BUSINESS AND BOODLE

NZ Truth, Issue 437, 8 November 1913, Page 2

BUSINESS AND BOODLE

BY " CAMBIST.

In this column will be imule an effort to protect the public from rotten finaaclal methods m business, finance or government. Shareholders* m companies are Invited to send the balance-sheets of the companies they are interested " m to "CAMBIST," c/o "N.Z. Truth," (or review. "Cambist." will also be glad to notice In cases where called for the prospectus of any new company which may be sent him.. ■■- ■■_."'•■■■

Quarterly Bank Returns, Credit Very Sensitive.

The banking returns lor September quarter fully bear out m the figures disclosed the rotten ' unsound business conditions of this country. Since we started reviewing "Business and Boodle" matters, we have insisted upon the unsound methods of the banks. We have < drawn .attention to the callous manner ih which- they deprive depositors of *a', legitimate return on the deposits; , that they strangle" enterprise and industry by advancing money tojand speculators' ami . commercial ? thieyes. ...To-day. we find some' of the natural results of such a policy. Deposits -are decreasing rapidly,' for.' people 3 ai;e-inot -allowed to -producewealth. There, can ' be : no fresh deposits unless' corresponding wealth" ' is* produced' m- the . The people' who produce -wealth, .v^iz.; farmers .and manufacturers, . are - denied : advances by the banks. Banks ; cannot lend money to speculators and middlemen, and a± the same time advance Ito1 to who are producing exports -or articles for. domesllcTconsumpti-jn. ■* Bancs'' are loaded up with so many mercantile accounts that, cbejr own safety is m jeopardy. •-- *■ The overdrafts or advances are for all / the banks, - .(. 20,323,372, a decrease of £ 84.2011 corn ikred, with September, 1912. The three old Australian concerns, Union, Wales and •Australasia,' 5 have between them v shortened ad-, vances by,; £402,210 m .twelve .; -'months, which m; itself is a staggering blow to our economic expansion.. On the other hand, we* find that the Bank of New Zealand increased its . overdrafts -by £ 221,729, and* tlicC National . Bank m, the same- period -'. : £-S3,3ol'_'- : The hurigry. "new chum"— -the Commercial Bank of Australia— has managed 'to lend out £12,979 during the* twelve monthS which is' a comic performance m a country offering unlimited j scope -for : sound advance business.' The sooner Dominionites U-ansfer their ! business tojbanksy' A A CONFINING THEMSELVES TO ' . : ISjJSW ZEALAND ' *.'."... ' thof better it will prove for the public at large. y *£lie financia t- pressure m Australia 'is reflected here. . Under ■jtueli. circumstances wo naturally' suf"Ter by dcalingwith Australian banks. Banking is .a 'profitable .business, and

ii .should common.) UsHl to local c-n- --\ rcrpriso. Hut our rotten bnr.khig law.: hamper all efforts m 'the direction ot kouih! bunking. To Scddon and Wi.rd belongs the credit of building up the present bank combine, ;ind of preventing the workers— town und country — from having the samo privileges for tooperative bunking that are enjoyed In Ireland to-day. Mussoy is finding It hard work to excel them. The bilks discounted by the bunks total X 1.873.381, an Increase of _ur_!o.L'Sl compared with September, 19! 2. Here the comparison uctwoen the different banks shows that the banks handling the greater number of merchants' accounts arc responsible for the increases under this heading. The squatters' bank^—thti Union— -shows a decrease of i! 3u.&.7'J. The small man's bank— National— a decrease of £15,C 56. The increased figures are but the result of renewing dishonored paper or extending credit to struggling merchants who arc feeling the pressure of over- import tag and slackness of trade. Such accounts must be bolstered up, otherwise they would collapse and bring to the ' country a period of general bankruptcy. "Cambist" considers that such a lesson, though painful to many, especiajly ibe IwoiLoosiled depositors, is badly needed. The Hank of .New JSealand has £1,813.741 as the avcrajf* .credit bnljnnec standing 'in their books for the Government. Tht.^ is a very large sum for any bank to have on deposit Ironi one depositor. None of the other banks hold any money on Government account. Of the utw of an average two millions of money Is a tro--mendous factor m the hands or THK COMMi^UCIAL HOODLKRS who direct this quasi -State bank, it Is remarkable to n<>tico how llttlo this sum varies spread ow.r a series ot years. *This shows that the Government li nance runs on two well- defined principles. First, tbo pcopje ate always overtaxed; and, secondly,- the Government, whether it bo Ward or Allen, does not expend its revenue as Parliament Instructs it to do. Two millions of money are thus locked up In some unprollWiblo place. "Cambist" asserts that this l« so. and ho will prove tbc assertion before this review clone*. One noticeable fact' intuit not bo overlooked, no matter how tho Government plunges Into debt with, the foreign Insurer. The average public balance m the Bank of New Zealand j remains at a: 2,000,000. Th*. next and most important Item* to notice itrc the totals of free and flx«hl deposits m tbo banks. These are the moneys which the people blindly leavts In th<- «ir«» of New Zetland's I?. ink combine. Thin vast sum of money Is at the |>rt<»rnt moment runaltu, cnormoun rink. considering the bunking methods _.olluWt.d In the Dominion. Practically every penny of moaosc *av*o, by tite worker or the

