THE " LYTTELTON TIMES" AND THE UNION BANK.

Otago Witness, Issue 399, 23 July 1859, Page 6

THE " LYTTELTON TIMES" AND THE UNION BANK.

The paragraph which we quoted on Saturday, from a Wellington Journal, respecting the action of the Bank in this province, was worded perhaps in a spirit of jealousy, but it was founded mainly upon fact. It is true, as has been intimated iv the market reports in our columns from time to time, that the Union Bank has during the last two months greatly restricted its operations in discounting paper. Up to the time when the company's inspector arrived here, the system adopted at both branches of the bank in this province was one of extreme liberality to their customeis, and of laxity in the observance fcf the rules nominally in force. With the encouragement so given a certain amount of illegitimate trading sprang up, chiefly apparent in land and horse transactions. Of the kind of business done, ' horse bills' afford a good example. An importer of horses, which cost him perhaps £27 a head, put these up to auction, and announced his terms of sala as — ' over £f>o an approved bill at three months.'' Horses were in request both for use and for speculation, and the opportunity was a gocd one to buy on credit what was pretty sure to be resold before the bill came to maturity. The horse 3 were knocked down at sixty or seventy pounds each, and promises to pay were obtained, on the strength of which the Bank found all the cash. B. the first purchaser from A, then had a horse to sell, which he offered ' on easy terms,' and found a purchaser in C, who gave B his bill ; and the Bank, after supplying A, again good-naturedly supplied B with cash. Not improbably, before the bill of B came to maturity, there were two others for like amounts in the Bank's coffers, all representing one horse, whose value, if pressed into the market to be sold for cash, might be about £35. Such transactions as this must have occurred over and over again. As to land, the system of " deferred payments,' started by the Provincial Government in selling their town reserves, became extensively adopted. The prices realised must in all cases have been greatly enhanced by the postponement of the day for payment, and in many instances purchases must have been made without any warrant or reason whatever except the chance of re-selling to a profit before the time of the bill's maturity. The readiness of the Bank to give cash in exchange for promises to pay rendered the seller quite ready on his part to gire credit to any one; and unlimited credit was given accordingly. In general business also, from first hand to second hand, from second to third, from third to fourth, and so on, whether goods were purchased for re-sale or for consumption, the buyer was able to get the use of cash for the satisfaction of the seller by appl}ing to the Bank, on three months' credit, and, if he liked, for three months more after that. In fact, the strict rule in discounting was relaxed ; and while the Bank lent its cash so freely at 8 per cent., about half what money cost privately, every one conducted his business towards those whom he bought from and those whom he sold to accordingly.

In putting a stop to this state of things the Bank seeks to remedy its former fault of laxity ; and perhaps there may be a real desire to benefit the community by putting trade upon a more sound foundation. In this view of the case, if any fault can be found with the Bank's conduct, it will be for going about its work in a hasty and inconsiderate way.

v We say — 'perhaps there may be a real desire to benefit the community;' for, though every credit must be given to the colonial managers and directors for feeling a personal interest in the welfare of the place, we know that the present step does not emanate from them. The English directors choose to say that too much of their capital is invested in New Zealand, and orders are given to the branches to restiict their operations. That undue speculation happens to be rife at the moment is a very good excuse, but only an excuse ; for it did not exist among the facts of a year ago, upon which the sentence was pronounced in England. The Bank, as heremanaged, has shown a real desire to benefit the province, in so far ,as it has attacked, in the first place, that spurious clais of business to which we alluded above ; but when the ' screw' is put on by imperative command from without the pressure to be applied docs not rest upon the judgment of those on the spot. First, the illegitimate trader's business is cut off; then the extended business of the small but fair trader, previously encouraged, is pruned away ; and lastly, if this is not enough, the resources of the well-to-do merchants are contracted. If a necessity arose for such a proceeding in England, the operation of retrenchment would be conducted very carefully ; the interests of the customers would form a special subject of consideration, and help would he extended to those in need of it. But the Union Bank of Australia is not one of us ; its interests are different from ours ; and the difficulties of their customers are a matter of little moment to the directors. When it suits them to relax a rule of their own laying down they have both the will and the power to do so ; and when it seems good to them to observe it strictly, there own wishes only are to be consulted. A trader who has sold upon credit because he has been allowed to buy upon credit has reason to be dissatisfied, if all at once his anticipated receipts are, at another person's pleasure, kept from him for tlnee months, during which time he has liabilities of his own to meet. We are sure that no Banking Company acquainted with and interested in the welfaie of the community would transact their business so as to affect their customers in this way. A mercantile firm, who had treated their customers with liberality and who had therefore accumulated a considerable amount of debts on their books, if, wishing to retire from business, they placed their books in a solicitor's hands to get in debts summarily by process of law, would bring upon themselves deserved condemnation. And if the firm in question had a monopoly of the business in the place, their conduct would be the more reprehensible. The Union Bank of Australia is in this position. What they are doing may be within the bounds of law and even right in the long run ; but they are chargeable with unbusinesslike want of consideration for their customers.

