The Pahiatua Herald. with which is incorporated THE PAHIATUA STAR. Published Mondays, Wednesdays, and Fridays. MONDAY, FEBRUARY 5, 1894.

Pahiatua Herald, Volume II, Issue 107, 5 February 1894, Page 2

The Pahiatua Herald. with which is incorporated THE PAHIATUA STAR. Published Mondays, Wednesdays, and Fridays. MONDAY, FEBRUARY 5, 1894.

Tax bankers of England ara somewhat agitated over the proposal of the people of N.Z., who need the aid of foreign capital, to borrow direct from the lender instead of dealing with the retailer and middleman. This is not surprising. The bankers have had a long, and on the whole, very prosperous reign. Their profits were large ; and their dividends handsome. They have flourished on the fat of the land and the cream of the country. No matter who suffered, in times of scarcity as well as abundance, a good dividend has been proclaimed to the shareholders with the punctuality of clockwork. There have been totalisator odds about the British banks doing business in the colony. During a period of nearly half a century they have been gradually but surely extending. Wise in its day the Bank of New Zealand perceived danger in prolonged expansion, and it tried the effect at a little contraction with what have since proved to be the happiest results. Had some of the Australian Banks taken a similar course they might probably have avoided that aggravated form of bankruptcy called reconstruction. Is the lending of trust money for terms indefinite, on real estate, legitimate bankingbusiness? This is the question which the present banking crisis has raised, and it is as important as serious. Bankers are supposed to be “ brokers” ; in Australia most of them are “ dead brokers" ; but their functions are supposed to relato to exchange. Their assets should invariably be liquid. But do they keep within safe limits ? If their operations were closely investigated what disclosures would be likely to follow ? Would not the details of these operations largely account for the fluctuations of trade and commerce within the colony, and the waves of danger and depression that have passed over the settlers. Considering the steady headway which the colony has been making in population and material wealth do not these fluctuationsrappear unaccountable. In spite of a prodigal expenditure on public works and immigration have we not experienced hard times ? Has not the money market varied more than the seasons 7 That we have received brief periods of abundance is simply undeniable, but have they not been followed by long seasons of scarcity? Have we not seen land and other property inflated to-day to oollapse tomorrow ? To the thoughtful and careful student of finance the causes of these troubles are no mystery. Recent disasters are educating the public mind in reference to the organic diseases of financial institutions. It is becoming well understood that more important than the seasons or the value of our exports is the power unseen that controls the money market. And it is becanse the in-

fluence and effect of this power is becoming understood that the people of New Zealand—especially the settlers who are carrying on the important work of colonisation—are through the agenoy of the State, emancipating themselves from the oppressive surcharges of the speculative middleman and his army of scriveners. If, as the signs of the times indicate, the days of mortgages and liens, expensive deeds, and ruinous rates of interest are drawing to a close, it is oonsoling to think that with the decay of gambling and usury a new era of prosperity is likely to arise.