FINANCIAL CURE.

New Zealand Times, Volume XXXIV, Issue 5762, 17 September 1879, Page 3

FINANCIAL CURE.

see — Total assets £16,182,477 Total liabilities 8,974,197 Surplus ... ... ••• £7,298,280 Where do they get this surplus? Look further and you will see— Total aggregate paid up capital ... £5,399,690 Total reserve fuuds ... ... 5,564,384 £7,964,074

TO THE EDITOR OF THE NEW ZEALAND TIKES. _ if]>b!lK, —The financial condition of the colony is really worn* than that pointed out in my letter c£ the 12th instant to the “ Wellington Monthly Price Current and Trade Report,” which I notice you hava to-day transferred to your columns. In that letter, in stating that the banks doing business here were using over 4-Sths of their aggregate capital in addition to the local deposits and circulation, the matter was looked at from only one point of view. If (as we |are entitled to do) we coneider the coin and bullion held by them as a protective reserve, viz., £1,769,369, as employed here, it will be seen that they are m reality using nearly all (say 9-lCths) of their paid-up capital and reserve funds in this one colony, leaving the other five or six colonies to work npon their internal resources. We ought to be very thankful to the banks for being so liberal to us, and should cease to blame them for any present stringency, except in so far as they have created it themselves by encouraging over importation. The question is, will they allow all this money to remain here ? Will they not rather seek, now that matters are in a depressed state, to return to other colonies .their share of resources thus unfairly deviated 1 If so, can we expect any ease in the money market 1 Can we expect property to maintain its present value? Shall we not rather have to wait patiently for the slow process of several years' good wool and grain seasons to bring about a recovery ? I used to think at one time that we did not want more machinery, but merely oil; but the following figures will, I think, show to any unprejudiced mind that the present institutions are unable to supply any more of the necessary lubricating material, oven if willing. Take the Government Oaxette with the banking returns to 30th June last, and you will B ftP—

Of this they have devoted to us, as shown above ,£7,208,280 At any rate, whether of their capital or resources it matters not, they hava supported the colony to this large extent; and it is a fair inference that we shall not get any more, but rather that now the ball of retrenchment has been set rolling, we may lose what we were never entitled to as, or less, gradually than it came to us. I will anticipate an objection which may be taken to my argument, viz., that I am mixing up foreign with purely colonial banks. As may be expected the proportions which each contribute either of capital, reserve funds, or deposit resources, vary considerably; but, as I desire to avoid being invidious, and only take a broad colonial view of the subject, I content myself with taking the aggregate figures of the banking returns to the 30th June last, as sworn to and published in the Government Gazette. So far as the colony is concerned, this is all that is necessary to impress upon the public mind— That, in my opinion, it behoves all those who have vested interests to preserve, and who desire to see progress, instead of retrogression, to encourage the establishment of new institutions to secure at an early date some of the surplus capital of the mother country.— 1 am, &c., Febdk. Cook. Wellington, September 16.