STATE BANK.

Lyttelton Times, Volume LXXXII, Issue 10491, 31 October 1894, Page 2

STATE BANK.

TO THE EDITOE. Sib» —In a recent article of yours I. came across the expression “ conspiracy of silence.” I thought it applied, exactly to the way in which New Zealand political dummies of both parties have avoided the State Bank question. In the Financial Statement Mr Ward said that he would not take up the time of the House by debating it, neither was the defenceless condition of the colony apparently worthy of consideration, although the utterly inexcusable appointment of the Sqrgeant-at-Arms fills forty pages or more of Mansard. But now we are informed that the Bank of New Zealand is a State Bank. Mr Reeves calls it a State Bank, and a pack of London stockjobbers call it a State Bank. The State is to have all the responsibilities and risks, the taxpayers are to guarantee the shareholders and customers of the Bank of New Zealand from all losses, and the profits are to go to the shareholders. If Mr Larnoch is right, and Mr Larnach is a great financier they say, andhe is a Government supporter, too, the colony is tied up to the Bank of New Zealand, not for ten years, but for ever, and no power can dissolve the alliance. X couldn’t describe this back legislation batter than Mr Larnach does when he calls it “ the Colonial Treasurer’s champion confidence trick.” For my part, I repudiate any responsibility for the actions of a Parliament which has allowed itself to become the victim cf such a trick. Sir Julius Yogel once said that no Act of Parliament was likely to pass which the large moneylending companies would consider to conflict with their interests, because they were bo powerful. Now, a bank being in danger of collapse, the Government first passes an Act to enable banks to pay their customers in inconvertible notes if they cannot pay in gold—then shows its confidence in the Bank of New Zealand by guaranteeing it to the extent of two millions, and next borrows two or three millions of money, which is to be placed in the same bank: And yet, if the Government had not come to the rescue of the Bank of New Zealand, where would the J 8825.000 of public money have been.; and where would the surplus have been? In New South Wales and Victoria they have had a taste of inconvertible private bank notes instead of gold (or what would ho equal to gold—convertible State bank notes), and unless the people allow themselves to be victimised by confidence gangs they will have some real State banks in Australia, and that before long. I intend shortly, with your permission, to deal with Mr Newlyn’a odd score. of .letters on the “ State bank in all its phases ” and “ the bucolic appetite for borrowing” (to quote the Newlynese lingo). Meanwhile I am quite willing to give him all credit for having agitated the cheap money scheme. I did not suppose that Captain Russell had originated the idea, but thought your paragraph proved him to have been advocating it before Mr Newlyn. Mr Newlyn is welcome to the priority. As to the “invention,” he himself declares his remedy to be “no patent,” and I think Mr Newlyn’s inventions would certainly be patented. I congratulate Mr Newlyn, however, on his financial reform league, and I only wish he may succeed. At the present time I only feel eqnal to an occasional letter on the subject, and I am inclined to think that a good newspaper fight is an excellent way of ventilating any great subject. Unfortunately, the motto of Shylock is. "J will have no speaking.” Captain Russell very well described the Colonial Treasurer as having in the Bank of New Zealand an Old Man of the Sea on his shoulders, and he was equally true in saying that no Government had ever bolstered up the banks as the present one has done. Instead of a State bank we have the same old bank Government, approved of by, London financiers, and supported in its banking legislation even by the very Opposition. But what would the present Government have said, if it had been in Opposition, to the very same legislation by a Conservative Government?—! am, &c., J. M. VEERALL.