BANK RATES AND BANKING.

New Zealand Times, Volume XXX, Issue 4413, 12 May 1875, Page 2

BANK RATES AND BANKING.

TO THE EDITOR. Sin, —The speech of Mr. Murdoch, in reply to a Question put by Mr. Prime at the receut meeting of the shareholders of the Bank of New Zealand at Auckland, which has been recently published, demands more than a mere passing consideration at the hands of that portion of the public who take an interest in finance. in order that the matter may be clearly understood it is necessary to explain that when the banking agreement was first entered into in this colony, the Sank of New Zealand did fall into the terms then in existence in Victoria, Within a few weeks after the agreement came into operation, however, they, without giving any notice in this colony of such an intention, withdrew from the Victorian agreement. So matters went on, until one of the Australian banks, whether wisely or not is a matter of opinion, resolved upon withdrawing from the agreement in New Zealand, unless the Bank of New Zealand would come into the one then in existence in Victoria, apparently under the impression that it was only fair to look for a little reciprocity at the hands of that institution. The proposal of the Australian bank was however declined by the Bank of New Zealand, for very sufficient reasons no doubt, and hence the present condition of affairs. But, sir, is it necessary to search far for reasons why the Bank of New Zealand is so anxious to obtain a slice out of the "deposit” pudding of Australia? I think not. Upon a reference to the banking returns to 31st March, just published, and upon a comparison of them with those for the corresponding period of last year, it will be seen that while the deposits and ,^ ia £ institution were increased by £18,857 only, thejr advances have increased by £702 360* It win a!so be seen that their coin and bullion was diminished by £205,921, and now amounts to but little more than one-eighth of their deposits and circulation. Surely these circumstances, coupled with the doubt as to the probable success of the Treasurer’s efforts to float the £4,000,000 loan, which prevailed some time ago, are Quite sufficient to explain the desire to participate in the Australian deposits to which I have already referred, and also to account for the restrictive, not to say harsh measures, which have in some cases been taken by the bank within the past six or eight months.

So far from improving matters, I fear that the attempt of the chairman and Sir. Murdoch to disguise the true state of the case, and, as it were, “to draw a red herring across the scent,** will have a very injurious effect.—l am, &c., J * ~r ... , ~ ~ Banker. Wellington, May 11.