THE N. Z. BANK AND THE GOVERNMENT ACCOUNT.

Patea Mail, Volume V, Issue 466, 11 October 1879, Page 2

THE N. Z. BANK AND THE GOVERNMENT ACCOUNT.

(From the New Zealand Herald.) We have it on authority that the Bank of New Zealand, being dissatisfied with the terms on which the Government account is now held, has given the notice provided by the agreement for the termination of the existing arrangement. It may be assumed the directors have well considered before taking such an important step, which, shows a very different appreciation of the value of the account to that held by those who have not experience of its working. We are not in a position to express an"opinion on the merits of the question, but the course now adopted by the bank leaves the Government free to take whatever action may be most conducive to the welfare of the colony. The notice given by the bank has all the more significance in the fact that the account is likely for some time to bo largely in credit by tfie contemplated negotiation of the five million loan, which proves that it cannot have been the anticipation of being called upon for advances which led the directors to the course they have adopted. Looked at from a colonial point of view, we think the severance of a connection which has existed for so many years is to be regretted, as the long continuance of that connection may of itself be assumed to be the best proof that, on the whole, the requirements of the Government have been well met by the bank. It is not to be supposed that any establishment would incur the heavy expenses and responsibilities connected with the account without a fair profit; and if the point involved is only a question of terms, we should think the Colonial Treasurer will see it to be to the interest of the colony to have these revised, rather than incur the many inconveniences which a radical chance would involve.

In giving this notice, however, the directors no doubt contemplate the possinility of losing the account, and have counted the cost; and from this point of view it will be satisfactory to the shareholders of the bank to be assured that in die step now taken their interests have not been negiected. We nave alread)’ expressed our opinion on the subject of a divided banking account; the working of which has proved so unsatisfactory in other colonies, and the only merit of which is iln>t it makes the banks the masters of the situation, and enables them successfully to withstand pressure by tiie Government which a s’ngle bank could not weil resist. From a banking standpoint, a strung combination of banks is their safety ; but we do not envy the position of a Colonial Tieasurer who is obliged to face such influence at a tiiye when he requires advances. There wijl no doubt be more light thrown upon this matter during the present session of Parliament, and we purpose to return to thd subject at a future time.