BANKING LEGISLATION.

Lyttelton Times, Volume XCVI, Issue 11049, 29 August 1896, Page 2

BANKING LEGISLATION.

TO THE EDITOR. Sir, —We have heard a great deal lately about the evils of dragging private affairs before the public, but I should like to know why the overdrafts and writings off of all banks should not be published. If a man requires a loan on mortgage or upon a bill of sale it must be publicly registered. For want of a State bank the Government keeps public moneys in private banks, and ’the people are practically obliged to keep their deposits in the same. To these private banks the Government gives the right of issuing notes, including the right of duplicating the notes by means of cheques, &c. Thus the banks are in a sense public banks. And the Bank of New. Zealand is also in a sense a State bank, for just as the bank where a man deals is his bank, so is the Bank of New Zealand a State bank. Moreover, the State has all the responsibilities of the Bank of New Zealand, but it has none of the profits. Heads—the Bank of New Zealand wins; tails—the taxpayers of New Zealand lose! Surely, then, the State should take care that a manager, or a few directors, should not be able to help themselves and their friends to as much as they please of the public deposits and credit. The,, fact that a certain bank advanced .£30,000 on imaginary oats proves that it would be to the advantage of the public credit generrally that bank advances and securities should he published. And the fact that the Bank of New Zealand wrote off £850,000 in one year proves that all writings off should bo published. A bankrupt member _of Parliament is compelled to relinquish his seat. A Minister or member who owes a bank tens of thousands more than he can pay can only be regarded as “ a dumb dog ”of the banks. If members knew the advances and writings off of some of their (mis-) leading financiers, probably many of them would not have been led to vote for the two-million guarantee, “without a murmur, without investigation, without discussion and without division.” It has been represented that the Government had no time for inquiries. But it is clear that the Government knew long before that the condition of the bank was very questionable. They could have demanded satisfactory proofs of security on the reasonable threat of withdrawing Government moneys for which Ministers were responsible. That was their duty. But they preferred to be “ loyal to the banks.” But the fact that the Bank of New Zealand paid dividends a very short time before it required nothing less than a guarantee of five millions to bolster it up, ought to be sufficient proof of issuing false balance-sheets. And there ought to be a Public Prosecutor, whose duty it is to secure the conviction of any man or men issuing false balance-sheets. He should be as keen to do it as a policeman is expected to be to catch a thief, or as a terrier is to catch a rat. There is a growing feeling that men may rob with impunity, if they only do it on a large scale. —I am, &c., J. M. YERRALL.