THE Temuka Leader. TUESDAY, OCTOBER 23, 1894. BANKS V. FARMERS.

Temuka Leader, Issue 2728, 23 October 1894, Page 2

THE Temuka Leader. TUESDAY, OCTOBER 23, 1894. BANKS V. FARMERS.

When the farmers of this colony awaken this morning and see the Parliamentary division on the last Banking Bill, they will no doubt want to know whether, notwithstauding all the affectation of Liberalism, there is not one law for money rings and another for themselves. Bills brought forward by the Government to guarantee admittedly insecure monetary institutions have passed through Parliament almost without discussion by overwhelming majorities, but the measure which aimed at guaranteeing cheap money for faamers met with strenuous and determined opposition. The Bill guaranteeing £2,000,000 for the Bank of New Zealand passed in one night, and on last Saturday another measure guaranteeing the notes of all the banks in the colony met with very little opposition. We do not at all complain of the opposition offered by Captain Russell and hie followers to the Cheap Money Bill of the Government. It has come to be a recognised fact that it is the business of the Opposition on all occasions to prevent Government measures passing if they can. The theory is that it is the fejjainess ot the Opposition to criticise and pojof out the weaknesses in Government measures, and assist iu putting them in workable shape; but the practice is to oppose everything, whether right gr wrong and to turn out the Government as j»po'n as possible. Bearing this in miad, W g fiud no fault with Captain Russell, although hjs position forced him to stultify his previous utterances, but we do find fault with professing liberals who entered the House as supporters of the. Government, and yet opposed certainly the best and most Liberal measure of the whoje fission. This was nothing more nor less than to guarantee a loan of £1,500,000 for the fanners pf New Zealand, who had land to give as security for it, but several professing Liberals voted against this who raised not the slightest objection to guaranteeing £2,000,000 for the bank, whose security, to say the least of it, is extremely doubt- | ful. As soon as Hansard reaches us we •' Mnd to took very closely into this !llv - ... and show Jjiqjv every member matter, -•-. ; but meantime it voted on these may be interesting to rei£- * " 1 >*i' o ii, amendment on banking le^" Ul * v '- ~' which on last Saturday passed througu the House of Representatives on a division by 49 to 16. This Bill amends the Note Issue Act of last year, under whioh the Government had power to make notes a legal tender. Last year's Bill provided that the Governor-iu-Council could proclaim bank notes a legal tender if the bank could show that its assets exceeded its liabilities by a sum equal to its paid-up capital and reserve fund. The intention was to provide for a panic, so that if a rush were made on the bank the Governor-in-Council could declare bank notes a leg;il tendo: 1 , and the creditors of the bank would have to take them in lieu of gold. Herein there lias been provided a safe-guard. The bank would have to show that it was sound before its notes would be declared a legal lender. It would have to show that it hud a sum equal to its capital and reserve fund, over aud above its liabilities: but tho now Bill passed hist Saturday does away with that, and the bank notes of any bank, can, when this becomes law, be made a legal tender, aud bo guaranteed by the Government, provided it can show that it can pay 20s iu the £. Now it will bo quite plain to any one who remembers the exposures of tho last few years, that no reliance can be placed on balaucosheets. The Bauk of New Zealand paid

15 to 20 per cent, and carried tremendous sums to reserve until the crash came Bix or seven years ago. The meeting of the bank held immediately before the panic legislation of the 29th of June last also made the affairs of the bank look wonderfully prosperous. It was so with the N.Z. Loan and Mercantile Agency Company, and so with every institution that has ever come to grief, and consequently we think that not the slightest reliance can be placed on such balance-sheets. That being so, what is the meaning of the measure which passed Parliament last Saturday without a protest from those who opposed cheap money to farmers ? It means this: that should a panic arise in this colony the Government would guarantee the notes of all banks without any security whatsoever. These Liberals have agreed to guarantee £2,000,000 for the Bank of New Zealand and also a noteissueof £1,000,000, making in all £3,000,000, yet they opposed the proposal to guarantee half that sum for the farmers of New Zealand. In making these remarks we do not wish to find any fault with what has been done. It is scarcely possible that the Government will be called upon to declare bank notes a legal tender, and it does not appear to us that the slightest harm will come of the power vested in the Governor in Council. What we desire to point out is that these Liberal members voted for guaranteeing £3,000,000 for the banks whose security is doubtful, while they opposed cheap money for farmers, whose security is undoubted. We trust that the farmers will not forget this when called upon to vote at the next election.