THE BANKS AND THE DUMMY SYSTEM.

Inangahua Times, Volume III, Issue 60, 5 January 1877, Page 2

THE BANKS AND THE DUMMY SYSTEM.

t [TO THE EDITOR INANGAHUA TIMES.] Sib, — Some time since I noticed a para- . graph in your columns referring to a . general meeting of tbe sharebolders in a i particular company, tbe name of wbich it [ is not necessary to mention here, iri which , it was shown tbat a resolution was carrid , to the effect that all the gold produced , by the company in question during the , ensuing six months should go to a par* ticular Bank "at current rates.*' Now, | this is, of course, dummyism pure and , simple. That such a resolution could ) have been dictated, framed or moved by . a shareholder aoting for his own interest or that of tbe company, is otit bf the - question. Here is the case of a company , producing gold at tbe rate of 12,0000z ) per annum, by a resolution pledges itself to sell its gold for six months at " current ; rates," thus at once shutting itself out i from the benefit of any possible rise in the price of gold, or from tbe advantages f of competition, and this at a time when the possibility of other banks opening in the district was imminent. Tbe question will naturally be asked by those not sufficiently behind the scenes, how comes it that a company in affluent circum* i stances, such as the one in question, and not in any way under tbe potent influence of the commercial thumb screw, should, so to speak, throw away its birthright in , tuch a wanton manner ? Tbe answer is handy, and is' comprehended in the one term "dummies," and perhaps no more flagrant instance of the mightiness of this monster which is fy'st growing up in our midst, could be adduced tban in the instance spoken of. It may be asked also how does it come that shareholders themselves, in great part removed from needi* ness, should so far damn their own interests, and that of their co- partners; by lending themselves to such a resolution, and the explanation is that there is on tbis field a number of men who live on the crumbs that" fall from the Bank table, and whenever occasion requires they are pressed in as shareholders of an hour to do the dirty work at companies meetings. I say dirty work, but I do not precisely mean it in tbe full sense of its offensiveness, and I will therefore say " unfair work." It is unfair, because no' independent shareholder would lend himself to it,

nnd it is therefore done urnler compulsion. The fact is quite clear that it is high time this dummy monster was strangled out of existence in this field, and the very best way to begin to do Ibis is stamp it as downright dishonest, and everybody lending himself to it witb dishonesty, and to scout its abettors from all' respectable society.' ' else but dishonesty is it for a man to accept a transfer for a few hours for the purpose of sitting at a meeting of shareholders to advance tbe interests of a bank not only against all comers, but, as in tbe case under reference, against tbe interest of tbe Tery company itself. If it is not sailing beyoßd the legitimate grooves of Bankingbusines9 to resort to sucb ex'remes, then the sooner we stand up to place a check upon it the better for our common lot. The time bas not yet come wben tli© " almighty dollar " shall carry the sway over every principle of public rectitude, and until it does "daiamyism" ought not to thrive and luxuriate here as it does. Down country shareholders wben tbev lend their proxies to a Bank possibly may not be aware how tbey are cutting tbeir own throats, and it is the duty of those here to pbirit this out, fbr once cut off the supply of proxies from tbe unsuspecting victims living outside the district, and the monster will be totally disabled. What consideration has any company received on this field from the Banks that shareholders should exteud an undue advantage to them. Twelve and a-balf per cent, is tbe privilege which all companies on tbis field have enjoyed for advances, and why in return should the Bank or Banks get this extra advantage of bqying tbe gold at their own price P I say the principle is a rotten one, an illegitimate j one, and as regards the community as a ■ whole, an evil an pernicious one, and it is for every man holding an interest here to rise up against it. I have already trespassed perhaps unduly upon your space, and must therefore closp tbis letter, but as tbere are yet numerous points to refer to I shall crave your indulgence on another occasion concluding with this remark, the truth of which cannot be impugned, that it has come to this on t ts field, tbat tbe Banks here — but one in particular — can, under the reigning ays* tern, absolutely elect its own directors, , pass its own resolutions, work the bittery or tbe mine just as it thinks fit, and generally do as it damn Tell pleases witb everybody and everything. I am, sir. Yours, &c, Anti-Dummy. Reefton, January q, 1577. -