WHAT NEW ZEALAND IS DOING.

North Otago Times, Volume XXXV, Issue 7265, 13 October 1891, Page 3

WHAT NEW ZEALAND IS DOING.

That trade is dull and money scarce, has, says the Mercantile and Bankruptcy Gazette, during the past few years, become almost an axiom with New Zealand traders. Many causes may be attributed for this state of things. Amongst them may be mentioned the tapering ofl, and almost entire cessation, of expenditure of borrowed money by the colony. A further cause, undoubtedly, is the incessant drain upon tha finances of the colony in paying interest on the public and private indebtedness : whilst the fact that so much of the capital we are trading with belongs to foreign banks and mercantile companies is a further factor. In addition to the latter cause, may be mentioned the fact that the shares in many of the hrge companies owning and working sheep and cattle runs are held outside of the colony. The Grst cause mentioned, the stoppage of the loan expenditure, may be likened to the decrease of a patient's diet ; the remaining ones resemble the old-fashioned practice of blood-letting. But, after all, they are to be regarded aa somewhat of a normal character. No young country can go on for ever borrowing. However good the security, or promising the work tu bo constructed, a timo when the State will pause in its borrowing must be anti cip*ted ; while it is equally certain that capital will flow from older countries tc these new ones, attracted by the highei rates of interest offering. It is much tc the bene6t of undeveloped countries thai it should be so. Many yam must elapse

before thero can be the accrued capital belonging to resident. In the meantime f ho foreign capital with which we are i ruding in the colony is a huge benefit ; and, if it moans that for a time the profits of working that capital are romitted from the colony, Mow Zealand all tho time is benefited by the employment it gives, and tho revenue received by the railways, Stamp Department, and other branches of the public sorvice. There is, however, another cause which has powerfully oporated during the past few years in causing the scarcity of money in tin? colony, and the consequent dullness of trade. Wo refer to tho uttitude i Assumed by the banks towards tho trading community. No doubt mercantile matters were in a somewhat parlous state in New Zealand a few years ago. Wool was down in price, so was wheat. The frozen meat was in its infancy, and hud had boomed in eomo parts to a fictitious value. Tho intention of the banks to call in overdrafts, and restrict advances, was not unnatural, The extent to which they carried out this policy may bo judged from a brief analysis of the banking returns for the past four years. The ndvnnces nmde by tho banks doing business in Australia have increased during the four years ending Juno 30, 1891, from L109, 497,000 to Ll.38,923,000. There has thus been an increase of ' L29,425,000, or at tho rate of nearly seven and a half millious per your. Of this largo increase, Victoria has received L15.035.000, Now South Wales j 1,9,817,000, Queensland L5.098.000, Tasmania Ll,300,000, and the other colonies smaller amounts. The only colony of tho Australasiau group which has decrtased her advances during the four years Is Now Zoalnud, and her advances stood at June 30 of this year at L2,118,000 less than at June 30, 1887 ; in other words, whilst all tho other colonies have received Ltrge sums from the banks towards carrying on their business, this colony hua steadily jr-ud off its advances at the rato of about L530, 000 per annum. During the last year of tho four, alone, the advances of New Zealand decreased by LI, 106,000. Side by side with the decrease of advances, tho increase of deposits has gone on most sitis^ fuctorily in the colony. During the four years ending June 30, the deposits in tho banks in New Zealand increased by Ll,855,000. At that date L12.892.000 was on deposit, being about one third the sums held similarly in the wealthy colonies of Victoria and Now South Wales, while New Zoaland deposits exceed by three millions those of Queensland, and are more than South Austnliu and Tasmania added together. If, in concluding our review of the figures su far as they relate to this colony, we ondeavor to ascertain tho excess of advances over deposits (i.e. t the extent to which the banks are called upon to assist their clients beyond the resources furnished by deposits), tho following results appear : At June 30, 1891, there was owing to the banks by Victoria, Lll,736,000 ; by New South Wales, L7,6OO,OOO; by Queensland, L7.468.OOO ; and by Now Zealand, only L536.715 ! j The figures quoted speak eloquently of the healthy condition of New Zealand. They show that this colony has been ablo to stand a tightening of tho pursostrings which could hardly be applied to any other colony without involving a serious crisis. We are quite aware that the rise in wool and wheat, and the development of the frozen meat trade, have enabled these splendid results to be achieved. There must be "real grit" and "sound bottom " in a country which j | is able, in addition to paying its way, to clear oft* its advances at such a rate as we hive been able to do. Under these circumstances, it is no: unreasonable for us, as representing in some degree the mercantile community of this colony, to point out to the banks that the time has come when their restrictive policy should bo abandoned, and when they should treat tho industries and trades of this colony with greater generosity than has marked their action during the past few yean,