The Temuka Leader TUESDAY, MARCH 23, 1886. STATE BANK.

Temuka Leader, Issue 1483, 23 March 1886, Page 2

The Temuka Leader TUESDAY, MARCH 23, 1886. STATE BANK.

A . gentleman in North Canterbury writes to us as follows

“Sir,— -I write to call your attention to wbat I believe is a slip of your pan. In your article on a State Bank on March 18th, you aay what is wanted ia “a State Bank transacting business on the same lines as the present Banks ” I have no doubt you mean ‘ except that’ a State Bank should not make an advance to anyone except on freehold security, nor any advance beyond a certain proportion of the rateable value of that’—like the Government Savings Banks, in which anyone can putin what he likes and draw out what he pleases, but never overdraw.”

The writer gives several instances of influences being used to crush lire National Bank proposal, but we do not think it advisable to publish them, and he winds up as follows : —“ The more I sec of the powerful influence brought to bear every way against a State Bank, the more heartily can T congratulate you for being independent enough to have, stuck to your guns.” We thank our correspondent for the compliment, and can assure him that so far we have not found any great opposition to the pro posal. We think he is magnifying the influence brought to bear on opposing the question, and we are firmly cenvinced that the day is not far distant when even present opponents will see that the colony cannot very well get on without it.

With regard to the objection he has raised to our remarks in the article, we may inform him that we have so frequently written on the subject now that we did not deem it necessary to go into details. Our readers ought by this lime understand this question pretty well, or, if they do not, the fault is not ours. Times out of number we have informed them that om proposal was to establish a Bank that would transact all Government business, local bodies’ business, the Government Insurance business, the Post-office Savings’ Bank business, landowners’ business, and also take deposits. Of course, there would be a limit to the amount which would be lent on land, but, instead of making the loan a fixed mortgage, it could be given in the shape of an overdraft, so that the farmer could decrease it whenever he could. The resources of this Bank would bo enormous, There would, first, be the colonial revenue, about £4,000,000 ; the local bodies’ revenue, about £1,000,000 ; and the Post-office Savings Bank money, and the Government Insurance money, going into the Bank every year. These moneys go through the Bank of New Zealand at present. Then we may yell expect that the great majority of landowners would transfer their accounts to the Government Bank, %tfd, (heir business would be considerable during the year. Merchants and storekeepers would not be taken into the National Bank, unless they owned landed property, and lodged the deeds of it to secure any overdraft they might require. That is what we meant by a .Bank transacting business on the same lines as the present Banks, but we had so frequently explained all this before that we did not think it necessary to go into any details It would not be necessary for such a Bank to have any gold at all, but as, owing to the ignorance that prevails on the subject, a prejudice might be created against it, we think it would be wise to get a good round sum to start with. All the people would want to know is that the gold was there ; they would never ask for it. Gold would be pouting into the Bank from all quarters—through the Customs, through the local bodies, the Insurance Association, and through the farmers — and in a very short time it would be only second to the Bank of England as a monetary institution.

LAND SETTLEMENT.

The scheme which Sir George Grey has been ventilating on his “ stumping tour” is well worthy of attention. Ho proposes to buy out largo landowners with Government bonds, bearing interest at 4 per cent, and let the land in blocks of about 160 acres to suitable tenants. The Tiraaru Herald recently characterised the scheme as visionary. It said that “ notes- on the Algate Pump or Bank of Elegance ” would be as acceptable to the landowners as such notes as Sir George Grey proposed to buy land with. This is pure nonsense, and shows how little the iimaru Herald knows about what it professes to discuss. We are confident that a largo area of land could at once be purchased on the terras suggested by Sir George Grey, and we have held the some opinion for a long time. There is in th's colony a very large area of land held by Banks, Mortgage Companies, Land Companies, and Mortgagees, and owing to the continued depression they cannot make out of them sufficient to pay interest on the capital invested in them. For instance, the Bank of New Zealand holds enormous tracts of fine laud in South Canterbury, and when sheep are un saleable and wool so low it can be easily seen that interest cannot be made out of it. The Bank has neither sons nor daughters for whose sake it would like to struggle on until bettor times came ; it cares for nothing but interest on its money, and that it cannot make out of the land at present. The scheme under review offers the terras wanted —that is, fair interest on (he money it has gunk in these lands —and there is

nothing more reasonable than to expect that it vvoulil very gladly accept the proposal as a God-send to enab'e it to get rid of a loadstona hanging round its neck, There are many monetary institutions exactly in the same position, and consequently we have come to the conclusion that the proposal will be very acceptable to them. If go, the re is little doubt but that it will be welcomed with much rejoicing by the people, for it will give them an opportunity of securing homes of their own. We shall refer at greater length shortly to the subject.