The Hastings Standard Published Daily. TUESDAY, SEPT. 22, 1896. THE BANKING BUSINESS.

Hastings Standard, Issue 127, 22 September 1896, Page 2

The Hastings Standard Published Daily.

TUESDAY, SEPT. 22, 1896. THE BANKING BUSINESS.

For the cause that lacks assistance, For the wrongs that need resistance, For the future in the distance. And the good that we can do.

Like the " theme " of a symphonic movement, the banking question has turned up at uncertain intervals throughout the remarkable session of Parliament that is now happily drawing to a close. In the first days of the session the black cloud of a Supreme Court judgment hung over the members, and when the lengthy verdict was delivered it sabred the portfolio of the late Colonial Treasurer. The air, then, was thick with innuendoes, insinuations, rumors, and what not, and the banking business was the text of the Opposition speakers. The independent Committee of the Legislative Council was regarded, and rightly so we think, as likely to produce better results than the antagonistic body appointed by the House of Representatives for the same purpose. The report of the Legislative Council Committee, as we said yesterday, will be a bitter pill for those who expected sensational exposures of a political nature. So far as the strictly political aspect of the nauseating banking business is concerned, the Government and the late Colonial Treasurer, Mr \Va*d, have come out of the ordeal with unsullied reputations. The much-maligned ex-Colonial Treasurer, instead of profiting by his strong political position, has been shown by the Legislative jCojjncil Committee to have been grievously wronged. We are pleased to tbink

that while we Have not hesitated to condemn whit appeared to us to merit condemnation in this matter, we never doubted the honesty and sincerity of the Government in its dealings with the Bank. We have had no reason for doubt. We always believed, and still believe, that if there is anything crooked in the banking business, the crookedness is associated with men not actively engaged in politics. We desire to deal with that part of the Legislative Council report that refers to the future of the Bank of New Zealand. There are two points which stand out clearly. The stability of the Bank is assured, and it is in a position and is capable of earning the profit necessary to justify the action of the Legislature in 1895. " The strongest Bank south of the Equator " is the term we hear applied to the Bank of New Zealand. It is a pleasant fiction, for a Bank whose every sovereign is borrowed does not strike the lay mind as being in that position of strength which is unassailable. With the State behind it the Bank is strong, and it will be so considered as long as its interest payments are kept up. But let their be default and the State be called to make good the deficiency and the vaunted strength will vanish. Now the Bank, if wellmanaged, is capable of carrying on business and discharging its interest payment with punctuality. Good management will be impossible if political interference is to be recurrent. That is practically what the Committee of the Legislative Council says. And these are the two salient points of the report. The Bank is able to meet its obligations so long as there is no political interference. These two points should be rammed down the throats of all politicians, more particularly that mongrel breed that would sacrifice anything and everything for selfish and personal ends. The interests of the Bank of New Zealand are the interests of the country, and as a matter of common honesty to ourselves we should do nothing that should jeopardise the institution or cause a shrinkage of its business. The Legislative Council make two recommendations that will no doubt receive serious consideration. The first is as to the balance-sheet. The document which is supposed to disclose the true position of a joint stock company is a wonderful thing. As a rule, the balance-sheet is the most delusive statement issued, and it would scarcely be exaggeration to say that of the multiplicity of balancesheets issued in the colony not a tenth of them disclose the truth. A model balance-sheet should set forth all the details clearly so that the shareholders may see what the company is doing, and whether their capital is intact or well protected by a genuine reserve or not. The Committee thinks that the balance-sheet of the Bank of New Zealand should give more detailed information, but the " strongest Bank south of the Equator" does not do this in the opinion of the Committee, as it would be prejudicial to the Bank unless the other banks give similar information. What a " strong bank " has to fear in placing the true state of its strength before the public is incomprehensible to us ; but if it is necessary that the other banks should come into line with the State Bank in this matter, then by all means let us have legislation to bring about this much-needed reform, not merely with banks but with all joint-stock companies.

The other recommendation made by the Committee is as to the desirability of having additional representation of the colony on the board of directors. This may or may not be a wise precaution, but if it is adopted we think that the additional representation should take the form of local directorates in the chief centres of the colony. But whatever is decided upon for the better management of the Bank of New Zealand we do hope that steps will be taken to eliminate the political element—to purge the bank parlor of all politics. The future of the Bank of New Zealand lies in honest management, freed from the harassment of busbody politicians. It is to be hoped that with the expiring Parliament the Bank of New Zealand will be allowed to sink out of sight of the political sphere and be permitted to work out its own salvation.