured to answer the objections urged by the hon. and learned members who had preceded him. He had not heard any ot the arguments which were just used against the measure, before he enteerd the Council, and therefore he was obliged to meet three opponents without the advantage of much previous reflection. Before proceeding however, he would beg that any words he had made use of jocosely, in reference to his learned friend the Attorney General, should not be taken amiss, — for he did not intend to say anything that might hurt the feelings of any one, or cause offence. He would now remaik in the first place, that if he had wished for arguments in favor of the bill, he could have had none more satisfactory and conclusive than those which had been used against it throughout, by us opponents. The hon. member Mr. Brown, had said that the measure would have the effect ot altering the circulation of the colony. Now, he (the Governor) contended thai no such effect could ensue / r om the bill ; but quite the contrary. For instance, in the north, at the present time, the circulation was metallic, which, should this bill pass, would be substituted by Government paper ; in the s>outh, bunk notes were in circulation, — and these also would be replaced by the Government bank notes, — but in ueither case would there be a greater amount issued, than there <were coin or notes to represent, and consequently the amount of money in circulation could not be increased j or diminished. The lion, member had stated a practical illustration of the effects of private banking, and had pointed out the manner in which commercial disasters were frequently brought about, by mistaken calculations of hazaidous speculators. Now, nothing that could have been adduced, could have so triumphantly convinced bis min-d of the necessity of having the bank'ng transactions of a country. under the control of the Government ; or else, that it private banks were permitted, they should be bound to make no greater issues of their paper, than so much only as they had specie to represent. The hon. member had instanced the probable casualty of a native disturbance, causing a demand on the bank for gold, by persons wbo n.ight wish to be prepared to leave the country. Now he (the Governor) would state to the Council, the course be would pursue, in the event of such a casualty, if he were a holder of these Government notes. He would learn the number of every note he possessed, and take care to have them registered in several places, and were be after- >

wards to lose them, he would' immediately make it known, and his demand for their value would be recognised, — and so he would incur less danger of loss than had he been possessed of gold instead of notes ; he therefore thought that the lion, member's. objec.rion.-was another argument in favour of the bill. The objection that the paper money would be hnsuited to the native population, Tiad> certainly some weight with it at first sight ; but then there would be no necessity of offering.it to 'the natives. Our dealings with them could be carried on, as heretofore, with specie. But if this was an objection against the issue of government paper, the same might also te Uiged, but in a greater ratio, against the issue of votes, by private banks* .Another objection' urged against the measure, was its tendency to disturb vested interests, and in guarding those interests he was prepared to- r go the whole way with th& hon. member Mr,.\Brown. A regulation could be easily made'to'save-ithe bank now in operation at Wellington,jfr'orainconvenience or loss. He was afraid«hovfever that the draft of the' bill which he had sent to Wellington, would raise a prejudice against the whole measure, as ir contained the objectionable provisions before referred to. Another argument used against the bill was, that it was not intended to remedy any existing evil ; but he would ask the. Council Tvas New Zealaud a part oi the BritishEmpir.e ? If so, then had not our rulers a right'to adopt such measures as were calculated to prevent evils arising in a new country like this, out of a system which experience had proved to be the cause of many and great disasters in other places. His learned friend the Attorney General had said that there always existed much difference of opinion in high quarters, upon the subject of currency. Now he, the Governor would ask, what question in these days had not become the subject of controversy, and which did not meet with talented advocates on both sides ? Again his learned friend had quoted in opposition to this measure the opinions of two gentlemen on the subject of currency and banking ; but these opinions were u:tered in the year 1844 ; and the views of those gentlemen having since' altered, it only proves that- they have arrived at their present conclusions from a close observance of the practical working of the old system and the new. .Another objection raised, was that as the government of this colony had once already issued more than they were authorised by an ordinance to do, that it would be dangerous to give them the same power again.' But as this was once unfortunately the case with the government of the couutry, was it not more than/ probable that private banks, having' the power to issue, would abuse that power to a greater extent than it was possible for the Government to do. It was also urged that the bill would have the effect of preventing other banks from establishing themselves in New Zealand, as their profits would be diminished by the Government bank. Possibly' such might be the case — and if so, the colony would* derive the benefit of the profits of its- own banking transactions, to which the colonists would have a better right, as a whole, than any private individual — for whatever amount of profit would accrue from the bank, it would to that extent lighten the taxation. It was said, that the private bank at Auckland, which had ceased its operations, had wound up its affairs, I and redeemed all its notes, while Government debentu es still lemain on the hands of the 1 public ; and it was argued from this that votes of private banks were more to be relied on than Government paper. But he, the Governor, had heard from undoubted authority,, that a great number of these debentures had been issued by the Government in order to save the credit of the' very bank that had been named ; it was thus easy for that bank to meet its liabilities, at the expense of the colonists,, and the injury of another bank in the colony. He had now endeavoured, although labouring under great disadvantages, to reply to most of the objections that had been urged againstthe bill • he hoped that the council would not discard the measure before they had given it a patient consideration, for he believed it to be one of the greatest boons that could be conferred on New Zealand,- — its object being simply to guard the interest of the public by giving ' the sole power to the government to issue a paper currency, the test of the extent of which currency would always show the amount of specie, in tlie country. The Colonial Treasurer said that to his mind, his Excellency had so ably combated and triumphantly overcome all the objections raised against the bill, that he considered it unnecessary to attempt any iurther reply. 1 He would simply content ' himself by observing tbat he was not only unshaken in his opinion, that so important a transaction as that of issuing and regulating the currency of a country should be solely entrusted to the responsibility of the government, 1 and' that a paper currency so regulated wonld be the most economical and serviceable that could be put, in circulation, — Lut, that after J hearing all that was said on both sides, he was now more fully '

