"HARD TIMES."

Poverty Bay Herald, Volume VI, Issue 662, 28 March 1879, Page 2

"HARD TIMES."

THE ACTION OF THE BANKS. To the Editor of the Evening Herald. Sir, — In your issue of last night, appears a paragraph from the Wellington Chronicle, referring to the pressure of the Ban lr, in the case of Mr. James, manufacturer and importer, of that city. For the last twenty years I have been in New Zealand, and nearly the whole time in commercial pursuits. I have, therefore, had ample opportunities of watching closely the action of the various Colonial Bunks — both during times of adversity and prosperity : — and the conclusion I have come to is, that to the Banks themselves, can be traced, in a great measure, many of the hardships arising from periods of commercial depression, such as we are at present undergoing. In 1865, during a period when large amounts of Imperial money was in circulation, it was a noticeable feature in the management of the Banks, that paper of almost any description was discounted indiscriminately, the result of which waa that many men who had

nothing to lose, were enabled to compete successfully, with persons of considerable standing in commercial circles, who really had something at stake. These men of straw, or, • more properly speaking, paper, were enabled to go to auction, and well knowing they had only to give a bill, buy at prices, which the man who knew be would be expected i to take up his paper when due, could not dream of giving. Those goods were again often sold by these paper men, at prices nltogether ruinous, simply for the sake of getting hold of the cash. In fact, the facilities for getting credit were such that it was simply holding out a premium for dishonest, or, at least, reckless trading ; and when the tide did turn, who were the men who felt the shoe pinch 1 Undoubtedly the men who had something upon which the Banks could pounce, to assist them to reimburse themselves for the losses sustained by the system of indiscriminate credit, and discounting. But, sir, coming to a time quite within the recollection of us all in Gisborne, I allude to the period when money and the credit system was universally prevalent. The time when Patutahi was in the mai'ket. What, sir, was the action of the Banks about that time 1 Were not inducements held out by the Banks, which may have since had good cause to regret ; inducements, indeed, were a mild term — solicitations almost fco invest ; and what is the result ? At the very first approach of anything like a commercial crisis, the Banks are the very first to put on the screw, and in the most peremptory manner possible to these poor deluded victims of mis-placed confidence ; they cannot see their way clear to assist them out of the scrape they helped them into by their own recklessness, and, in addition, depreciating the securities, and value of the whole district. Why this should be the case, is not so plain, for they offer no explanation, and that in the times of prosperity they think it the time to suck the orange, at the expense of those who place some confidence in them ; or, it may be, that they, too, are in mortal dread of the day of reckoning. Whatever the cause, the effect is the same, that is, in many instances, without the slightest notice or warning, the Banks come down on their clients, who have not only to lose their lands, but forfeit the deposits they have already made. It may be said that people should not undertake such things, without the power to carry them through. What I maintain, sir, is that in many instances, if the Banks acted differently in times of prosperity, they would not need to act as they frequently do in times of depression, such as we are all at present feeling. But I fear I am occupying too much of your valuable space, in referring to the. matter ' further.' I am glad to state it is not neoesaary in this case to subscribe myself. Victim.