The Temuka Leader. THURSDAY, MAY 13, 1886, BANK OF'NEW ZEALAND.

Temuka Leader, Issue 1505, 13 May 1886, Page 2

The Temuka Leader. THURSDAY, MAY 13, 1886, BANK OF'NEW ZEALAND.

The half-yearly report of the Bank of New Zealand shows that institution to be in a flourishing condition. It is refreshing that one institution is so in these days of depression, want, and low prices, even if it is one which fattens on the wretchedness of its clients. Not withstanding the depression, low prices, bad debts, and embezzlement of a large sum of its money, the Bank of New Zealand still pays its usual dividend of 15 per cent., and carries forward to next yeart account a cart-load of money, as usual. Its capital ia £1,000 : 000, yet it is trading on £14,651,087 14a sd, and paying its shareholders handsomely. Henry George tells a story of an Irish landlord, known by the soubriquet ot Cosey Murphy, who took into his head that it was too much trouble to get in and out of bed so frequently, and so be went to bed and remained there for ] 1 years. He slept in bed ; be ate in bed ; he drank in bed ; be smoked in bed ; he played cards in bed—and, in fact, he did everything in bed, while during the whole time his unfortunate tenants were ground down to the earth to keep him idle; and Henry George a*ks, Why should this be ? Why should this man remain in bed for 11 years squan deriog the fruit of his tenants’ labor ? It would be easier by far for a shareholder of the Bank of New Zealand to lay down and go to sleep for any length of time than for an Irish landlord. The 15 per cent, he receives from bis capital is three times as much as it would yield

him it invested in land, he has no tenants to worry his life out, and he would have no apprehension of being blown up while enjoying his nocturnal “ snooze ”by dynamite. Happy is the man whose capital is invested in shares in the Rank of New Zealand. He could not invest it in anything so safe and go profitable. No man can make 15 per cent out of his farm, neither can he make it out of merchandise. The farmer and the merchant may blister their brains and their hands all the year round, but the “ Oosey ” Murphy who is fortunate enough to own Bank of New Zealand shares will be better off at the end of the year, even though he never left his bed. The farmer and the merchant must pay him 9 per cent for their overdrafts and they must work. We have frequently pointed ont that it would be a good thing for the Government to secure this 15 pel cent. Almost all the shareholders of the Bank of New Zealand, as well as other banks, live out of the colony, and this 15 per cent goes to them and is lost to us. Would it not be well if the Government could beep a share of it in the colony ? and that they could do by establishing a National Bank. However, it is useless to dwell upon that point; our readers must by this time be well acquainted with the advantages of the Government establishing a National Bank.

