The Government and the Bank.

Star (Christchurch), Issue 5338, 16 August 1895, Page 1

The Government and the Bank.

♦.. ■■ {From the Lyttelton Times.) Thk order of reference which Parliament is making to the Joint Committee of both Houses — the Upper Chamber section of which waß set up yesterday^— is a very, extended one, and the terms of the reference are significant alike for what they disclose, for what they suggest,, and for what they warn the colony to avoid. They cover ithe whole ground traversed by the lobby rumours telegraphed by our special correspondent at Wellington, Which dealt with the affairs of the Bank of New Zealand,; with the Estates Company's assets- and with the contemplated amalgamation of the New Zealand and Gbionial Batiks* The disclosures made inferentially are important. The committee is to be asked to consider how, in the colony's interests, the bank and the Estates Company can best be separated!. This is an admisßion that these two institutions have* their interests blended in a way that . is the reverse of .advantageous to the people of this country in view of the Government guarantee to the bank* An element of hopefulness in the case is to be found in the facts, that the two institutions can be separated, and that the State guarantee of two millions does not commit the- country to any. further obligation. It will be the duty of Parliament in approaching the consideration of this branch of the subject to exercise extreme care lest any action it may take should involve the Government in a large and indefinite liability to- -. wards the Estates Company. The committee is further to inquire into how the stability of the Bank of New Zealand may be insured, its : earning power increased and its usefulness extended. Here the admissions are marked by the utmost candour, and there is no reason, in face of the State guarantee and the power to make bank notes legal tender,. why the situation should not be publicly discussed in an equally candid manner. Fab in a direct way these instructions- to the committee plainly assert that the bank's stability may be improved, and that there is a necessity for increasing its profits,, which might of course be done by absorbing: the business of another institution. The resolution,. in brief,, embodies all the points emphasised by lobby gossip— the ending in some , way of the bank's connection. „ with- . the Estates Company, and the improvement of the bank's* position and. earning power by an amalgamation that would largely increase Its business without material addition to its expenses. In all. this there is no ground for alarm or panic. The. Bank of New Zealand is,, we believe, sounder now than it has been for many, years past. It has a remunerative and growingbusiness, and its customers need be under no apprehension of disaster. But the financial burdens that the bank has to bear are- grievous,, and- it is desirable that they should be lessened.. If we may believalobby murmuring*,, members of the House of fiepresentatives have firmly. determined not to. sanction any enlargement of the colony's guarantee to the bank. The only other way in which they can help that institution to discharge^ its obligations under the State guarantee'is by sanctioning a scheme for. the purchase of some of the Estates Company's assets,.and. that is the very point which we perceive bristles.with: danger to . the country. Whatever is done in this matter must be under . dear definitions and limitations,, and with a' single eye to the interests of the colony. The demand made by certain, members of the Legislative Council fop- more information before Betting- up a committee, yas distinctly premature. To obtain information foe parliament is the business of the committee. Every power and facility will be given that committee to. possess itself of the required information, and the report of such a representative body may be expected to convey Bound suggestion and advice. The financial position being indubitably sound* there is no occasion for urgency in the- legislative or other measures that may be proposed. Parliament can,, and will in due season,, exercise its full right of criticising and amending the proposals of the committee or the Government, and it will accept or reject these measures am it may choose to do in the discharge of its deep responsibility to the people. As it is premature at this stage to demand fall information* it is much more so to dogmatise on the attitude that members should take up. It is as foolish to assert that the bank must be made stable and prosperous at whatever coat as it is to declare that the Government ought to decline all f ur'ther help, and seize the opportunity to establish a State bank. The action of Parliament must be guided by the facts, and these can only be gathered from the committee's report.