We do not believe after all that any great harm is done. The amount of unwholesome trading must have been very Btnall ; and though the few who indulged in it may be severely injured, their loss to the community will not be great. The damage done must be at worst but temporary. A bill of exchange is not made more safe because the Bank discounts it, nor a less valuable security because no cash can be obtained on it, If business could be done largely at three months' credit before, that credit can still be given to any extent the Reller chooses; but instead nfcash down, loss interest, he will have his money at the three months end in full. The Bank will still iind the circulating medium for the transaction of all legitimate business. Of course, if the Union Bnnk declares that it hns not capital to spare even for legitimate accommodation, it will be glad to afford room for the assistance of other Banks. ' What is to be done in the meantime ? We answer as we answered some two years ago. when a similar difficulty arose and the same question was asked. Let every one pay his debts as far as he possibly can. The more he stores up his cash, the more he places power in the hands of the Bonk. The more he avoids his just liabilities when he ha? the power to meet them, the more he contributes to the general depression. One sum of money will pay twenty debts, in circulating from man to man. If the Bank will not circulate money, Jet the public do so to the utmost of thjir aoilitj', and the some end will be gained. And therefor* we say to those who have money — Pay youf debts, and he sure that debts due to you will be paid in your own money. Why

should a rich community be helpless in the hands of a bnnk ?

Further, let the directors in the colony be as considerate as possible, and help the community to tide over the difficulty as far as the discretion left will allow them. In this way the name of the Union Dank will ietain the esteem which, here at least, it has always deserved. — Times, June 29.

Plenty to Eat. — I am worse than Noah's Ark — of course I mean in my capacity for taking in animals. I will suppose that I have reached the allotted term of man's existence — three score and ten — that I have been blessed with a good digestion, and that I have devoured three meals a day. Setting aside the forests of vegetables I have destroyed, the panorama of my animal consumption would take the regular exhibition period of two hours to unroll. There 1 should stand at one end like the ark with open month, while every living creature of the air, the earth, or the sea, would move slowly on in solemn procession, disappearing within my all-devour*ng jaws. The weight of my individual nourishment in tons would be something awful ; its value hi sterling money might reach £10,000 ; and in one-horse wagon loads it would number perhaps from 80 to 100. Not content with the flesh of birds, beasts, fishes, reptiles, and insects, I must seize upon their bones, and feed upon their skins, even after the latter have been converted into articles of clothing. Ivory dust has long been sold as an excellent article for jellies ; and so have bones, hide clippings, and parchment shavings. No wonder Professor Liebig tells me gelatine would not sustain any man a month ; no wonder he tells me the only difference between this deceptive luxury and joiner's glue is its great price ; no wonder we pity the long army of helpless invalids who have been fed with this glassy mockery ; no wonder it trembles when it appears upon a dish, as it thinks what a shameless impostor it is ; for old kid gloves, and older parchment deeds are often the only ingredients of its composition. Glue and scraps of gloves, boiled down with garlic, are eaten by my Spanish neighbours; and my South Sea Island brethren have made a good dinner before now from boiled buckskin breeches stuffed with seaweed. — Dickenss Household Words.

The Messrs. Chambers have announced a new encyclopedia, the first number of which will appear on the Jst of April, at their favourite standard price of 1-Jd. per week. This work has been in careful preparation for several years, and is intended to form a dictionary of universal knowledge for the people, on the basis of the latest edition of the German Con-versations-Lexicon.