THE BANK OF NEW ZEALAND. (To the Editor).

Te Aroha News, Volume VI, Issue 309, 20 October 1888, Page 2

THE BANK OF NEW ZEALAND. (To the Editor).

Sir, — It is possibly not too much to suppose that human nature is still leavened with sufficient spice of the Old Adatn to have a somewhat pleasurable sensation at the misfortune of others ; especially if such harmonises with what one may imagine is a sort of retributive justice, and is also in accord with ones previous predictions : And such are my feelings with regard to the position of the Bank of New Zealand, as disclosed at its late general meeting, which, though not quite as bad as possible, is not worse than I anticipated, when, at its previous meeting no dividend was declared, andthesinking fund encroached upon. By such a course anyone might have given a forecast of what might be behind iV the scenes, yet the Press almost universally lauded and! extolled the " courage and honesty" of the directors in so boldly facing the difficulty — a step which brought much inconvenience to those who chiefly depend on their dividends for their income, and which, if the Bank had then still L 500,000 of reserve to the good, should never have been resorted to. Printer's ink seems to have t;ro capabilities, one to blacken by possibly un^ just detraction, the other to brighten by possibly more dangerous laudation, and it would be wise for the Press, of the Colony at least, to accord to the public the credit of being able to form its own unbiassed opinion, especially when the system of banking such as has been pursued has been prominently before its notice now for many years, and with what good results to the community at large commensurate with what might and ought to havo been there can hardly be but one opinion. Long before the egg that produced this precious chicken of a Bank had been placed in the incubator of certain heads, and which, had it been addled,- might have proved no 1 m'isfortufle y I had occasion to draw the at-

tention of a raairnot ignorant of finance, and also that of the Press, to th» large amount of deposits held by tho branches of the Australian Banks carrying on business in New Zealand, compared with the small benefit conferred by them on our commercial and agricultural interests, my conclusion being that the time was nearly ripe to initiate a banking institution, provided such could be protected by sufficient safeguards as to save it from getting under the control of an interested few, and being used chiefly as a means to bury money in land, that dead investment for a Bank. I should like to know how much the Bank of New Zealand advanced to the outside public, and how much to its directors and office-bearers, and where its losses come in under these heads, and what proportion they bear to any losses incurred in the usual and legitimate advances in commerce. By a judicious selection of country agents, men of some local influence, not held subject to periodical removals like a police constable, but familiar with the position of all their neighbours in town and country, much good could have been conferred by legitimate advances where required, instead of farmers and woolgrowers having to pass all their produce through the sweating operations of middlemen and commission agents ; while small traders might have been rescued from being under the thumb of a few big importers in the largo towns, to be swallowed up with high prices and heavy discounts, and commissions on their, renewels, however healthy their book debts may be. Can any of your readers point to a single instance where the Bank has ameliorated the pressure of an unforeseen emergency in the affairs of the farmer, or aided him as it might have done, in a safe advance for the improvement of his land ; unless possibly with the view, or result of his being handed over to the tender mercies of a certain Loan Co., for I believe that as a rule this Bank did not like to visibly appear as putting on the screw, and it is not for me to here recapitulate every little story that may circulate in both North and South, yet if there is truth in these little interesting, though to some seriously eventful gossips, all the shame of the existing state of our Colonial depression should hardly be saddled on that at one time over-estimated Vogel, as an Israelitish scapegoat, as, had the Bank been conducted more on the system pursued by the Scotch Banks, when Scotland was much poorer than it is now (and from which position, notwithstanding its generally poor soil and always objectionable climate, it was enabled to emerge by its Banking systom, and the innate energy and thrift of its people), New Zealand would have been in a more prosperous position at this trying time. Perhaps some may instance the City of Glasgow Bank, in refutation of this assertion, but it is exactly a case in point, as that disastrous concern was brought to ruin chiefly by travelling in the same lines as the Bauk of New Zealand, and I have more than once used its deplorable collapse "to a moral if not to " adorn a tale. i A very large share of our Government business has been conferred on this establishment, and it would seem not altogether without risk, but it is to be hoped that our Government financiers were, like Caesar's wife, " above suspicion," and that in no case was it understood that there should be a quid pro quo, but now that the veil is lifted we may hope that other Banks are at least not debarred Irom a share in the loans (which for a time I hope will be nil), and the Government accounts throughout the Colony. I can hardly conclude these already too extended remarks, without alluding to one or two of the many abortive attempts which the Province has made to carry out industries which have succeeded in the other provinces, notably the exportation of frozen meat, and latterly the woollen factory. One can form his own opinion as to the causes of the want of success of these find other industries, j one of which I think is not often admitted, j viz., the want of self-reliance and go. There seemed to be a clique in Auckland ' who thought that nothing could or ought to succeed unless fostered under their auspices, that no land should be bought by fresh arrivals unless through them, and new come is were persistently ' shepherded' with that end in view from the time they might set foot on shore, and possibly be soft enough to be led into an unfortunate purchase, or leave in disgust. But proj essionat land sharks may have a certain impregnable status amongst use now fortified by a late judicial utterance that " the man who went outside his legitimate business, and plunged into shares and land syndicates, would not get his discharge without Very careful consideration." I am, etc., J. M. Senior. fe Arohn, 15th October, 1888. P.S. It is only since writing the above that I have seen the account of the meeting of Bank of New Zealand shareholders on the" 11th, and on which I may have a few remarks to make. J. M.