Saturday, October 14, 1843.

New Zealand Gazette and Wellington Spectator, Volume IV, Issue 289, 14 October 1843, Page 2

Saturday, October 14, 1843.

The reduction of the rate of interest under the pressure of circumstances in a colony^ is a question that affects the merchant and the agriculturalist. At Sydney, a reduction has been made from ten per cent, per annuni to six, upon bills which have not more than three months to run ; and upon enquiry w& have ascertained that the example was set by the Union Bank of Australia. The reason of this reduction must be owing to the crippled state of mercantile transactions in New South Wales, and prudence has dictated to the Bank to which we have alluded, that the cords of accommodatiou must not be pulled too tightly under existing difficulties. The principal point to be regarded in conducting banking business, is the security* and respectability of customers, and if these two qualifications are -combined the banker may with safety pull an individual through kls temporary embarrassments. Much caution and circumspection has been and is still requisite in Sydney and the other Australian colonies. Trade has frequently been of a fluctuating character, and speculations in land and live stock have been outrageously large, and wholly inconsistent with the resources of the capitalist. Land in Australia has been driven up to a fictitious value & jobbers have been playing a reckless and ruinous game. The price of sheep has varied, within the last eight years, from 555. to 2s. a-head ; and other speculations in those colonies Have proved equally destructive to the expectations of the, speculator. The demand for stock has been rapidly decreasing, and the want t>f pasturage has driven the owner- of 'flocks *o the melting of tallow and the manufacture of hams.

But these are causes which are not operating in this Colony — causes of a totally distinct and different character have been, and are still affecting here the interests of the merchant and the farmer. The rise in the price of land, since the settlement was first established, was gradual and- according to the demand ; it was not the result of over speculation or land jobbing ; and if it is of le»s extent now than it was a few months ago, jit it only owing to those causes which are still so seriously affecting the Colony. The importation of stock, it is true, has been restricted by the want of sufficient pasturage,' anl until the question of the Land Claims i$ settled, food for cattle must necessarily be scarce and limited. Still, though the merchant and farmer continue to suffer from tb> operation of untoward circumstauces, this causes to which those circumstances are attributable are not those of an unhealthy condition of the Colony, and should not be so regarded by any one interested in the welfare of the settlement.

The Branch Bank at Wellington, up to a recent period, afforded accommodation, as we have been given to understand, almost equivalent to the wants of the settlers.

The rate of discount was high ; money i was required for carrying on the operations \ of the merchants and agriculturalist, and none, I objected to paying £10 per cent., the rate at j which accommodation was granted. But &'l period of temporary depression has arrived, \i during which the Bank, as well as the settlers,. jj ought to make a sacrifice. A precedent for- ; reducing the rate of interest has been estab-v lished in Sydney, there is no reason why it '\ should not be followed ont here. The Bank' here is an off set from the same parent in London, and if the Manager at Sydney is content to discount at six per cent, where such a state of insecurity exists, surely in this colony, where the state and position of of all classes is so much more healthy and wholesome, increased facilities should be afforded until the present difficulties are overcome and removed.

The settlers came to New Zealand with the j hope of .bettering their condition ; they did not emigrate for the sake of indulging in idleness and indolence — and backed with energy, zeal, enterprise, aad greater facilities in the way of Banking accoraodation, — their agricultural pursuits wijl be increased, their j exports sufficient to meet their imports, tnd their commercial ttajjia^oiis, of 'g**«ter, importance fo the GoTfony; '• " '-■' \