The Temuka Leader TUESDAY, FEBRUARY 5, 1889. STATE BANK.

Temuka Leader, Issue 1849, 5 February 1889, Page 2

The Temuka Leader TUESDAY, FEBRUARY 5, 1889. STATE BANK.

The star of the State Bank has once more risen above the horizon. One day last week a cablegram informed us that the Royal Commissioners appointed to inquire into it in South Australia had decided to come to New Zealand, on the invitation of Sir Harry Atkinson, but on the following day we learned from the same source that the Commissioners would not come for the present. In these vague cablegrams two facts are discovered: The first shows that the South Australian Parliament has decided on making proper inquiries respecting a State Bank; and the second leads us to believe that Sir Harry Atkinson entertains some ideas on the subject, , else he would not have invited the South Australian Royal Commissioners to visit New Zealand. Towards the close of last session the question was brought before Parliament by Mr Seddon, of the West Coast, and he was well supported by several members of the House. In the speeches made on the occasion nothing of note was said, and none of the members showed that they understood the subject further than that they believed in the efficacy of a State Bank as an institution that would yield incalculable good to the colony. Mr Yerrall afterwards made his famous State Bank speech, but we believe he did more harm than good by it. But, little as was said, it led to one thing —it led to Sir Harry Atkinson promising that he would inquire into the practicability of a State Bank, and it was left at that. We have never heard of it since, but the fact that he has invited the South Australian Royal Commissioners to visit New Zealand suggests that he has been thinking the matter over, and that it is probable he will give the colony his views on it before long. We are not acquainted with the full history of the question in South Australia. During the session of 1886 it was brought before the South Australian Parliament, and a speech was delivered by the Hon, J. W. , i Downer, Attorney - General, condemnatory of it. It will be remembered probably that we criticised Mr Downer in these columns at the time. It was pronounced by the Australian Banking Record the ablest speech that was ever delivered south of the line against the State Bank proposal, but when we came to analyse it we found it most illogical and senseless. It did not contain one substantial argument against the proposal from beginning to end, but it carried weight with it at the time, and, though a large number of the members of the South Australian Legislature favored a State Bank, the question was thrown out. We have heard nothing since concerning South Australian efforts to establish a State Bank, but evidently the matter has not been allowed to drop. It is apparent that the question has been before Parliament since, and that its advocates have succeeded in getting a Royal Commission appointed to inquire into it. This indicates the existence of a strong public opinion in favor of it, and that there is yet roem to hope that it will be pushed forward to its legitimate conclusion. There is one thing which we regret in connection with this question—and that is, that both in this colony and in South Australia its advocates "do not seem to understand it. They are in favor of a State Bank, but they oil seem to labor under the delusion "that paper money can be issued on the security of Crown lands, and th at this paper money will be acceptable to the people. We have not the slightest hesitation in saying that such a scheme would be the cause of incalculable mischief, because it would lead to a depreciated paper currency, and consequently it would ultimately discredit the State Bank itself. On the initial steps the success or non-success of a State Bank depends. If it is started on a wrong basis it must ultimately fail, but if it is founded on sound principles it must do au immense amount of good. It, there-1

fore, behoves those who take the matter in hand to consider it carefully, and, above all, to beware of the danger of relying on paper money as a means of carrying it.