THE Temuka Leader. THURSDAY, OCTOBER 1, 1891. FINANCIAL FAILURES.

Temuka Leader, Issue 2261, 1 October 1891, Page 2

THE Temuka Leader. THURSDAY, OCTOBER 1, 1891. FINANCIAL FAILURES.

This is unpleasant news which has been coming lately from Sydney. There financial institutions are crumbling into dust. It is most extraordinary that experience cannot teach people that such institutions are always dangerous. They are really in most instances traps into which to lure the unwary. For instance, one institution that went to the wall a few days ago had a nominal capital of £1,000,000, but only £4OO had been paid up, yet so reckless are the people that they invested their money in such a glaring trap, because they were promised a high rate of interest. Li a certain shop in Temuka there is a picture of the Sydney offices of one of these places. It is wonderfully elaborate and beautiful; it must have cost thousands to build, and it offers 8 per cent, per annum on deposits. Now it is clear and palpable that no person can borrow money at 8 per cent, and lend it out again profitably. The idea is absurd. The borrower must eventuaUy go to the wall, aud the lender must lose his money. Yet the temptation of the high rates of interest make people rush to such places. Without any reference at all to the fearful results of the financial crash which only a few months ago took place in America, we have only to refer to the disasters of the land boom in Victoria, to direct attention to the evils of the way in which financial operations are carried on. There was a colony, rich, prosperous, and contented, until speculators began to "boom" it. Then they had a few years of financial extravagance and revelry, winding up in hundreds amassing fortunes, and. thousands being reduced to beggary. ' A Melbourne land bank failed about a month ago, the Bank of Van Diman's Land went down immediately afterwards, and now Sydney appears to be the theatre of. financial jugglery. It is very fortunate for us that we have so far escaped such difficulties, but our time must come. Sharpers cannot practise their arts without dupes, and probably the reason we have enjoyed immunity from such disasters so long is that we have not sufficient money to excite the cupidity of those who operate in this way. But why not try to prevent such disasters. For many years we advocated the only possible remedy for all this—that is, the establishment of a State Bank. We have given it up because we found the people indifferent on the subject, and now not a word is heard of it.' Now we aa]f one question on the subject: If the Government fionfcrojled banking institutions would failures, like, these be possible ? Just let those who sneer at the. State Bank think this out. Is it possible for a Government to become bankrupt 'I It ,eerjtain}y j? not, and consequently it would not be possible for a financial institution secured by the Government to fail. There have been instances where Governments for the time being found themselves overburdened and unable to pay, but it was only for a time. Eventually they all paid, and we believe we are right in saying that in no instance in modern times has a Government failed to pay its creditors. Can this be said of Private Banks ? Are they not toppling over year after ysa»r, on,d causing the ruin aSd misery of thousands ? Jn the face of such plain facts we cannot see h<W .any pne man could object to a State Bank.

WHO ARE THE FARMERS ? ACCO»W»<? to Jjx RoJleston and the Torypress farmers will be ruined, the working men will be starved, and industry wilj be completely destroyed by the new taxation. Read any article in any newspaper, of any speech of any one opposed to the Government, and not a word will be found in either regarding large land owners. The

farmers are the persona who will feel the taxation keenest, is the principal cry, but nothing is said of the squatter. Now under the old taxation farmers were taxed a penny in the £ for everything they possessed, but now all their improvements, their horses, cattle, fences, and so on will be exempted. It is most extraordinary, how, under such circumstances, the farmers can be ruined. Then again, industries which have hitherto been unprofitable concerns have had to pay property tax. This has been changed, and now they will only have to pay taxation on the profits made out of them. If no profits are made they will have no taxation to pay. It requires a good deal of assurance on the part of any one to stand up and say industry will be destroyed by relieving it of taxation. And then, as regards the working men, it is quite possible that out of spite some of the large land owners may employ fewer hands than they do at present. The wealthy classes of Melbourne did the same thing once, and it is quite possible some of the same class may resort to similar tactics now. By doing this they will try to show that the taxation has ruined the colony, and that consequently it has destroyed the opportunities of the working men to earn a livelihood. Time alone can tell whether the wealthy classes will resort to these 'tactics or not, but as regards farmers, and those engaged in industrial pursuits, there cannot be the slightest doubt about the effects of the taxation. They will have to pay onethird less taxation, at'any rate, than they have hitherto paid, and when this has been proved to them Mr Rolleston and the Tories will find it difficult to make them believe that they are ruined. But very probably we are wrong in the meaning we apply to the term farmer. No, doubt Mr Rolleston and his friends do not reckon small farmers are worth talking about. They call them cockatoos, we suppose, and farmers in their language mean large landowners. In that case Mr Rolleston is probably right. That class will have to pay a little more than they have hitherto been accustomed to pay, and they can afford it. The cockatoos, however, must be better off under the new tax than they have been in the past, but of course that is nothing to Mr Rolleston. Cockatoos are not worthy of consideration so far as he is concerned. As for working men, even if large landowners try to execute their spite on them, they ought not to suffer. Farmers, or rather cockatoos, will be better off and will give more work. Looking at it from all points of view we think that no one need be disturbed by the angry ravings of disappointed Tories. Let us, at any rate, wait until we are hurt before indulging in such doleful lamentation* as the Rollestonians have been doing.