COLONIAL BANKS.

New Zealand Times, Volume XXIX, Issue 4171, 3 August 1874, Page 3

COLONIAL BANKS.

In an article on the institution of the Colonial Bank, the Canterbury Press says : We heartily wish it success. As the Colony progresses, every institution of the t kind, properly managed, will be useful in developing dhe resources of the country, as well as profitable to the shareholders ; and we believe there is room enough for all. We think it, however, a mistake on the part of the promoters of the new bank to hold out such promises of liberal terms and cheap money to all classes as are to be gathered from their prospectus. They will assuredly find that their shareholders, like all other capitalists, will require the best returns obtainable for their money, and that none of them -will prefer patriotism to profit. We think, too, it would have been better had they refrained from attacking the “three Banks from Australia” by the implication contained in their prospectus that the latter are merely making New Zealand subservient to their business elsewhere. This, statement is not borne out by the facts. We find by the sworn returns for the quarter ending March 31st, 1871, that the amount of their own capital employed by those banks in New Zealand, in addition to all the deposits obtained in the Colony, exceeded ,£1,600,000. The total amount of deposits, circulation, and all other funds derivable from the Colony, held by the banks referred to, according to their sworn returns to the 31st March, 1871, was (omitting shillings and pence) £2,025,910. At the same date, according to the same returns, the total amount employed by the three banks within the Colony was £8,693,839. So that the total amount these banks employed within the Colony exceeded the funds they, derived from the Colony by no less a sum than £1,667,899, or upwards of half a million more than the united paid-up capital and reserves of the other banks trading in New Zealand, which by these returns appears to be only £1,123,327. Such being the case, it was scarcely fair to those institutions to refrain from putting it forward. In the prospectus before us the colonists are invited to keep “ within their own domain the absolute control of their own money.” This simply means that they ought to withdraw their deposits from the three banks alluded to; a proceeding which would inevitably result in the withdrawal also of the large sum with which these banks are now content to supplement the deposits derived on the spot. It cannot be supposed that under such a condition they would continue operations here, as mere investors of capital for which they can find profitable employment elsewhere. And we fail to see any advantage in transferring the duty of employing the deposits they now hold and employ to any other institution whatever, when the transfer must evidently involve the loss to this Colony of the large amount of foreign capital which the above returns prove the banks in question to be the means of introducing. We believe, as we have already said, that there is room enough for all. And we deprecate any measure .tending to force capital out of the Colony, ho matter whence it is derived.