WHAT NEW ZEALAND IS DOING.

Temuka Leader, Issue 2267, 15 October 1891, Page 4

WHAT NEW ZEALAND IS DOING.

That trade is dull and money scarce, has, says the Mercantile and Bankruptcy Gazette, during the past few years, become almost an axiom with New Zealandtraders. Many causes may be attributed for this state of things. Amongst them may be mentioned the tapering off, and almost entire cessation, of expenditure of borrowed money by the colony. A further cause, undoubtedly, is the incessant drain upon the finances of the colony in paying ' interest on the public and private indebtedness \ wilst the fact that so much of the capital we are trading with belongs to foreign banks and mercantile companies is a further'factor. In addition to the latter cause, may be mentioned the fact shares in many of the large companies owning and working sheep and cattle runs are held outside the colony. The first cause mentioned, the stoppage of the loan expenditure, may be likened to the decrease of a patient’s diet; the remaining ones resemble ihe old-fashioned practice of blood-letting. But, after all, they are to be regarded as somewhat of a normal character. No yming country can go on for ever borrowing. However good the security, or promising the work to be constructed, a time when the State will pause in its borrowing must be anticipated; while it is equally certain that capital will flow from older countries to these new ones, attracted by the higher rates of interest offering. It is much to the benefit of undeveloped countries that it should be so. Many years must elapse before there can be the accrued capital belonging to residents. In the meantime the foreign capital with which, we are trading in the colon'V is a huge benefit; and, if it means that iox a time the profits of working that capital are remitted from the colony, New Zealand all the time, is benefited by the employment it gives, and the revenue received by the railways, Stamp Department, and other branches of the public, service. There is, however, another cause winch has powerfully operated during the past few years in causing the scarcity of money ill this colony, and the consequent dullness of trade. We refer to the attitude assumed by the banks towards the trading community. No doubt mercantile matters were in a somewhat perilous state iu New Zealand a few years ago. Wool was down in price, so was wheat. The frozen meat was in infancy, and land had boomed in some parte to fictitious value. The intention of the banks to call iii overdrafts, and restrict advance, was not unnatural. The extent to which they carried out this policy may bo iudged from a brief analysis of the banking returns for the past four years. The advances made by the banks doing business in Australia have increased during the four years ending June 30, 1891 from £109,497,000 to £138,923,000. There has thus been an increase of £29425,000, or at the rate of nearly seven and a half millions per year. Of this large increase, Victoria has received £ls 036,000, New South Wales £9,817,000, Queensland, £6,098,000, Tasmania, £i 300 000, and the other colonies smaller amounts, the only colony of the Australasian group which has decreased fler advances during the four years is New •Zealand, and her advances stood at June 30 of this year at £2,118,000 less than at 30, 1877 J iu other words, whilst all

the other colonies have received large sums from the banks towards carrying on their business, this colony has steadily paid of its advances at the rate of about £530,000 per annum. During the last year off the four, alone, the advances of New Zealand decreased by £1,106,000. Side by side with the decrease of advances, the increase of deposits has gone on most satisfactorily in the colony. During the four years ending June 30, the deposits 1 in the banks in New Zealand increased by £1,855,000. At that date £12,892,000 was on deposit, being about one third the sums held similarly in the wealthy colonies of Victoria and New South Wales, while New Zealand deposits exceded by three millions those of Queensland, and are more than South Ausralia and Tasmania added together. If, in concluding our review of the figures so far as they relate to this colony, we endeavor to ascertain the excess of advances over deposits ( i.e ., the extent to which the banks are called upon to assist their clients beyond the resources furnished by deposits), the following results appear ; At June 30,1891, there was owing to the banks by Victoria, £11,736,000 ; by New South Wales, £7,500,000; by Queensland, £7,468,000; and by New Zealand, only £536,715 ! The figures quoted speak eloquently of the healthy condition of New Zealand. They show that this colony has been able to stand a tightening of the pursestrings which could hardly be applied to any other colony without involving a serious crisis. We are quite aware that the rise in wool and wheat, and the development of the frozen meat trade, have enabled these splendid results to be achieved. There must be “real grit” and “sound bottom ” in a country which is able, in addition to paying its way, to clear off its advances at such a rate as we have been able to do. Under these circumstances, it is not unreasonable for us, as representing in some degree the mercantile community of this colony, to point out to the banks that the time has come when their restrictive policy should be abandoned, and when they should treat the industries and trades of this colony with greater generosity than has marked their action during the past few years.