PRESS OPINIONS.

Otago Witness, Issue 2106, 5 July 1894, Page 21

PRESS OPINIONS.

(From Our Own Correspondents.)

Wellington, July 1.

The New Zealand. Times thus refers to the situation :—": — " The Bank of New Zealand is an institution in which vast numbers of the population depend for their well-being. A disaster to that institution would mean a disaster to the majority of the population. It is the Government bank, and it has Government moneys on its hands to the amount of over £800,000. That circumstance would not justify State interference for the simple reason that the State | moneys are the first charge on the assets. No tenI derness for the bank would justify interference, but the widespread disaster that must follow the collapse of such an institution is a valid reason for State interference. The safety of the people would be jeopardised, therefore the supreme law over-riding all other laws comes into effect. The position was, by the explanation of the Government, narrowed down to a fine point of two responsibilities. The State had to choose one. Would the State accept the responsibility of a two million guarantee? or should it prefer the responsibility of a terrible disaster, dislocating trade, paralysing commerce, throwing thousands on a cruel world ? Very wisely the Government chose the former, and asked Parliament to support them. Parliament has, after the slightest necessary demur, agreed, and the safety of the people is assured. It is useless at the present stage to criticise or even discuss the details of the measure. The great thing for the public to realise is that the bank has received a substantial guarantee of two millions, an amount fully and absolutely adequate for all purposes. The main result will be the restoration of public confidence. The banking position has been such of late that vast sums of money are lying unproductive and hidden no one kr.ow3 where. These will emerge at once on the rehabilitation of the bank. A circulation of two and a-half millions will encourage at least another million to come to the front." Wellington, July 2. Replying to the Post's demand for an inquiry into the cause of the crisis connected with the Bank of New Zealaud, the New Zealand Times says : — " We find it difficult not to laugh on reading that the Government is in some mysterious way responsible for the events which have led to the necessity for assisting the bank out of trouble The Bank of New Zealand owes its position to itself. There never yet was man or institution who failed without throwing the blame on to somebody else or on to something absurdly irrelevant. That is only human nature. No doubt the pretence that the Government is in some way to blame, though not raised by a friend, will be eagerly seized upon by the shareholder, clients, and friends of the bank. But we do not want the emotions in this matter, we want facts." Auckland, June 30. The Herald, referring to the Bank of New Zealand Bill, says : — " We have no doubt that when all the facts are considered, the conclusion will b? come to that the measure is expedient, and for the benefit of the colony. We peed not Bay that the position oi the tank will

be greatly strengthened by the new arrangement, which will be in effect a guarantee to depositors and customers. A bank which holds the accounts of the Government and of about three-fourths of the people of New Zealand should be in an unassailable position, and ready to render legitimate banking facilities to its customers as well. Then, again, a strong bank with the position of which the Government is cognisant furnishes a channel through which assistance can be rendered to other financial institutions in critical times. It may be confidently expected, also, that this measure will relieve the financial stringency at present felt all over the colony, and give an impetus to all branches of trade and commerce."

The Star thus comments :—" While oar local National Association has been fulminating against Government interference with banking and financial institutions— and even the Liberal Association have thought the prospect of a State bank little beyond the debating society stage — the people of New Zealand awoke this morning to find, if not a State bank in the strictest sense of the term, something very like it, fully established, with splendid buildings, and with "branches and agencies all over the country. Was ever such a financial wonder worked between the setting and rising of the sun ? " The article concludes by saying :—" While we cannot but regret the causes which have rendered such a measure necessary, and while we also regret the removal to Wellington of the headquarters of an institution that was founded here, and has so long been managed from Auckland, we regard the Btep as a very wise one, well conceived, judiciously carried out, and in the best interests of the country."

The Lyttelton Times says :— " There is no doubt that the shadow of the bank's danger has for months past lain over the colony. People have not dared to speak openly, but it has been felt by all well-informed men that the bank's position has been one of embarrassment. We venture to say, however, that few indeed conceived the possibility of the instant ruin threatened last evening. Upon what that rum would have meant to New Zealand we need not enlarge. The ramifications of the bank extend through every section and into every corner. Figures scarcely present the position vividly enough, yet the figures which sum up the bank's interest and position are impressive. Within New Zealand it has 1300 shareholders liable for nearly three-quarters of a million of money ; its 95 branches have at this moment 25,000 current accounts ; it holds the money of 35,000 separate depositors whose deposits amount to not much less than four and a-half millions sterling ; its discount accounts represent traders' acceptances equal to £600,000 ; the overdrafts it has granted number thousands. The Government of New Zealand is its creditor to the extent of £825,000, and this stake would be alone sufficient to justify the taking of bold steps. The Government had to choose between a terrible national responsibility and a frightful'national calamity. It is impossible to doubt that the downfall of the Bank of New Zealand would plunge this colony into an abyss of distress and embarrassment such as it has never experienced. We think the Government chose a course which, though bold, was preferable to a reckless supineness." Press Association— By Telegraph— Copyright. London, July 2. The Financial Times comments on the aotion of the 'New Zealand Government towards the Bank of New Zealand.

July 3. The Times asserts that the Bank of New Zealand arrangements have been pending for the last three months.

The Scotsman asserts that the Scotch deposits have been diminishing for some time, and that the Government guarantee places the bank in a more really solid position than it has been in for years. The Financial Times considers that unless the bank makes default on the new preference sharer no call need be made. Sydney, July 2. The Sydney Morning Herald considers that the Government of New Zealand acted with commendable promptitude in a matter of emergency ; at the same time, the new ace contains some features which will cause it to be regarded as the thin edge of the wedge of a State bank. The working of the bank will now be watched witli interest in the financial, as well as in the political world. The Herald thinks good can be done without committing the colony to a State bank.

The Telegraph believes that the step taken by the Government has averted a crisis, and will accomplish its aim, but for the future the institution will have to ba regarded as a State bank. It would have been wiser at once to have converted the whole of the existing capital into 3 or 3£ per cent, stocks, and to have issued new capital directly, as a State loan in the present state of the colony is not justified. Taking the entire control out of the hands of Iho ordinary shareholders, as it is doing, the situation is wn anomaly. "We shall," continues the Telegraph, "in dus time find the bank only a note-issuing institution in the colony, and. the existing proprietary reduced to a p 3d 1 ion of annuitants. This will ba a far mare workable and more satisfactory basis, whereas in New Zealand there is one overpowpring financial institu ion which is already a Government bank, and that institution is admittedly in difficulties. Warrant is given for State interposition nob to be found in colonies otherwise situated, and, although the New Zealand Government are taking upon themselves duties which will in future harass them at many points, it is right to admit that there is some temporary justification in converting the biggest bank in the colony into a State bank."