BANK OF NEW ZEALAND.

New Zealand Spectator and Cook's Strait Guardian, Volume XVII, Issue 1724, 8 February 1862, Page 4

BANK OF NEW ZEALAND.

(From the" New Zealand Spectator,” Jan. 15,1802.) The opening of the Branch of the Bank of New Zealand in this town to-day marks another era in our social progress, and is in many respects too important an event to be passed over in silence. Few of the older colonists will need to be reminded that this is not only far from being the first timo that a local bank has been talked about, but that it is also not the first time that some steps have been taken towards the accomplishment of an idea that many have cherished, but few have felt to be practicable, and it may not be uninteresting to trace some of the phases that this subject has assumed.

The history of banking in this colony will supply a rather curious chapter to its future historian. The Union Bank of Australia had the boldness and wisdom (and under such exceptional circumstances those two words are convertible) to accompany the first settlers to Wellington, and we believe to some of the other settlements. They thus obtained n looting which gave them a virtual monopoly of the whole banking business. This business may be supposed to have been but small at first, and if rumour speak truly, the prepation made by the Bank in the shape of imported capital was only calculated for a business of the most limited character. It speedily assumed a more important shape, and was-carried on very quietly, and not without considerable convenience and advantage to the colonists, yet in u manner that we more than suspect must have conferred fully ■equivalent benefits upon the shareholders of the Bank.

The first actual inroad upon its profits was made by the establishment of the Bank of Issue, whose notes entirely superseded the notes of the Union Bank, which were at once withdrawn from circulation.* Without staving hero to discuss the prudence or otherwise, of the establishment of the Bank of Issue' wo only observe that it made no difference in the business of the Union Bank, whether regarded as a Bank of Deposit, Discount, or Exchange. It substituted another paper currency for that which the Union Bank had introduced, and thus put other “ promises to pay into the tills of the Bank’s customers, instead of its own, but as these all represented gold, and were at any time convertible into coin, it may be doubted whether on the whole it did not do the Bank at least as much as good ns harm, and eventually the Bank of Issue was given up.

The virtual monopoly of the Banking busi ness ol the colony that thus reverted to the Union Bank, was made almost an actual one by an Act of the General Assembly, which restricted the issue of notes to that Bank or to Banks incorporated by the Legislature of the colony, or by Royal Charter. To sav that this Act was a blunder is only saying what is true of every attempt on the part of

• We have not forgotten iho Debentures of Cantain Fltz.-oy, but we should no more think of placing those among legitimate Financial or Banking operations thnn the historian of France would the assignats of the Revolution.

governing bodies to interfere with the natural course of events in relation to commercial matters. The request of the merchants of Lyons "Let us alone" was so wise and reasonable, that it quite reconciles us to the failure of attempts that were made, to induce the Legislature to take other and confessedly more judicious steps. We only regret that the well meant efibits of one of the merchants of Wellington—who did succeed in inducing the Chamber of Commerce to act with him—failed to effect the repeal of the whole of the Acts on this subject that now encumber the “ Statutes of New Zealand."

An attempt that had been previously made to form n Bank in Wellington having broken down through the operation of an old Royal Instruction, and the Assembly appearing to be quite unwilling to listen to any application for the incorporation of similar institutions, it appeared for u time as if the Union Bank were placed beyond all competition ; but there was still a loop-hole which enabled the Oriental Bank to enter the field—that Bank having the ndvantage of possessing a Royal charter. It has never very clearly appeared what induced the. Oriental to turn its attention to New Zealand, and still less can it be seen why, after rapidly and successfully establishing itself, it suddenly determined to withdraw. Whatever these reasons were (and we have neither the means nor the wish to inquire into them) the Bank of New South Wales—the most ‘‘rising’’ institution in the colonies—thought the opportunity too good to be lost, and applied to the Assembly for a relaxation of the law in its favor, which was granted without much difficulty, the members probably not being willing to let the colonists be deprived of the benefit of compeiition in banking as well as in all other branches of business. The favorable opening thus presented was immediately taken advantage of by the cohmis-s. The merchants of Auckland determined that New Zealand should have a Bank of its own, and the House could not deny to its own constituents what it had just granted to an institution belonging to a neighbouring colony. An Act was passed, the Bank was organised, Wellington look a larger proportion of shares than its most sanguine friends ventured to hope for, and the result is the event which this day takes place, and which gives Wellington all the advantages of a Bank of its own, while it draws still closer the bonds of amity between it and its sister provinces, especially Auckland.

On another occasion we will endeavor to justify our reasons for believing, that the fears expressed by some for whose opinions we have the greatest deference, will not prove to be well-founded.