The Westport Times. TUESDAY, OCTOBER 15, 1872.

Westport Times, Volume VI, Issue 1013, 15 October 1872, Page 2

The Westport Times. TUESDAY, OCTOBER 15, 1872.

Pbominent among the few useful measures brought forward during the present Parliamentary session, stands the " National Currency and Banking Bill 1572," introduced by Mr Bath/rate. It may be remembered that last year a Select Committee of the General Assembly was appointed to enquire into uud report ou the banking institutions of New Zealand, and the result of their recommendations are embodied in the Bill Mr Bathgate has now introduced. In his speech upon the second reiding, he expressed himself as satisfied with the progress of the Bill to that stage during the present session, deeming it unlikely that there would be time for its mature aud proper consideration ; but there is little doubt that some practicable and needed reform in our bankiug system will be the ultimate result. The colony requires a wide expansion of banking facilities, for under the present system, notwithstanding our goldfields and our increasing agricultural and manufacturing resources, the country becomes poorer year by year, inasmuch as the willing workers in the hive of industry are systc mitically deprived of the richest portions of their '

hardly won earnings; which circulating reproductively, might bring, in ever increasing . ratio, prosperity to all classes. Like twice blessed, it blessetbhim who gives and him who takes." The evil referred to is especially felt by the humbler grade of traders and producers ; men slowly building up valuable business connections by sheer hard work and honest thrift, to whom temporary monetary help would be at times a boon and blessing, but which is denied them by the Banks, who refuse to grant the slightest assistance, howsoever commercially sound may bo the position of applicants. This is especially felt on the goldh'elds, where banking agencies are established merely for

the purchase of gold, or safe deposit of money, and where legitimate banking accommodation, if given at all, is granted to a select few. Business with the industrious classes is systematically contracted, in what might be almost termed a spirit of niggardly exclusiveness, in order that accumulating bank funds may aid paid up capital in investments, on government loans, squatting properties, and other slightly speculative wholesale ventures, tending in a very immaterial degree towards developing the resources of the country or supporting its trade and industry. It is thus easy to understand why the yearly balance sheets of our Colonial Banks, show large sums carried to the sinking fund, and regular dividends of twelve to fifteen per cent, made on business transacted, for the greater part, with money deposited by the colonists themselves ; and to meet this increasing evil, Mr Bathgate's Bill provides " That foreign companies carrying on the business of banking in the Colony, shall set aside a certain proportion of their capital for use in the Colony, and come under the same regulations necessary in the case of local banks. That to ensure the growth of capital and further the development of trade and commerce, encouragement should be given towards the establishment of local banks, to be called ' National Banks,' That in order to diminish the necessity for keeping large amounts of gold in a number of places, a central clearing house be established, whereby balances may be settled and adjusted throughout the Colony." The principle of the Bill is based mainly upon the ' American National Banking Act, 1864, the primary objects being not to interfere with the privileges of existing banking institutions, but, quoting Mr Bathgate's own words, "to Id to the security of the public iu iling with banks, and to encourage the growth of indigenous companies and local banks originating in the Colony, and carried on with capital provided by native capitalists, so that using our own capital for our own profit, our capital would go on increasing, and form a fresh basis for increased profit and advantage to the community at large." In short to have a circulation based on colonial securities, in the possession of the Government; power being given under the Bill to any five persons to start a bank, on complying with the provisions, and depositing colonial securities with the government, equivalent to the amount of proposed issue. Referring to the chances of the measure, in the event of its becoming law, fresulting in an immediate success, Mr Bathgate said in in addressing the House on the subject : —" He was aware that, at this very time, several parties were ready, the moment this Legislature gave them power to do so, to take advantage of this measure, and to start National Banks in the Colony. It was also a very favorable one for such undertakings, because, for the first time in our history, our own deposits were shown to be greater than our commercial demands. The returns in the ' Gazette' up to the 30th June last, showed that the circulation was now £650 000; the deposits, including halt million belonging to Government, £-1000,000 ; that the coin held was £1,250,000 and that all the overdrafts anc 7 discounts in the Colony only amounted, to £3,000,000; that was to say, we had at this moment at our command, £4,000,000, or £3,500,000 exclusive of the half, million belonging to Government; and that all our commercial wants were, at this moment, only £3,000,000. Our banks had acted hitherto in the way of restricting the enterprise of the commercial community by confining their advances to one or two lines ; and it was highly necessary that we should use our own capital so as to develop industry iu the multiform directions offered in this Colony. They would transact their own business upon their

own means, and they would form fresh capital from the further development of their trade and enterprise. If their banks were formed on such a system as ho had referred to, of using their own local capital for their own enterprise, the blot that rested upon thom of having their coalfields undeveloped up to the present time would not exist. If a proper, national system of banking were established, thej*would not be depending on Newcastle or anywhere else, but would have saved a lartje amount by having their own coalfields developed." The practical experience of Mr Bathgate, and the unremitting attention he has given to the subject of National Banks for years past, points him out as + he man among all others who should be able to bring this measure to a full aud perfect fruition. Doing so he will deserve the thanks and gratitude of bis fellow-Colonists.