town and country exploiter, goes into the banks' . coffers. The Post Office \ Savings. Ifcnk and the land shark loan 'and ij»v^s3fai»9D,l, companies .throw their surplus moneys .'into' one. .or .other of the Dahlcs) as' aisb'db the fat insurance companies and other concerns battening oU7 the public. It 'is these facts which lend importance to consideration of the depositors' accounts witu the banks. If the banks were concerned -with the public .. good, ' if they desired the welfare of "the Dominion, they would lend deposit money to those -who could intake >the -most profitable use of .such 'moneys, viz., j. small farmers^ and manufacturers,, as these particular : classes , are the ,» only •- ones ,whp; ; add/ .6; true^wealth. accretions. Such a "-policy would ""quickly into a rapid increase of deposits. We have the contrary* results from banking for the aid of commercial trusts, "monopolies and ; combines. ■■ This m a word expresses New Zealand banking. For this- reason.^ili. the industry and thrift of the nation shows stagnationeven contraction. We Jind the current accounts m 'the banks ?are diminishing and halve faileh , off m; twelve months by .nearly % £2£0,000, while the inter-est-bearing accounts, which the banks are touting -forv'as hard as ever they can, : have only 'increased m the- same period £ 225,274. On. the year, •.'■"the whole deposit -connection of banks has .withered nnder 'the blight of ' *'■'•' ,'.'.: 7BOTTEN 'MANAGEMENT,- " • and the 'country is stigmatised as the most omprogressive, knot m the Britfsh Dominions. Here" is the fairest, richest and most productive -little country f.n earth being par&lyscd oy- Vctt'ei) bank metho-ls bolstered -up by Parlik- : ment; ■ These deposit ,-ngi.ies hold the whole position up to shame and rid.iCMlc. The deposits ' r-houUl be taken from ■ the banks who. do not use them properly. Tliis, of ■■course, rests entirely with . the people -'y'wl-.o own the money, ; and we urge those people to wake Up and consider the position. The; .'depositor.-* , have on ctjrront account, for which not one pennv:6finterest is paid; .4. 13,000,000. Tliey are^chgirsed^Ws ; each per -annum for ;{hC:_privilege .of, this^ barefaced -, robbery. V: Iriie k'mt>iint on fixed deposit, mosl.'bf it only?recetving '3 per -cent, per annum, is £10,549,003; ahd m spite cf touting andeoaxi'Dg this item 1 has only increased i&iO.OOu' Sri '.'-four years! i Whait ;ai. reflection, on. the effects of .a

