THE Temuka Leader. TUESDAY, MAY 30, 1893. STATE BANK.

Temuka Leader, Issue 2509, 30 May 1893, Page 2

THE Temuka Leader. TUESDAY, MAY 30, 1893. STATE BANK.

The Liberal Association of Christchurch has passed a resolution urging on the Government the desirability of establishing a State Bank. We do not expect that anything will be done in that respect for ;i long time yet, although the experience of Australia ought to urge the matter on the attention of our representatives. A few months ago the banks of Victoria formed themselves into an association, and resolved to stand or fall together. The fact that they promised to assist each other, made some people say they would weather the storm, but they did not do so. The weakest of them succumbed to the first breeze, and they fell one after another as the gale of want of confidence increased, till at last the Government came to their rescue by giving such as had so far remained open a week's holiday. This was a most extraordinary proceeding. It was as much as

to say to the public, " You shall not get your own from the banks for one week. The storm reached Sydney, but at the head of affairs there was a great philosopher, who in one night passed through Parliament a Bill making bank-notes a legal tender. That put a stop to the run, for now the banks had only to get a printing press and a bale of paper to pay their debts. This was a most outrageous thing for a Government to do, yet the men who did it have often talked glibly of " a forced paper currency" and its evils. There is nothing more extraordinary than the success with which wealth can gull the public. Let wealth say that a State Bank would mean "a forced paper currency," and the public will accept it at once as gospel truth, without any further inquiry into the truth or. falsehood of the statement; yet it is as great a falsehood as has ever been uttered. It is something astounding how people can be gulled into the belief that a bank-note is more valuable than a Government cheque. A bank, ai has now been proved, can only stand while the people repose confidence in it, but a Government cannot fall uutil a foreign power comes in and conquers it; yet wealth has been able to gull the people into the belief that a private bank is safer than a Government one. The thirteen bauks which have failed in Australia owed to the public £160,045,113, but all they had in gold to pay this with was £9,412,479, and thus they could only pay about £1 out of every £lB they owed. Was it any wonder they failed? Now supposing the Government started a State Bank, what would be the security 1 Simply the whole nation. AH the laud, public and private, sold and unsold, native and European, mountain and plain, bush and meadow, from Auckland to the Bluff, and all the sheep and cattle thereon, and all the houses, and everything moveable aud immoveable in New Zealand would for in the security. On all these the Government haee power to levy taxation to an unlimited extent, and consequently all these would be the security of a State Bank. But all a bank requires is that the people shall have confidence in it, and as no sane man could ever doubt a State Bank a run on it would be absolutely impossible. As regards a forced paper currency, that too would be impossible unless it was forced as it is at present in New South Wales. We are told that there the bank-notes are made a.legal tender for twelve months. Let us suppose that in the meantime English depositors demand their money, what position will the banks be in at the end of that time 1 The English depositors must get thesr money in gold—the new law cau only apply to the colony, and at the end of the six months all the gold may possibly be drained away. In that case there would be nothing but paper money left, and as there would be no gold into which it could be converted it would become valueless. Such a state of things could not have occurred if the notes were secured by the Government; they could never depreciate in value, for no one would give a £l-note for 15s to anyone if he knew the Governmnt would give 20s for it. But it is not necessary to debate the question at greater length. It is plain that the present system of banking is terribly risky, and common sense suggests that we ought to establish something more substantial. A State Bank is the only remedy, and, besides being safe, would give us the command of a million of money a year. We could do a a great deal with this, we could build railways, roads, and bridges; and open up the back country with it, but we are greatly afraid we shall not get it for some time yet. We are afraid also that the result of making the notes of New South Wales a legal tender will have a bad effect, for it is very probable that it •" in depreciated paper currency. will sn7 Dl y , the opponents of a State Bank with a f which they will make use to frighn,.' p * \ t ~ thus it will stand in the way o„ establishment of a State Bank. THE IMPERIAL OUTLOOK. Politics are assuming a very serious aspect in the Old Countries. Lord Salisbury and Mr Balfour have done their best to incite Ulstermen to rebellion, and undoubtedly men have beeu impisonedin England for less treasonable actions. Then at the meeting in Belfast, at which Lord Salisbury was present, Captain Kennedy said that eighteen admirals and sixty-two captains in the British navy had Bworn that the navy would never be used against that part of Ireland which resisted Home Rule. He also said that 737 ex-officers of the British army- would assist Ulster in case of civil war. This is treason of the most pronounced type. We can hardly believe that the officers of the British navy who have sworn to obey lawful commands and instructions can possibly have made their minds known on the subject, and yet numbers are given with such an air of circumstantiality that Captain Kennedy's statement has the appearance of truth. Still in 1886 it was said that Lord Wolseley and Lord Charles Beresford had in a similar manner promised support to Ulster in the event of Home Rule being granted, but at a public banquet held afterwards in Dublin Lord Wolseley denied it, and said he had always been, and was still, Irish in his sympathies. He certainly did not declare in favor of Home Rule, but he made it quite plain that he had no objecion to it. It is therefore obvious that statements such as those of Captain Kennedy must be taken with a grain of salt. It is hardly possible that British officers could ever think of turning their arms against the Government aud Parliament of Hngland. Stili it is certain that feeling is running very high, when the Queen has becumo a partisan and refused to sigh the list of birthday honors submitted to her by Mr Gladstone. The old lady is getting very old, and probably ought not to be held responsible for her actions. It is, however, very much to be regretted that she has thought fit to take this step. There are aot in the whole world a people more loyal to + 'heir sovereign thau the British, but verv littie of .arbitrary conduct like this would change theni. .lheyjiave beheaded aud banished monarchs uCfore" now, and they would do so again if provoked by the misuse of the regal power. Mr Gladstone is apparently determined to be even with Her Majesty, by declining to recommend Parliament to grant her grandson, the'future king, any marriage allowance. The Queen has made a great mistake in thus provoking the rising democracy of England to acts of retribution like this, more especially as it is only a couple of years ago since another royal allowance would not have been granted only for the vote of the Irish members. Had the Irish members voted against the allowance to the Duchess of Fife it would have been rejected, but very possibly if Her Majesty shows her gratitude to them by offering obstruction to Home Rule they will not be so ready to vote for Royal grants in future. At any rate there is not wanting evidence of disturbed times.fgThe Princa of Wales's son, the Duke of York, is to be married to ths beftotbecl wife of fag

elder brother, who died not long ago. Is this history repeating itself ? Henry VIII. in the same way married the affianced wife of his elder brother Arthur, who died young, and we all know what a revolution that led to. The reign of Henry VIII., besides changing the religion of the country, broke up the old feudalistic institutions, and who knows what may happen in the coming reigns. The times are certainly out of joint; thousands upon thousands unemployed; depression deepening, and discontent increasing, with a rebellious army and navy, if what we hear is true. These are ominous signs, and it is not in such times that the Crown should become a partisan.