New Zealand Times. (PUBLISHED DAILY.) FRIDAY, FEBRUARY 2, 1877.

New Zealand Times, Volume XXXII, Issue 4950, 2 February 1877, Page 2

New Zealand Times. (PUBLISHED DAILY.) FRIDAY, FEBRUARY 2, 1877.

A CABLEGRAM in another column reports that the Bank of New South Wales has withdrawn from the agreement hitherto existing amongs the banks doing businessin Victoria., Underthis arrangement the rates of discount were fixed as follows ;—65 days, 7 per cent. ;95 days and 125 days, 8 per cent.; longer currency, 9 per cent. It seems that in Sydney the rates have been about I 'per cent, lower, and m Tasmania in certain instances 2 per, cent. ( lpwer. ihe result has been great complaints, of, the ch.eck to enterprise caused by the combination of the banks,-and moreover the .diversion of business from the ordinary channels, mauy. Melbourne firms having been in the habit of sending mils to the neighboring colonies to be discounted. The Argus, in an article a short time ago, commented on the anomalous state of things, in existence, and though its remarks applyi to the September quarter, they will serve asjan illustration., It'says:—'We have > beforejis a. summary of sworn returns showing the posifcioii pf tlie various banks in this colony pn phe 30th September last. From .this document we learn that at the da?te, mentioned their liabilities anibunted to, £15,593,314, r/wljile their assets were estimated at .£22,9.39,433. Their, note circulation was 0n1y?'5,422 while they had coin and bulliouj to .the value ,of £3,245,445, Respective of,Go veriimeht securities,- which to a certain extent v they are allowed to hold as a cover for, thpir .promises to. pay. Their deposits and capital 'combined amount to £22,524,150,. ivhile the whole„of, the.. debts due,!to them;. “ .notes, ..hilla ,of exchange, ahd,,alj stock and fqnded debts.: of , every description, except notes, bills and balances ” duo to tlieni from other banks; is only £18,421,281. Surely prudence does not require that £4,202,866 shall ,be kept, absolutely idle. It is necessary, ofcourse, to have ,a’margin, but banks may:he cautions without holding 20 per cent, of their funds ,in reserve. . the ( returns from which we are quoting were prepared, the money these institutions>;have at their disposal must have greatly increased.. The three million pound loan has. been floated and realised, and a large portion of the season’s wpol turned into .cash. Managers must be positively at their wits’. end : to. know how to employ the funds that\ are' coming into their keeping from all quarterslj' and yet, we do not hear of any proposal to create a demand for money in the obvious and legitimate way.