THE New Zealand Mail. PUBLISHED WEEKLY. FRIDAY, JANUARY 18, 1895. CHEAP MONEY.

New Zealand Mail, Issue 1194, 18 January 1895, Page 20

THE New Zealand Mail. PUBLISHED WEEKLY. FRIDAY, JANUARY 18, 1895. CHEAP MONEY.

Now that the scheme is getting into full swing, we ask ourselves the question why money should be very much dearer in the Colony than in Great Britain. There were many reasons for the difference some years ago, but there are none now. Money is falling in all directions, and, therefore, must fall here. The equalisation of the price is one of the benefits which the scheme has already brought within measureable distance. It is possible that before many months three millions will be circulating through private hands. And, as a matter of course, if that comes about the rate of interest must everywhere fall considerably. The opponents of the scheme contend that the fall of interest is a great economic change which is progressing all , over the world, and they conclude that the movement would have embraced New Zealand duly in the course of its development. However much this rather more than half truth may make us smile, we can at all events see no reason why people who admire the principle of cheap money should cavil so strenuously against the means by which it is being brought about. Two things are before us to consider. One is that the settlement of the land cannot be allowed to degenerate into the banishment the settlers from the land from sheer inability to pay interest charges. Another is that in the great markets of the world our produce must not be handicapped by rates of interest very much more heavy than those ruling in tie centres of those markets. The advantages of securing the settler in his possessions at a rate cheap enough to enable bis produce to take even rank in the world’s markets is, we trust, self-evident. If the cheap money scheme gives us that advantage, as it most certainly ought, it will meet with very rapid extension. The reasoning is simply this, that the successful investment of three millions must prove the feasibility of investing thirty millions; fifty; as many millions as may be necessary. It will therefore be wise for all concerned to adapt themselves to the conditions which are coming, and be prepared to deal with money on the lowest terms. The financial institutions may find business less profitable in one way, but as that will be the consequence of very greatly increased profits in other ways, duo to the prosperity which follows in the wake cf light indebtedness, there will be cause not for complaint but rejoicing.

THE DEBENTURES OF THE ASSETS COMPANY.

One of our Southern contemporaries has published a statement, on the authority of its London correspondent, that «£750,000 worth of these debentures have been paid off out of the first of the two millions raised for the Bank of New Zealand under the Guarantee Act of last session. The statement has very much surprised the directors of the Bank of New Zealand, and has caused the President and his officers to feel a thrill of delight. They know of course that no such payment can have been' made out of any of the guaranteed money recently raised. They would like to believe that the diligent correspondent responsible for the news —a very diligent and painstaking man he is, with a talent for invention —has discovered some outside source of supply. But as there are not in the financial world any benevolent fairies who live to pay other people’s debts, they feel, and of course very reluctantly, that the news is altogether too good to be true. Sorrowfully, they feel that they must brand the result of this correspondent's well-meant activity as a canard of the first magnitude.

THE AUSTRALIAN BANKS

Everyone will of course wish well to the project for reducing the too numerous banks in Australia by amalgamation before the opening of the period for the repayment in gold of the deposits. Whether when the period comes the deposits will be repaid, or whether, in case of inability to pay, the depositors will give a fresh lease of life —these are questions independent of amalgamation, which rests on the broad ground of diminished expenses. Amalgamation ought to come as the only means of saving the community from a totally unnecessary tax — the tax of keeping up too many banks. As for the deposits, we think the financial writers and talkers make a great deal too much of them. The embodiment of their fears was seen lately in a letter from the pen of the city editor of a prominent Sydney daily paper, published in London, in which the fifty millions of deposits were passed in rueful review, and the fact deplored that twenty-five of these must be sent out of the country by a spent community. But what reason is there for supposing that these creditors who preferred 3* or 4 per cent, a year for a period, to the certainty of a partial loss, will not prefer to make the same arrangement again in 1907 ? There is, on the contrary, one reason for believing that in the event of any difficulty about payment they will renew. It is that the interest rate is everywhere going down. We should not be surprised if by 1908, the

first of the crucial years, the rate will have fallen so low that the depositors in the Melbourne reconstructed banks will be thankful to be allowed to leave their deposits at less than the rate they now get for them. The outlook certainly is more hopeful for these banks than. it. was. Whether this is so or not, one thing is certain. If the Victorian Government had boldly come to the rescue of the first bank that was tottering in 1893, there would be now no necessity for fending off a new series of panics by hopeful discussion. The , fact that the Government of Mr (now Sir ' James) Patterson had not the prescience and courage displayed at a later date by the Government of New Zealand is responsible for these unsatisfactory things in the Australian financial position, by which it is made so great a contrast to our own.

THE RESIGNATION OF M. CASIMIR PERIER.

Immediately after the resignation of the Ministry, comes the startling news of the ■ resignation of the President of the French Republic. M. Casimir-Perier was elected in June last, within three days of the assassination of his predecessor. The election met with universal satisfaction, principally because it showed the stability of the Republic. Not many weeks before M. Perier had been compelled by an adverse vote to resign the Premiership, but when an unexpected turn of the Wheel of Fortune took him into the Presidential chair, there was only one drawback to the universal acclamation. It was due to the fact that the new President was detested by -the Socialists. The significance of that reservation in the predictions of a successful career is accentuated by his resignation, which is clearly in consequence of the Socialist troubles in Paris. The Times' correspondent only the other day announced the possibility of a Socialist revolution. Immediately afterwards the Government of M. Dupuy was ousted by an adverse vote, ostensibly for failing to protect the State against the action of the railway companies. That vote the President regards as a minor matter in itself. But as he holds it to be the sign of a bad state of things he has promptly sent in his resignation. There is great excitement and consternation in Paris, and many attempts were made to induce the President to alter his decision, but without effect. Whether he intends to seek re-election or not time will tell.

THE FRUIT INDUSTRY,

Pending the revision of the railway tariff rates, the Government, in view of the fact v that the fruit season is well advanced, have decided to encourage the fruit industry by the establishment of a uniform rate of carriage irrespective of distance. They have fixed a rate of 6d for parcels up to 561 b, and of a shilling up to a cwt., for the carriage to the centres of native fruit, with the proviso that empties are to be returned free of charge. The steamers bring over Australian fruit at cheap rates, which arrives in very inferior condition as a rule. The new arrangement will give our people the choice of an article in superior condition, fresh, plentiful and appetising. There is every reason to anticipate for the native industry a considerably advanced position in the local market.

THE PUBLIC ACCOUNTS

The December quarter’s figures being now available, we have compiled the results of the revenue collections for the first three quarters of the year :

Customs Stamps 450,298 Postal and Telegraphic ... ... 33,414 Land and Income Tax 283,590 !X?y S ty ::: ::: ::: ::: f:§ Registration and other fees ... 37,143 Marine oo’^qr Miscellaneous 29,39 b Territorial ... ... ... ••• 191,473 ,£2,995,799