convinced of the value of the bill than he had been when he first rose to move its second reading. The Governor suggested that as Mr. Brown* amendment had not been seconded, the Council might now go into committee on the bill, and improve its clauses as they pro* ceeded. Mr. Merrjman thought that the learned Attorney General had seconded the amendment, else be would most certainly have done so. However, if it was not out of order, he would beg leave to second the amendment of the hon. member Mr. Brown. The Governor hoped that the amendment would not be urged ; the bill might be allowed to pass into committee, where it could be pruned and adjusted to suit the wishes of the community, and if it should not ultimately satisfy hon. members, they would have the opportunity of voting against its third reading, Mr. Brown said that he had no idea of withdrawing his amendment ; should his Excellency's wishes be acceded to, and the bill be allowed to go into committee without opposition, then the Council would be supposed to have agreed on the principle of the bill, and this was what be wished to avoid. He had no time to throw away in discussing the several clauses of a measure which he believed to be wrong in principle ; but if bis Excelleny was^ anxious to de'ay the fate of the measure, and* allow time for its consideration, he had no objection to go into the arguments urged in favor of it, and discuss them seriatim. The Attorney General could see no good purpose to be obtained by the hon. member pressing his amendment, for in the event of a division it must be lost. Out of a feeling of delicacy, owing to what had fallen from his Excellency respecting himself, in connexion with the framing of the bill, he felt it to be his duty to vote for the second reading of it. Mr. Brown said that he was the more anxious that a division should take place, in order that the vessel about to sail for Sydney, should carry with her intelligence of the result, so that those who had, he believed, some notion of establishing a branch bank here, might know that there were at least two members of that Council opposed to the present measure. The Governor could easily imagine that if there were found here, a profitable field for banking speculations, it would very soon be occupied, and he did not see how the delay of intelligence for another vessel, would retard the arrival of any bank that might be expected. Mr. Brown pressed his amendment, and the gallery was cleared for a division. On the Council chamber being re-opened, the Governor announced the result of the division to be — For the second reading 4 For Mr. Brown's amendment . . 2 Majority 2 Thursday, 19th August, 1847. Present — The Governor, Colonial Secretary, the Colonial Treasurer, the Attorney General, Mr. Brown, and Mr. Merriman. The minutes of the last meeting were read and confirmed. Paper Currency Bill. On the motion of the Colonial Treasurer, the Council went into committee on the bill : and on the motion that the preamble 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 stand 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 course, he said, a line must be drawn somewhere, but it seemed to. him, that no little inconvenience and hardship would be suffered by a settlement of three or four thousand inhabitants, if no office for the cashing of this government paper should be established in it- , Mr. Merriman agreed with the learned Attorney General, that very great inconvenience would arise in those settlements where there was, no office established, but he thought that ; it should not be made compulsory to establish ' one at Nelson, as Taranaki and other settle- : men ts would, on the same grounds, be enti- i tied to one, and the multiplication of them I would certainly not work well. s The Colonial S cretary did not see the ne- s cessity of establishing an office even at Wei- < lington. He thought that the Bank of Issue i should be confined, tq Auckland alone. The Attorney General thought that such \ was not the meaning of the Secretary of State, I in his, despatch, who, in suggesting where the i banks mighty be established, had made use of the woods', /' Wellington, and Auckland," by i

