The Temuka Leader TUESDAY, FEBRUARY 4, 1890. A STATE BANK.

Temuka Leader, Issue 2003, 4 February 1890, Page 2

The Temuka Leader TUESDAY, FEBRUARY 4, 1890. A STATE BANK.

Ilf bis address to his constituents recently, Mr Larnach was asked his opinions regarding a State Bank. His reply was that he did know what our creditors would think of it. What we would like to know is, What have our creditors to do with it P They have no right to object; all they have a right to expect is 20s in the £, and a State Bank would not debar them from getting that. Ihe fact is, our creditors ought to be very glad to see it established, because it would make the colony more prosperous, and put us in a better position to pay our way. It ia absolute nonsense to say that a State Bank would interfere with our credit, but even if it did it would not matter, because then we would not want to borrow any more money. Mr Larnach ,no doubt contemplated depreciated paper money when he spoke like this, but even that would not in any way interfere with our credit. We do not pay our debts now in paper money—we pay them in gold—and if a State Bank were established we would have to continue to pay them in the same coin. All our creditors live in foreign countries, and we must pay them in gold, for nothing else would do. We get "gold now for our exports; we send our products to foreign markets, and sell them there for gold, and with this gold we pay our creditors. If a State Bank were in existence we would have exports, as we have now, and would thus be in a position to pay. The State Bank question has, therefore, nothing to do with the creditors of the colony. As regards depreciated paper money, su«h a thing would be impossible, if properly managed. Paper money could never depreciate ia value so long as the banka continued to take it at its full value. If a man gets a note and the bank gives him 20 shillings for it everyone else will give him 20s for it. If paper money were issued by the Government now, while the banks have their own notes, there cannot be the slightest doubt but that it would depreciate in value. The banks would not take it, and consequently it would depreciate. But if the banks had ne paper money of their own they would be very glad to get it. They could not carry on very well without paper money; they would find it very awkward to pay everything in coin; besides, the loss of gold would be enormous. They would therefore be glad to get State Bank notes to circulate if they had none ©f their own, and if the right te issue paper money were taken from them they would be the first to beseech the Government to issue notes. The right to issue paper money belongs without doubt to Government, but the Government has sold this right to the banks now for the paltry consideration of 2% per cent. Let the Government resume this right, let it cease to allow private banks to issue paper money, and a State Bank paper money cannot possibly depreciate in value. The whole thing is as simple as A.8.C., but if the people will not take the patter ia ban 4 it is no use saying anything shaat it The hanks have bought the monopolj issuing money, and so long as they to exercise that right it would be useless for the Government to establish a State Bank and issue notes. The question is, Are the people to allow this monopoly to remain the property of the banks, or are they going to exercise it themselyes ? Sir Robert Stout said that if the Government issued the notes it would amount to a loan of one million a year without interest. This ought to be worth looking after. This is the monopoly the Government gives the banks at present.