HOW THE BANKS ROB THE PEOPLE

Observer, Volume X, Issue 623, 6 December 1890, Page 4

HOW THE BANKS ROB THE PEOPLE

The financial crisis in England is well fitted to show the necessity for the inauguration of a sound Bystem of State Banking, so as to put an end to the reign of Money, and set Industry free from the grinding and crushing power of borrowed Capital. Nearly all the trade of the world is carried on with borrowed money— in other words, Labour and Commerce pay heavy toll to the Usurer ; there is scarcely suoh a thing as Free Capital employed in any business ; and tho joint wail of workers and employers will never cease until some way is found of paying off the money-lender and dispensing with his services in the future.

In New Zealand every trader and employer knows the process by which the local banks, as agents for the London usurers, collect toll from Labour and Commerce. Overdrafts are pressed upon people for the purpose of extending their business operations, and just hb things are beginning to offer a prospect of reward to the workers and organisers, there comes a sudden demand for re-payment, the business is probably ruined, or it is seized by the Bank and sold at a profit to some person upon wnom they hope to repeat the operation. The same process goes on in London, only it is not so apparent as here. In the financial capital, the "Bank of England works the oracle by virtue of the monopoly conferred upon it by the State, in betrayal of the people's interests. Here is what the London Bullionist has to say about the robbery of the masses by the chartered gang of usurers : ' The real remedy of our commercial troubles is to be found by capital and labour in combined and harmonious action. Their common enemy is the fiscal system which prevails, and which is answerable for the restriction of trade and the curtailment of profits and employment. Our hautefinance sits astride our commercial industry like a heavy mortgage, it hampers and convulses our trade as it suits its own purposes, and the privileges and monopolies of the Bank of England are the pivot on which the whole of our fiscal economy is made to revolve. We have repeatedly pointed out that when the rate of discount is raised, ostensibly to promote the influx of sjold, that end is never attained until the trade of the country has first been paralysed. Then advances are called in, new loans are restricted, orders are withheld, trade flags, employment is curtailed, wages fall, stocks of home-made goods accumulate and prices decline. At this opportunity the foreigners rush in to purchase our goods at prices scarcely admitting of profit ; exports increase, the exchanges are effected and gold flows in under the influence of those exchanges. The j Bank saves itself at the expense of the country's trade, j of the manufacturer's profits, of the laborer's wages. We have watched the operation for many years, and this is always the case. It is against the monopolies of the Bank and the anachronisms of the system which clusters round them that both capital and labor should protest. . . . We must at all events free ourselves from the tyranny of the money-lenders, and all our trade is carried on with borrowed money. Even our bankers, with their top-heavy accumulations of deposits, are traders in debt and borrowing. The system is rotten to the core. The money-lenders are our masterß and they restrict our business operations within the limits that secure their own interests, as they suppose. Were the employment of capital free from the embargoes which this system places upon it, trade would be healthy and active, with fewer seasons of depression, capitalists would have steadier business and larger profits, the cut-throat competition which disgraces our age would cease, ' sweating ' would become a thing of the past, employment would become more extensive and more constant and wages would be higher. The old lady in Threadneedle-Btreet flaunts in our faces the charter of her privileges and stopa the car of progress.'

A State Bank, worked in the interests of the people, would remedy this flagrant abuse, and give the producing and trading community that of which they so urgently stand in need — Free Money. The dozen or so of men who hold the world's coinage, or the right to hold it, maintain their position by virtue of the conditions they

are able to impose upon the banks, and which the banks ia turn impose upon the people. The State Bank of a despotic Government would, as in Russia, be simply another means of taxing the people : but in a democratic country like New Zealand, a State Bank would be the financal salvation of the people, ultimately freeing them from taxation, and industry from the burden of interest. # # #

It is reported that the Bank of England is about to issuf a large number of one pound notes, to relieve the pressure of the existing crisis. Once before in its history this was done by the old lady of Threadneedle-street, with the best results. This is proot positive that a paper issue in New Zealand by the Government would do a great deal to relieve the financial crisis from which the colony has been suffering for years past. The credit of any country, with land and taxpayers for its security, ought to be better than that of any gang of moneyed people, and would be better very soon if we would but make a break away from old traditions which give more power to bits of metal than to men and acres. The commercial men of England are awakening to this fact, and I will not relax my efforts to arouse the people of New Zealand to the importance of this question.