The New Zealand Times (PUBLISHED DAILY.) SATURDAY, JANUARY 25, 1879.

New Zealand Times, Volume XXXIV, Issue 5562, 25 January 1879, Page 2

The New Zealand Times (PUBLISHED DAILY.) SATURDAY, JANUARY 25, 1879 .

In a recent number of the “Sydney Mail” the copy of a parliamentary return is published showing the names of the pastoral occupiers of the colony of New South Wales and the acreage of their holdings ; the area of tho land purchased is also given, but is incomplete because the return does not include the-Murrimbidgee district, where large purchases have recently been made. The return in question is full of information of a startling character, and a flood of light is thrown upon the whole state of colonial finance by the particulars set forth. This at once suggests the desirability of a similar return being prepared in New Zealand, A careful consideration of the following facts will probably induce a large section of the public to desire the information as heartily as we do. We gather from the document that a very intimate connection between squatting and banking exists in the sister colony; that the banks are, in point of fact, large runholders as well as banking companies, and that in consequence anything which would seriously damage the prosperity of the squatters would be liable to bear heavily upon the banks. The return shows that, at the date to which it was made up, there were 603 runs, including an area of nearly 19 millions of acres, in the occupation of fifteen banka and financial companies, and that the five Sydney banks alone occupied 411 runs, comprising an area of about 10£ million acres. Taking the total as above stated, it represents about oneseventh of the entire area of Crown land leased in the colony. In other words, the five local Sydney banks hold twice as many runs as the extra-colonial companies, at a total rental nearly twice as large, and their area of leased land is larger by one-fourth and of purchased land nearly six times as large. In some quarters the returns have been declared to be misleading, on the ground that many of the runs held by the banks in their own name are not really in their occupation, but that they have simply made advances on them, that these advances are not not nearly up to the real market value of the properties, and that the ownership is more apparent than real. But to this argument we take exception, because wo believe that although this may be true in a few cases they are far more than counterbalanced by those in which tho banks, though largely interested, do not appear before the public as having any share whatever. The operations in land which have been conducted by most, if not all, of the New Zealand banks are generally believed to be extensive. If the New Zealand banks are interested largely in land, as we have good reason to believe, and are also large wool-growers like the Sydney companies, it follows that a heavy fall in the price of wool, a severe drought, a bad harvest, an epidemic disease among our sheep or other stock, or even a rapid spread of rabbits, would, owing to this identification of interests, at once affect all financial and commercial circles, as well as ths squatters and farmers.

We recently pointed out that the bad

prices realised by wool sent Home under advance, in many cases through the banks, would leave almost all speculators and many clients with a debit balance to make good, and that this sudden call upon the merchants and settlers would no doubt cause some tightness in our local money market. The following figures incline us to believe that the banks would be affected directly as well as indirectly. We have already noted that five Sydney banks hold 10i million acres. They are the Commercial Banking Company, the Bank of New South Wales, Australian Joint-Stock Bank, the City Bank, and the Mercantile Bank. The extra-colonial banking companies hold about 8| million acres ; of these two are New Zealand firms. The New Zealand Loan and Mercantile Agency Company hold on lease 1,150,000 acres, and the New Zealand and Australian Land Company of Glasgow 75,000 acres. Large as these areas are, the annual rent paid to the New South Wales Government is small. Neither is the area of purchased land very extensive, as the latter company holds none, and the New Zealand Loan Agency only 10,300 acres of freehold.

The two largest owners among the extra-colonial companies are the Trust and Loan Agency Company of Australasia, which leases 2,200,000 acres, and owns 54,000 acres of freehold, and the London Chartered Bank which holds close upon 2,000,000 acres, but has no freehold. Altogether the fifteen banking companies named in the return hold under lease 29,500 square miles, at an average rent of 16s. per square mile, and own 077,400 acres of freehold. We agree with our contemporary that the political and financial danger of such an identification is great, and ought to be guarded against. But the competition which was entered into by the banks between the merchants and themselves for the purchase and transmission of wool to England, resulted in a great reduction of rates, to the directadvantage of the producer Farmers generally may be said to be under a debt of gratitude to the banks and companies for their competition, but the result of their action could hardly have been foreseen. The chances are that at the outset the banks never contemplated becoming large wool-growers themselves. Mortgaged properties badly managed would revert to them at during a time of depression. A succession of bad seasons would throw more runs on their hands, on good seasons coming round again before the properties had been put into the market, the returns on the investment which came to hand from their station-managers would show such a handsome profit that there would be every inducement for the shareholders to hold, rather than to part with the property. If the above explanation of the growth of this branch of banking business be approximately correct, it would appear that the banka are to a great extent woolgrowers, if not squatters, by accident rather than by design. The fact that woolgrowing does not properly appertain to banking may, in many cases, have passed unnoticed by the shareholders. The figures we have brought forward apper. lain to New Zealand; but our own statistics are tco incomplete for us to be able to state with any certainty how far our. position is analagous to that of New South Wales. The return we desire, if it were provided, would furnish the knowledge we lack; as more than half the whole income of this colony is derived from wool, the importance of accurate information on the subject under discussion can hardly be overestimated. In New South Wales 10 per cent, of the whole area purchased from the Government belongs to fifteen banks and companies. We should not be surprised if in New Zealand a still greater proportion of the laud in occupation proved to be in the hands of companies or banks, if a similar return were published. In New South Wales it was prepared by order of the Legislative Assembly. In New Zealand we should expect a similar return to be ordered by the Legislative Council. The political danger involved in the above identification of interests is evidently very great, if the banks, which are the monetary agencies of the country, should also become powerful in the State as large land-owners and as tenants of the Crown. In the interests of the whole community the matter deserves that public attention should be directed to it, and that the facts of the case should be enquired into and the result of the inquiry published.