! which it obviously appeared, that he intended ! that a hank of issue should be fixed in that town. With regard to Nelson, he would suppose it to have no such office. 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 there or not ; and such paper was a legal tender by the bill — a colonist, desirous of leaving the settlement, gets in bis debts, and is paid in government paper ; to carry away, or for re- ' mittance, these notes would not be available ; the nearest office at which he can get the notes . cashed is, say at Wellington — practically at the distance of a fortnight. Thus, in every case, a settler wanting cash, would probably have to dispose of his notes at a discount. It would, of course, 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 note's into cash. The Governor thought that the Sub-collec-tor of Customs at each settlement, might be empowered to transact business for the bank ; a number of notes could be supplied to each officer, to be issued on account of the bank, if they should be applied for. The Attorney General s<iid, that in that case, each officer so acting, should be required to take the oath prescribed for a manager, and have power to cash notes as well as issue them. The Governor said that some such arrangement might be made for the convenience of small settlements. Mr. Brown said that the more numerous the establishments were for issuing these notes, the greater facilities would then be afforded for increasing the circulat on. Suppose the amount in 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 the colonists, or any one of them again ; and in this way, instead of the amount in circirculation being £4000, as originally, the circulation would be augmented to £7000; and so on. 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 occurences as had been woven by the honourable member could ever exist. He believed that experience had proved that over-issues were always kept in check oy a run for 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 from the hon. member, Mr. Brown, one might imagine that people would prefer these notes to gold, and hasten to the bank in crowds to have sovereigns exchanged for paper. The clause was then agreed to. On the reading of the 10th clause, which provided that foreign coin should be taken at the value fixed from time to time, by the Lords Commissioners of her Majesty's Treasury, Mr. Brown said, that if the Council wished the bill to work badly, they should allow the present clause to remain. In a very short time we would have the colony inundated with the silver coin of almost every nation and state, for unless there was a similar act passed in all the neighbouring colonies, fixing an uniform value upon dollars, individuals would, as they had done before, buy them up at their current value, and ship them for New Zealand, at a good profit. The Governor thought that the bill went farther than the intention of the Secretary of State ; he believed that the despatch, upon which the bill was founded, meant merely, that foreign coins should be taken in exchange for notes, and not re-issued in the colony, in fact, that by such system, the country might be purged of foreign money. He, the Governor, had long ago observed the evil tendency of a circulation of this kind, and had given directions that foreign coins should not be received in the public offices. He agreod with the honourable member, that if this clause passed, and the. bill should become law, foreign coins would be plentifully imported. The proclamation of the Lords of the Treasury, which had been sent out to him, fixed dollars at 4s. 2d., and as they did not realise that sum in the other colonies, it was to be supposed, that they would be bought up and sent here. These documents had been sent out to him, with instructions to proclaim them, in the event of this bill becoming law. Mr. Brown thought, that if anything were wanting to prove the total ignorance of the Secretary of State respecting this colony, it would be found in. these instructions. The! Governor would differ from the honourable, member, for he was of opinion, that

Earl Grey's instructions on this subject, proved bow desirous be was to do the best he could for New Zealand. The clause was amended by striking out all relating to foreign coins. Clauses 11 to 18, were agreed to. On clause 19 being read, which provided that the ultimate payment of all notes issued by the bank, should be chargeable on the general revenue, Mr. Brown observed, that each province should be charged with the liabilities of its own issues. The Attorney General thought that the clause as it stood, was necessary, in order to give greater security to holders of notes ; should any thing befal their gold, they would still have the colooy for their surety. Mr. Brown, — Yes, but in that case, the colonists holding such notes would be obliged to pay themselves out of their own pockets. The Governor thought that it was right that the liabilites of the bank should be chargeable on the general revenue of the colony. On referring to the charter, it would be found that provision was made for a general revenue, and that the surplus of one colony should go to make up any deficiency arising in the other. And it was quite right that it should be so, for were the islands divided into two distinct provinces, and each dependent upon its own revenue, great inconvenience would be experienced by vessels trading between them ; whereas, the existence of a general revenue, renders it only necessary that goods should pay import dues at a port within either province, and then be shipped to any place within the general government of the colony. On the reading of the 20th clause, whicli provided that the funds should be invested out of the colony. Mr. Mernman observed, that he believed this provision was absolutely necessary to render the bill at all effective. Should the funds be invested within the colony, then nothing could pi event an increase of circulation and over issue of this paper, the effect of which would one day or other certainly be, a run upon the bank for specie, an inability to meet such demands, and then insolvency of the bank, the notes of which would be thrown back upon the colony, and remain long unredeemed, as had been the case with other Government paper, which remains at a discount to this day. The Governor did not kuow to what notes the learned member referred. Mr. Mernman. — The Government debentures. After a lengthend discussion, the clause was amended, by striking out the proviso, " that no such investment should be made in the colony of New Zealand." The Committee then adjourned. Savings Bank Bill. Oh the motion of Mr. Brown, the Council went into Committee on the bill, the report of which was brought up and adopted. The orders of the day for consideration of Slaughter House Bill, and first reading of Impounding Bill, postponed. Council adjourned till Saturday.

Saturday, August 21st. Present, — The Governor and five Members. Minutes of last meeting read and confirmed. Paj er Currency Bill. On the motion of the Colonial Treasurer* Council resumed in Committee on this bill. The clauses from 31 to 38, weie considered : 33 and 34 were struck out, and several amendments were proposed and introduced, after which the Committee adjourned. Savings Bank Bill. On the motion of Mr. Brown, this bill was read a third time and passed. Orders of the day, relative to the Slaughter House and Impounding Bills postponed. The Governor laid on the table a bill, entitled an Ordinance lor Registering Births, Deaths, and Marriages, within the colony. Council adjourned till Tuesday, 24th.