rotten banking policy. .Tin (inuncial funk of the banks, ami their utter i'ailure on tbe Hnt>.s vif sound banking, linns fiiril*r iliusiimtlon In the note circulation. This'.ltJ another 'jtem of i-rcllt 1 \Vhich proven tho banks are "rj-Skxnfi" It .shows that the people. ellhvr cannot £U a batik note or that the name, people arc declining to accept bank notes. 11 really does not matter which view is taken, the circulation has iallen off by nearly •£50.000 during the year. When wages aro plentiful for the wage-carriera and the other workers, viz., x he small farmer., and manufacturer*,. bahJT notescirculate freely, from thes>c to the traders, but^pe have this testimony which proves the terrible elfeets ot tho vicious forces which at present control the banks. No wonder that the blind factions of capital and labor at present make this lovely little country of ours hideous to live m. The CURSED VKDI3RIIAXD SCHEMES of merchants and sugar trusts are reaching into every section of thu community, and the banks are the pi^vot on which they turn. We see the banks swearing that tlu. nolo circulation is no good to tbeni, while they curse and run down anyone who asks tbe tloverument to institute a State note issue. Why? J>caußo -holding the power of paper mouey m tlujlr plutocratic hands, they 'hay*. the power to rob tho worker Apt n. fa ir wage, and they hold, u^ the same time tho power to fore#,?tho aniall farmer Into tho handti'fof the r&g of meat and butter •buyers." The note circulation io bunking hands ."Wives the dlfttcuU question of A. robbery without being found out to^d nicety. Tho banks, and what the banks are; bolstering up, via,, alt monopolies,;, hold the whip hand over ijihor oa lurid. In factory or wharf, m U» ls nne public franchise— J the note of paper,," tbe circulating "pro- j mine to pay." Scarce meney and artificial scarcity of work Is hero m a nutshell. Our gibbering politicians stand by and ullow this tmaneial wlckednes» to pass as justice. Tho banks which cannot dud raouoy to advance to weslth-produce.es hay.» managed to lock ,up 4928.350 m Govprnmant bonds. This hardly returns a bare 4 per eent_ whlk. solid worthy l>orrowers are willing to pay S per cent, at present: The Bank of New i Zealand*, holds the "lion's sha-re,** vis,, imMST. the '"Wales and Nat tonal' the balance EJUier the Government is at Us wit*' end for money, or the banks involved m these inveittmenu. cannot see their way to do Vetter." llowavet looked ut. the position is ab»urd. The stock of gold m coin and bullion only, amounts u» JC.VWM^i, qjh\. wtuu Is more, the figures prove time the ban*« are lofting coin. Ia spiv. of the continual boasting abou*. our exports, [ the country's finance remains weak. 'owing to the fullnr.. to n*plenli<h the stock ot coiin During the y«ty_ th^j

total has tallen oil by X 112,000. Taking all ihc liabilities payable on tlttmand by the. bunks we get the following, viz.. .Vote?. £1,608.776; drafts, £lQl.b'4l; hank balances, £79,108: free deposits, £13.<WMWI: Uoverument deposits, £1.313,741; making tho stupendous total of £16,693.857 against which only £5,334, 421 :n gold Is available. Tilts is a tremendous straining of credit. The .withdrawal of a million pounds, which could easily happen m these times of panic, wouid shake the. lot of tbem to their foundations. What a game they are having, nearly .£17,000,000 of money free of all cost" No wonder the dividends are heavy, and the profits of our pampered monopolists large. In proportion to its liabilities the liank of New Zealand ls« the weakest, m its gold -reserves. We buve drawn attention to the (Jovernment funds m he keeping, £M 13.741. This money m especially protected m tlu. Stat..'* Interests, it Is a first charge on the assets of the bank should it ever make default, Seeing that the bank has only £2,154.081 with \»hleh to satisfy the Stale's demand, and nil Its other demand creditors, the position is a very weak and serious one for the general public. After deducting what the State baa a preferential right to, thero only remains 370,540 sovereigns to meet £7.219,432 demand liabilities. The position is indeed grave and dangerous. It h. one which shakes confidence m the dual control of the bank!, ; Its directors squabbling amongst themselves: the oflletals treated by the i hybrid Board as a body of ciphers, makes the outlook dark In the ex* tremc. "Cambist" looks on the whole show as a pretty one— a pretty ilnsnclal bubble which he sincerely hopes will never bom, though ho has his doubts at times. We notice the Commercial Bank of Australia appears as a property-owner for tbo first time since it opened here. The amount is only £1*&1, and probably this is only the depoeit ptUd en I their recent purchase. If so. how, like ! the transsiccion Is, tv th<> twjiai Wellington land deal—"«o much down, thy halance at **> much per a-ut. or-r annum/ The figures will be bigger, we expect* m the coming quarter's averages. lOven banks have to creep before they walk. The whole credit position Is full m gloom, teased nil It is on a monopoly which Is killing nnterprls* on cvury band. A f«?w are enriched, the bnlk of tho people arc robbed and tfriren ittly, pOYCI&X*. ...,..,„ 7. .