PROVINCIAL GOVERNMENT.— BANK INTEREST, EXCHANGE, AND COMMISSION.

Otago Daily Times, Issue 1051, 3 May 1865, Page 5

PROVINCIAL GOVERNMENT.— BANK INTEREST, EXCHANGE, AND COMMISSION.

{To Ihc Editor of the Daily Times.)

Sut—l listened with pleasure to the remarks of Mr Vogel in the Council last evening on the above subject; at same time it pained me exceedingly to see that so few honorable members could, from business knowledge or experience, say one word either for or against the argument of the honorable member for Waikouaiti.

As regards loans and securities, I may be permitted to B.iy that while I was in London our house, which was loaninglargely every day, never, as far as I can remember, received payment of interest at the time the loaua were made, the practice being with short loans of 7 or 14 days to. receive a cheque for principal and interest; together; and if for, say G months, interest at the expiry of 3 to 6 months according to agreement, so that the borrower did not pay interest beforehand, as in the case of a bill discounted; and if the Bank of NewZealand agreed to such terras, it is clear that their London representatives did not know their business. If they were not so imposed upon, then the Bank is dealing unfairly with the Province ; and I am glad to see that at least one honorable member recorded his protest against such conduct. Then, with reference to charging reexchange. I believe the " usages of trade " admit of such a practice; but it is nevertheless a question whether inter-provincial re-exchange can be legally recovered ; at any rate, to my knowledge, the charge is not made by some banks in town, and for the pungent reason that their customers would not submit to it. I am r.ware, however, that re-exchange (20 per cent.) is usually (but not invariably) adhered to in the case of drafts returned from London dishonored, and vice versa, for the- obvious purpose of checking a hollow paper credit, which could otherwise be so profitablycarried on between England and the Colonies ; but this penalty ia distinctly understood when the drafts are negotiated. In conclusion, I am q.uitc at a loss to understand why the Government bankers charge 12 to 13 per cent, for advances, when the agreement expressly stipulates for G per cent, on loans, against debentures and 7 on overdrafts; but perhaps the Treasurer will enlighten the public and. Mr Reynolds on this point, and he will oblige also,

Yours, &c, A Colonist.

Donedin, 2nd May, 1865.