THE Wairarapa Age MORNING DAILY. MONDAY, MARCH 1, 1909. THE BANKS AND THE SLUMP.

Wairarapa Age, Volume XXXII, Issue 3126, 1 March 1909, Page 4

THE Wairarapa Age MORNING DAILY. MONDAY, MARCH 1, 1909. THE BANKS AND THE SLUMP.

In the last number of "The Citizen," a journal issued fortnightly in Wellington, there appears a somewhat original article, written by Mr J. B. Holart, on the banks and the bad times. Although there is much in the article that cannot be agreed with, at the earne time, there is food for reflection in the contention that the actuai capital of the banks operating in New Zealand id utterly inadequate to enable them to conduct business in such a way as to supply the needs of this prosperous Dominion. The Premier has boasted again and again that "all our eggs are not in one basket," but the happenings of the last eighteen months have demonstrated as plainly as can be that our eggs are just as much in one basket as ever they were. A sharp decline in wool and this country is immediately threatened with slump. It is possible for the Duminion to get away to a large extent from such a position, and if the Go-

vernment had vigorously discharged their must responsible duties for

years past in a manner commensurate with the degree of their expressed patriotism, we would be to-day in a much more slump-resisting condition than we are. But to revert to the article to which reference has been made, the writer declares that "under the cloak of saving the Bank of New Zealand it was decreed that no new banks could enter or be organised for business in New Zealand. We have to-day only five banks feebly trying to do business in a field which is much too large for them. We have banks so overpressed by their policy of helping non-producers, land speculators and English interests that the interests of the community at large must suffer. We have by reason of the principles in which banks carry out their business a state of affairs which at any moment may bring about a recurrance of the times of 1892. This may appear incredible, but it is nevertheless true. Owing to our outrageously foolish banking laws there is no possible relief to be expected from the five banks which hold the monopoly of banking in the Dominion. Advances are being called up and assistance is beins; refused by the banks in all directions. Industrial development is practically at a standstill, and the valje of commodities and properties depreciated." Mr HoJart proceeds to show, at any rate to his own satisfaction, that the depression is unwarranted, and urges that the primary industries are not only injured, but that the secondary and manufacturing industries, which give town employment to many are equally injured. Among other observations the writer remarks: "The average reader will naturally conclude the bank monopoly is a very powerful thing in itself—that it is a golden monster of large capital. , This is not in accordance with facts. On page 36 of Dominion Banking it is set forth that banking capital in New Zealand is only £2,000,000; while the public provide this Bank- | ing Monopoly with £23,000,000 of deposits and notes. The Standard Oil Trust of America has enormous capital of its own, apart from what it controls through banks and insurance companies. Our Parliamentmade Bank Trust, in the matter of its own capital, is a fancy concern which does not deserve the false credit it receives. For every £1 the Bank Trust has of its own, the public has covered such £1 with £lO. .... The conclusion of the whole matter is that Parliament must remedy the gross balking wrongs it forced on this country by its legislation. The matter is urgent and of prime importance. The depositors should use all their efforts to bring about banking refo-m. Have they not £23,000,300 at stake—the greatest amount of capital invested in any business in the country? Borrowers and lenders both suffer. In the interests of £23,000,000, and in the widest public sense, we need banking reform. We must get it. Or ehall we wait for wholesale bankruptcy involving enormous losses to capital and labour?" Without either agreeing or disagreeing with the general tenor of Mr Holart's article we may safely express the opinion that a Socialistic democratic people such as we have in New Zealand certainly will not endure unnecessary hardships and privations if they can see their way to avoid them. Financai reform— ; f it may be pu' that way—cannot lie far distant in the future.