THE STATE BANK QUESTION.

New Zealand Times, Volume LIV, Issue 9882, 13 April 1893, Page 3

THE STATE BANK QUESTION.

TO THE EDITOR. pj R J read » pamphlet on * The State Bank Question ’ by Mr J. M. Verrall, an exM.P., and expected to read ,ome good arguments in favour of what would no donbt be a bleating tn this country, a State bank, bat, instead, it happened to contain a mass of very poor arguments not at all dealing with tbe subject, with the exception of ooe statement, that instead of New Zealand banks getting the privilege of Issuing bank note* at a mer-ly nominal charge or tax of 2 per cent imposed by the Government, that privilege should belong to the Government itself. I quite agree with that. It h a pity Mr Teiral) makes a god of Maoleod by quoting him so often, for Mr Maoleod la noted for hie very strange ideas on some points of political economy, although he baa written a moat excellent work, ‘The Tbe .ry of Credit,’a perusal of which would benefit politicians, bankers and merchants. He quotes Maoleod as aayiog * Tho business of banking does not consist in borrowing money from one set of persons and lending it to another set, but in creating and Issniog circulating rights of action.’ I thiuk it Mr V, believes in snob a stitemont the sooner bs goes to one of the South Sea Islands and form* a colony for himself and any follower* of his the better. Mr V. oitss tne success of tho building of St Peter’s Market, Guernsey, as the sort of thing for this country. S» Pstor’a Market was built in tbe following way : -The Governor issued 4900 £1 legal tender notes. The notes were used to pay for the building, and oiroulatad like other bank notes. After the building was finished and rente commenced to come In those rente were used to retire the notes until by the end of 10 years they were all retired. The Belgian Government built their railways on much tbe same plan. Bnt England and Belgium are two wealthy countries able to raise money within themselves. Besides, this eohemo, which Mr Verrall harps on with tho monotony of a day in tho Australian bush alone by oneself, has long been knocked on the head, as the issuing of each rights or notes tends to increase the cost of living) sad If U does so it is evident there

Is borrowin { from ; countries fthe dseb who are employed at workb coasamors au l not producers, A New Zea-, land Stale Bank will soon be an accomplished f:cfc, and when we do have one the naVur?. of Us busiuefs will be fc» bor pow tnToey cheaply io London, <* Cheaply, for there will net crify ■h* tho S - ourifcy of tho gua^.(rtt9 i ', tile lands on which the money will be lent by tho Government, which will bi to farmers at the lowest poa-iole rate of interest. A State bank wall i simply be a land mortgage bank. It would conltol the money market, chespgft tHe rSte ci flod of * n iucalculable Benefit to /firifleM, who would get their mone£ cb iftply dnd for loag terms, not liable to bo called ia at any time £ooh as is the o>B9, when a hank £ets ir.todiff? u-ties. A State ujiik v\t:uld taim tb,a other banks but little, as it would not topobady business but the best of land deourltiei.—l am, &0., John R. Macdinali&.