STATE BANK.

Temuka Leader, Issue 1485, 27 March 1886, Page 2

STATE BANK.

TO THE EDITOR.

Sir,— Will you kindly allow me, as Chairman of tho New Zealand State Bank League, to draw the attention of yourself, and of the. electors of New Zealand to the subject of our foreign debt and interest. Mr G. G, Stead, the Preiident of tho Christchurch Chamber of Commerce, recently made a comparison between the ratio of tho debts and commerce of various countries. For the following reasons these calculations appear to me to be altogether misleading, and only an illustration of the old saying, “ A judicious man looks at statistics, not to get knowledge, but to save himself from having ignorance foisted upon him.” Not only is the public debt of the United Kingdom not owing to people outside of the United Kingdom, as the public debt of New Zealand is owing to people outside of the colony, but, besides our public debt, we have outside private debts which amount to more than our public debt, and the interest of both kinds of debt has to be paid away oni of the colony. Again, what useful deduction can be drawn from tho comparison of the debt and commerce of a country t The foreign trade or commerce of a country simply means tho sum of its exports and imports added together. A tradesman might as well maintain that his debt of, say, £7OOO, was justified because the. produce he had bought, and of the goods he had sold during the past year amounted together to the value of £3,500. (This would be the New Zealand ratio of commerce to debt according to Mr Stead—that is 2to 1). The slat* of the balance of trade, however, a far truer indication of (hs prosperity of a country, or of an individual. But with either a country or an individual, tho greatest of profit balances may he swallowed up by interest, According to Sir Julius Vogel the total public end private debts of New Zealand amount to £53,000,000, but according to the Hon. Mr Holmes, “ It is admitted by Ministers that tho total indebtedness of the colony, private and public, is over £70,000,000, and that we have considerably over £4,000,000 per annum to pay in the shape of interest. We have also to pay, and send out of the colony, the profits of banking; the profile of loan and finance companies, having sixteen and a-half millions of capital; the profits of insurance companies; and the profits of absentee owners. All these come to a very large sum—as nearly as possible five millions a year in one shape or another. Most of it goes to creditors residing out of the colony, and we have the value of our exports, only six millions and three quarters, to pay it.”—Hansard, July 29th, 1885. Or, lei ua say that the value cf our imports exceeds that of our exports, and that besides a heavy balance of trade against us to bo paid for, wo have nearly five millions to pay away for interest. As all the coin in the colony does not amount to two millions, how are we to do this? The answer must be either by mortgaging more land ; or, by altering our present system of finance. Mr Stead is fond of statistics. I am rather surprised that it did not strike him that it would be a most interesting st dement had he made out a balance-sheet ihowing the value of the gold, corn, wool, neat, etc., paid away last year in the shape of tribute to foreign money-lenders, md ee# whether the value of our products izported will pay interest on money bor» owed. Now, would not any scheme that ■vould stop this terrible drain upon our sountry prove beneficial i Then why should we not establish a State Bank of issue, and use such notes to advance noney at a low rate of interest to freemlders on the security of their land. Phe notes would be legal tender, the