WHAT NEW ZEALAND IS DOING.

Timaru Herald, Volume LIII, Issue 5262, 13 October 1891, Page 4

WHAT NEW ZEALAND IS DOING.

That trade is dull and money scarce, haa, aays tho Mercantile and Bankruptcy Gazette, during the past few years become almost an axiom wi.h New Zoaland tracers. Many causes moy be attributed for thia state of things. Amongst them may bo mentioned the lapeting off, and almost entire cessation of expenditure of borrowed money by the colony. A further cause, undoubtedly, is the inceaaant drain upon the finances of the colony m payiog iniereafc on the publio and private indebtedness ,- whilst tho fact that bo much of the capital we are trading with belongs to foroigo banks and mercantile companies ia a further factor. In addition to the latter cause, may be mentioned the fact that shares m many of tbe large companies owning and working sheep and cattle runa are hold outside of the colony. The first cause mentioned, tha stoppage cf the loan expenditure, may be likened to the decrease of a patient'B diet ; the remaining ones resemble the old-fashioned practice of bloodletting. But, after all, they are to be regarded as somewhat of a normal chaiacter. -Jo young country can go on for over borrowing. However good the security, or promising the work to be constructed, a time when the State will pause m its burrowing muat be anticipated ; while it ia equally certain that capital will flow from older countries to these new ones, attracted by the higher rates of interest offering. It ia muoh to the benefit of undeveloped countries tbat it should bo bo. Many years must elapse before there oan be accrued oopitol belonging to residents. In the meantime, tbs foreign oapital with which we are trading m the colony ia a huge benefit ; and if it means that for a time the profits of working that oapital are remitted from tho colony, New Zealand all the time is benefited by ths employment it giveß, and the revenue received by the railways, Btamp Department, and other branches of tho publio service. There is, however another cause which has powerfully operated during the past few yeara, m causing tho scarcity of money m this colony, and tho consequent dulocsß of trade. Wo refer to the attitude assumed by the banks towards the trading oommuuity. No doubt mercantile matters were m a somo what parlous elate m Kew Zealand a few years ago. Wool was down m price, co was wheat, Ibo frozen meat trade woa m ita infancy, and land had been " boomed " m some porta to a fictitious value. The intention of the banks to call m overdrafts, and restrict advances, was not unnatural. The extent to whioh they carried out thia policy may be judged from a brief analysis of the banking returns for the past, four yeara. The advancee mado by the banks doing buaineas m Australia have increased during the four years ending June 30, 1891, from £109 497,000 to £138 923,000. There has thua been an incrooEe of £29,425, C00, or at the rate of nearly seven and a half millions per year. Of tbia large inoreaie, Victoria has received £15 035,000, Now South Wales £9,817,000, Queensland £5,098,000, Tasmania £1,300,000, ond the other colonies smaller amounts. The only oolony of the Australasian group which has decreased her advances during the four years is New Zeoland, and her advanoes stood at June 30, of this year at £2,118,000 less than at Juno 30, 1887 ; m other words, whilst all the other colonies hove reoeived largo sums from the banks towards carrying on their bueiness, thie colony has steadily paid off ita advances at the rate of about £830,000 por onnum. During tho last year of tho four, alono, the advances of New Zealand decreased by £1,106,000. Side by side with the deoreose of advances, the m crease of deposits has gone on moat satisfactorily m the colony. During tho fou*' years ending Juno 30, the deposits m tho Hanks of New Zsoland increased by £1,855.000. At, that duto £12,892,000 was on dopisit, being about ono-tbird the aums held similarly m the wealthy coloniea of Viotoria and New South Wales, while Now Zealand deposits exceed by threo millions thoae of Queensland, and nro more than South Australia und Tasmania added togothor. If, m concluding our review of the figurio 8. f.ir iii thoy relate to this colony, we endeavour lo ascertain the excets qf advances over deposits (i.c, tho extent to which Lho banks are called upon to assist their clients beyond tho sources furnished by donoeile). tho following rosults appear :— At Juno 30, 1891, there was owing to the banks by Viotoria, £11,736,000 j by New South Wales, £7.500,000; by Queensland, £7,468,000 i and by New Zealand only £536,7151 The figures quoted speak eloquently of the healthy oondition of New Zealand. They chow that this colony hus been able to Btand a tightening of the purso strings wbioh could hardly he applied to any other colony without involving a serious crisis. We aro quite aware that tho rise m wool and wheat, and the development of the frozen meat trade, have enabled those splendid results to be oohioved. Thore must be " real grit " and " sound bottom " m a country whioh is able, m addition to paying its way, to dear off its advances at suoh a rate as we bave been ablo to do. Under theso oireuoistancefl, it is not unroasonoblo for ue, as representing m aomo dogreo tho. merc.irit.il- community of tbiß colony, lo point out tv lho banks that tbo time has oomo when

their restrictive polioy should be abandoned, and when they ahould trent tho industries and trades of thiß oolony -with creator gonerosity that has marked their aotion during the past few years.