STATE BANK NOTES.

Otago Daily Times, Issue 10596, 14 September 1896, Page 4

STATE BANK NOTES.

Discussing the question of a paper currency fclic Christehureh Press says :—"What would a New Zealand trader do if he were compelled to take inconvertible State Bank notes foe his. goods when he required the proceeds of his sales to pay in England for other goods to renew his stack, which "goods could only be paid for in gold ? Til-: exports of New Zealand amount to, say, £8,000,000. The banks advance the money here upon proof thufc the produce has been shipped, and they send bills of exchange for £8,000,000 to Kngland. But bow can the banks advance this vr.st sum ? In this way : New Zealand merchants are buying, s»y, £6,000,000 worth of goods in Europe, and they pay £6,000,000 to the colonial banks. The other £2,000,000, in round numbers, are furnished by the Government, which has to provide £2,000,000 in London for interest on loans, aud pays it here instead, leaving the banks lo arrange exchange. Tans, broadly put, the total exports must cover the coat of our imports, plus tha interest on our borrowed money, or the colony must sink st-.adily into debt by borrowing to make up deficiencies in Dr de Jokoh's Light-Brown Cod LivebOil.— In tiik Wasting Diseases ok Children its Efficacy is UNKQiur.LED.--pr It. C. Croft, author of " Handbook for the Nursery' writes :— "I have tried Dr He .Tough's Light-Brown Cod Liver Oil. and find' that it contains all the properties which render the Oil so efficacious. Dr de Jongh1) Oil is almost a specific, in many of the Disfases peculiar to Infancy and Childhood, and I have seen market! benefit produced by its use. I'atient« prefer it to the pale Oils, and are able to retain it more comfortably/1. Sold only in capsuled Imperial Half-pints, Pints, and Quarts, by all chemists. Sole Consignees, Ansar, Harford, «ud Co. (Limited). 210 High Holborn, Loudo».tia. •

exports.- Readers of the Bank inquiry will have : a noted that the Bank ot New.Zealand deemed t it prudent to maintain large c»ph reserves in f Australia so as to.be able .^o purchase bills of £ i exchange there when the market was favour-;, I able for the large remittances of the Government to London. That is, if tha Govern- c meat wished to remit to Lbndon half a 3 million, *t a time when the Bank of New Zea- 5 land was "without an equivalent of com- ' raercial draft) as a set-off, the bank would j buy bills of exchange in Australia, oc i from some of the other banks, for the amount j required, but such drafts would have to be paid s for in gold ; State bank notes would be abso- f lutely useless. Thus there must be cash at s both ends. We do not say that the banks do i not make a profit on this business, or that a c State bank could not do the work and secure i the profit if it held sufficient gold, as the exist- i ing banks do. After the experience of the last 1 two or three years in Australia and New Zea- i land most people will agree that there is a : strong probability of the profits so made being f more than swallowed up by the losse3 in trade, t To suppose, however, that there ia some magic c about a State bank which enables it to do with- 3 out gold is as absurd as to fancy that a State locomotive can be run without fuel." r