The Daily News TUESDAY, AUGUST 11. A STATE BANK.

Taranaki Daily News, Volume LI, Issue 198, 11 August 1908, Page 2

The Daily News TUESDAY, AUGUST 11. A STATE BANK.

Itis hardly to be supposed Unit because j tilt' lion. \V. I'. Reeves is about to übair- f don liis ollicial connection with the Do- , iiiiniun he will erase to take a lively t interest in the progress of tile colony. | On the contrary, it is to lie expected that lie will eolllinue to give much of his thought to the land where he lived so long, and llie people of which, on the whole, have not been particularly unkind to him. At the twelfth annual dinner of .New Zealauders held recently iu London, the speech of the High Commissioner was hopefully bright and lull of good things. One remark which fell from him is worthy of more than ordinary iittention. lie pointed to the fact that the Bank of New Zealand had added to its reserve, and made ll ,t;;iill,(lOO in Iwo years. "Thai was suiuolhiu«," he said, "of which no bank in ,i„. "world would feel ashamed." Tie' lliirh Commissioner was careful not. » buast overmuch; but the value of his observation lies iu the facl that it serves to direct public attention to llie position of the l'.ank, what the Hank owes t„ the Dominion, and what it is doing | lor the Dominion in. exchange.

There was a time when this institution, now so prosperous, was upon the bmi'< of failure—when the mere closing ot a ligurafive door would have lum.glu i iiuo th<' Bankruptcy Court, and involved many of its shareholders m nun. Hie State, no doubt moved by cons,.lerations alVeeling the wellare of he ell i. population, hurried to its assistance and saved the situation. Subsequently, m order to avoid the recurrence of a possible similar tlfreatened calamity, the | State insisted upon having a share ,n the management, and through the management of the representatives ot the State the institution was placed upon a sound basis. The State not only saved i Lirk. but made the Bank as it ,s 10-div to those who declaim again*. State management of such institution* the Bank of Now Zealand presents itself as an'object-lesson.

ought to huvo don, was to " | l ; \ the Buik over altogether, paying ll " nrel older* for their interest accord- £ to the value quoted for thojr share, .She market immediately prior to u -rt;;:.i^r»^ carries behind it the entire erect r>. the eoloiiy bestows upon it an immense. advaX-e over all institutions, ot a si.m----i ~aturc •T» anv institution whose imsincss is with the general public, what may be termed sentimental eonsideiaUons are not without their value; to .. bank, particularly, the confidence ot the üblic means everything. Then, !>'' Snk, hnvinsr the use of the. depar.£i„til balances of the U«vcr».»c.«, moneys whieh cannot be lelt at in u deposit, and the entire revenue an e. penditure-auiounting to many in. Uou '-passing through the Bank alio d* > the use of an immense capital. _ In ~, the cullers of the Hank are being hl.nl with moneys belonging to the peop sjthe Bank is trading cm moneys not inperlv the property of the sharehode at all This serves to explain how -the. Bank comes to be in such a prosperous position that no institution .m the wo d !. W0 uUI be ashamed o." Most sens,, ..c-sons will, no doubt, be of op nmn that, not any body of private shareholders, but the people should denv. such prolits and advantages as »u) «' obtainable torn the use of the peoples | money.

When it is charged against ihc advocates of a State Hank that they at" desirous of setting up a printing-press and reeling "IT Stale notes by the ton, thinking mere pieces of paper wen; moner, nothing can be further from tue truth. In France, shortly alter the gro.u revolution, such a thing was done, and itended in disaster. Klato notes w-re issued on the security of the iimhseiU-.M estates of the emigrant nobles, vim i, of course, could not be brought into cuireucv, and the iii'sl success kd the unthinking into a course of wild exiravi..auce. Notes to the value ol Ijiili-m; were issued. Now, the unthinking Im a up this illustration of wild Io.K .is a solid argument. In the tinted Na;es „.,„, n,.,k, h.ivc proved an ui'. plained sun-ess. Every -Stale lias its lb.' Northern states would never h.'-. been able to have kept the I iiu-u >■ gether. Here, again, the unth-nkiiig use as an argument the fact uiai :...( IKlU . s _the greenbacks-issued by tic Union during the war fell tar Iku;.. oar.' It would have been astounding i. they had .not, seeing that the bank hid no gold reserve with which to suppor. I its note issue.

In this Dominion there would be no advocates of a Stale Bank unless amp.e securit; was afforded that the business of the Bank was to be carried on in accordance with the sound banking l>r»ciples now so well understood. Banking authorities are Agreed that it is pcrfc-ci- .-.- safe for an institution to issue not.'s lo an amount ill value of three times its -.old reserve, and no one proposes thai 'Vic State should lie allowed to go bevun.i this extent. Instead of going upon ihe market and borrowing moiu-y upon which interest has to bo paid, the credit of the State can be safely used to the extent of three times its goal possession. As things are, tins -Dominion has assets-its credit and its monev-of indubitable value which it does not use. There is, however, in Parliament a small party, of which Air. hn is the recognised leader, who are anxious that the money and the credit of the people should be utilised for the benefit of the people instead of putting dividends into tlie -pockets of shareholder who but for tho action of the State, would have been ruined. Of course, it will be urged that this is another Socialistic proposition, and that can scarcely be denied, but the question of tlie profitable utilisation of the resources of the countrv should not be. obscured iv foolish"erics of that nature.