There was one remark made by Mr J. M, Clark, who seconded the adoption of the report, which ought not to pass unnoticed. In speaking of the disadvantages New Zealand labored under he said “ she was heavily handicapped by the high rate of wages?” It was not the high rate of interest that was doing her any harm, it was the high rate of wages, according to Mr Clark. The man in England who is making 15 per cent out of New Zealand is no drawback, but the poor unfortunate working mao, whose cries of want of employment are just now ringing in the ears of Aucklanders, handicap the colony because he wants to be paid for his work. In past years probably the high rate of wages was a drawback, but at the present time no one can complain. Wages are low enough now, sheep are low, wool is low, all things are low except money, and that still refuses to come to the price level of other things. We hold that this is wrong, and that as everything has fallen in price money should also come down. If wages must come down the rate of inter est should, for it is its crushing weight that is retarding industrial progress, At the present prices no one can make 9 or 10 per cent out of any enterprise, and consequently ruin must result when borrowed money is employed. While the rate of interest remains so exorbitant, and every penny we can make or borrow, continues to bo drained out of the colony in payment of interest for loans, prosperity is impossible. The Bank of New Zealand will pay its 15 per cent so long as the English money lender will trust us, but when the end of the tether is reached, and borrowing ceases, the crash will come, and bank shareholders will feel it as keenly kb other people. BANK OF ISSUE. Mr A. P. O’Callaghan, M.0.R., in his address to his constituents at Lincoln last Monday evening, said : They had heard of the depression in th e Colony, This was caused chiefly by the low price of produce and the dearness of money. As to the first, it could not be affected by legislation, hut improvement might safely be looked for within the next two years. The price of money, on the other hand, he fairly believed might be reduced by legislation. People did not like to discuss this subject for fear of existing financial institutions, but he did not believe there was any cause for this fear. Some attempts had already been made in the House to remove this cause of depression. There was the Mortgage Debentures Bill, but unless farmers acted together there would not be much done with this. Another proposal of Sir Julius Vogel’s was, that the State should secure small loans for farmers out of public loans. This could only affect matters to a limited extent. Another plan was a State Bank of Issue. Many people did not know what was meant fay this. The view of it which he would advocate was that the State should resume the right of issuing paper which it had surrendered to the Banks. This was a question which he thought was fairly debateable. The Banks paid about 2 per cent for the right of issuing £1,600,000 worth of notes. This amount of note issue was supposed to be secured by bullion, etc.; but, in case of failure, the Banks had to pay every other liability before paying their notes. It appeared to him that it would be quite legitimate for the State to resume this right, and obtain the profit for the whole community. This should be done gradually. There was another way by which the State could get a benefit. This was, that the oolony should require 4 per cent instead of 2 per cent, as the larger amount was what Government paid for money. This was a reasonable thing. He thought, however, that none of the courses he had mentioned would reduce the price of money. It was difficult to say what legislation would do. No legislation would compel the reduction of interest, but the time was not far distant when the Companies would of themselves be obliged to reduce interest, nod any legislation that would assist this be would support. The Companies must see the folly of forcing respectab'o settlers into the Bankruptcy Court. To secure themselves they must reduce the interest rather than submit to a dead loss. Ha hoped to see some steps taken to bring about a better state of things. Our readers can see from this that Mr O’Callaghan is in favor of a Bank. He has not, however, hold of the right end of the stick, but, without doubt, it would be very easy to lead him to a just decision on the subject. it is extraordinary bow few of our representatives understand the subject.

MEETING OF PARLIAMENT. To-day the Ministry’s struggle for existence will commence, ami it is very doubtful how they will come out of it. The Wellington correspondent of the Christchurch Press says the whips of the Ministerial party estimate that their fighting strength has greatly diminished, They hare lost Messrs Seddou and McKenzie, and Mr Coster is very averse, bo that would leave Ministers in the minority of one. Taking into consideration the extraordinary desire exhibited by Ministers during the past three months, to force on a dissolution prematurely, it is not improbable that this is the tail end of the bogey with which they have been trying to frighten members into submission, for there is no doubt but that a great many of them will not care to face a dissolution. It is asserted that Ministers are desirous of having another election held under the present Representation Act, but we cannot see why they should be so. It is also stated that an effort will be made to force on a new Representation and Readjustment of Seats Act, but the country has not demanded Any such change, unless it is to reduce the number of seats. If this wen* done it would be received with gladness by the people. The Lyttelton Times publishes a forecast of the speech, It says that it will contain reference to Her Majesty the Queen completing the fiftieth year of her reign, and to her emerging from retirement to open the Indian and Colonial Exhibition ; to the services rendered by the Prince of Wales ; to the satisfactory relations existing with the Maori race, and their ready submission to the laws of the colony. Mention will be made of a Bill to <v.nsolidate Native Land laws, and th< colony will be told that instead of being cast down by depression it should congratulate itself on it not being so severe as elsewhere. References will also himade as to how local bodies can best fulfil their duties in promoting settle ment; also to making public works reproductive, and to how to develope the resources of the colony. Bills dealing with charitable aid and local bodies finances will be mentioned. Of course this may all be imaginary, hut if not it will be a poor Speech, However, it is possible the Government may think £h to act on the old axiom “ That the least said the soonest mended,” and disclose very little in the speech. As we have already said, it is difficult to say what the result of the present session will be. The West Coast railway question has been settled, and the Canterbury clique that kept Ministers in and their measures out will not have in future the same motive for sticking together as they had in the past, and it is probable that many of them will not support the Government now. They have made a stepping stone of Sir Julius Vogel to reach the West Coast railway, and there is nothing more natural for people than to throw their tools away when they cease to be useful.