The Opunake Times TUESDAY, SEPTEMBER 3, 1895. BANK OF NEW ZEALAND.

Opunake Times, Volume III, Issue 122, 3 September 1895, Page 2

The Opunake Times TUESDAY, SEPTEMBER 3, 1895. BANK OF NEW ZEALAND.

The past week has been an eventful one, owing to the threatened crisis in financial circles and the legislation initiated on behalf of the Bank of New Zealand. A year ago a financial crisis was threatened by the imminent suspension of the Bank, and the Government, fearing the consequences and the certain disaster to every branch of industry throughout the colony, stepped into the breach and averted it by guaranteeing two millions for the Bank. In the excitement of the time this course of action was universally applauded throughout the colony. The Government led the House and the country to believe, when they asked that liability to be assumed, that they were conversant with the affairs of the Bank, and that the assistance rendered would be ample to place it on a thoroughly sound footing. Subsequent events have proved that the Government were thoroughly ignorant of the Bank’s position at that time, and their action must cause the electors to consider whether they are fit to be entrusted any longer with the absolute power they have wielded during the past four years.

It w 7 ould appear from the enquiry held by the Joint Committee of both Houses into the affairs of the Bank, that as a trading institution it is in a first-class position ; but the mill-stone, in the shape of the Estates Company, which it has had fastened to its neck, has been gradually drowning it, and the present intervention is to rid it to a certain extent of this incubus. An Estates Realisation Board is to be appointed, and all the properties, &c., belonging to the Estates Company, are to be handed over to it for realisation. This Realisation Board is to hand over its bonds for £2,784,000, bearing 3£ per cent interest and guaranteed by Government, to the Bank in return for the properties, which are valued at £1,879,000. Supposing that the Estates Company should not realise more than this amount, then there would be a deficiency of £855,000 for which the colony would be responsible, but it would hold security over the uncalled capital of the Bank for the amount. Under the Bill, which passed its second reading on Friday morning, the position of depositors is made secure beyond doubt, as the Government have allowed the million, which was to be held outside the Bank, out of the two millions guaranteed last year, to be taken into the Bank’s general account. The Government also take up £500,000 worth of preference shares which are to bear 34 per cent interest, which will place that amount at the disposal of the Bank. It is admitted by Sir Robert Stout and Captain Russell that there was no other course open to the Government in the present instance than to come to the assistance of the Bank, and the present action of the Government will make it the strongest and most secure banking establishment in the colonies, so that any fears depositors may have had can now be allayed, as their deposits are just as secure as if they were in the Government safe. * h' The case of shareholders, however, is far from enviable. The whole of the paid-up capital, amounting to £900,000, as well as the proceeds of a half million call, payable in November next, are to be written off, so as to liquidate ascertained losses, and in addition to this another half million is to be called up during 1896-97. The Government, whilst undertaking heavy responsibilities, have only done so to protect their own two millions which were guaranteed last year, as •well as nearly a million and a half of Government deposits which the Bank holds at present belonging to the colony, and also other depositors with the Bank. It is the very irony of fate that a Government, which obtained its lease of power on the faraoi s “ charges against the Government,” formulated by Mr G. Hutchison, M.H.R., the main offence in which consisted in allowing a few hundred thousand pounds in excess of current deposits to lie in the Bank’s hands, should now find itself forced to guarantee over five millions for the same purpose. It will be bard to make the electors believe at the next general election that actions which, when done by a Tory Government, were proclaimed by the Liberals to be so highly criminal, are now the essence of virtue when done by themselves.

The weak spot in all reformers is generally want of constructive capacity. It is little or no trouble to criticise other people’s work and show the weak spots iu it, but the difficulty is to construct a policy for improving the State which will, in its turn, stand the fiery ordeal of criticism. Whilst having unbounded confidence in the resources and latent wealth of New Zealand, we are satisfied that there is a limit to its pledgability as an article to be placed in pawn with the moneylenders, and we are'under the Impression that in this respect the

present Government have in or about reached such limit. Mr Ward came back with a great flourish of trumpets over his success whilst at Home, and he indignantly denied the charges of misrepresentation which were levelled at him for his utterances whilst there. The cable, however, informs us that he assured the London shareholders of the Bank that there was a very small probability of any further calls being made, so that we can well understand their consternation when particulars of the events of the last week reached them.

Whilst with the one hand they are pledging the credit of the colony to secure those who have deposits with the Bank, with the other hand they are doing their utmost to cut the throat of that institution by means of recent legislation. They are raising money to lend to farmers at 5 per cent, so as to cut down the rate of interest charged by the various lending bodies in the colony, which must re-act on all the banks and money-lending institutions doing business here. If they had only a rudimentary knowledge of finance they should have foreseen that their policy, so boastfully put forward, would have had the effect which has been produced. The effect of cheap money must mean the depression of money-lending institutions, especially when they use the colony’s credit to give effect to it, and whether that is desirable or not, at the price, will be a question for the taxpayers to seriously consider when the time comes round for them to exercise their votes.

In times gone past the watchward word was “ Measures, not men,” but that is now completely reversed, snd no matter what the measures introduced may be, or how averse the Government supporters may be to them, they have only to sound the clarion and blow the note “ No confidence,” when measures and principles are cast to the winds, and a solid vote is given for the “ men ” to keep them in pow'er. Nominally, the great strength of the Government Party lies in numbers, and the Opposition Party is correspondingly weak, because numerically small; but the actual strength of the Government lies in the fact that there is not, outside the Cabinet, a sufficient number possessed of any backbone in the party. They are nonentities, except when registering their votes in a division, and the taxpayers who will have to pay for it have only to blame themselves for returning such representatives. Whilst Party Government exists there should be strict loyalty, but that only applies when the policy put forward is a reflex of the opinions of the individual members forming such party, not when against their will and convictions they are forced to swallow every draught, however nauseous, which may be prepared by the Ministers for the time being in power.