The Wairarapa Daily. FRIDAY, APRIL 11, 1879.

Wairarapa Daily Times, Volume 2, Issue 132, 11 April 1879, Page 2

The Wairarapa Daily. FRIDAY, APRIL 11, 1879.

Ahe the overdrafts which lmve been recently called in by the Bank of New Zealand to be regarded as a temporary expedient on the part of that institution to raise money, or is the withdrawal of accommodation to be of a permanent character ? We refer espepecially to the Bank of New Zealand because it has the bulk of the Wairarapa accounts, and the settlers of this district are more or less dependent on it, As far as we can ascertain the affliction under which we are supposed to be now suffering must be regarded rather as chronic than as acute, In other words there has been on the part'of the Bank ' a change of front.' a new 'departure has been made, A fresh system is being inaugurated, and the sooner the public understand it and conform to it the better it will he for everybody. It is not at all we believe the intention of the Bank to discontinue making reasonable advances to its customers, but the method in which they are now and will for the future be given, is a new; one,

The system of 'giving overdrafts to somewhat, indefinite amounts and for* somewhat indefinite periods is altogether abandoned. When accommodation is granted it will be for fixed periods, at the expiration of which repayments will be looked for as a matter of course. The practice . 'hitherto preof discounting accommodation bills to a large extent is one that will' -also be., dopined.' The object;-as we understand it, of the new system mil be to Slowly lint surely limit the re-

dundant credit which has characterised the trade of the Colony during the past few years—to reduce the mass of paper ever floated all over the Colony to dimensions proportionate to the cash

reserves of tho Bank—to make a pvomissoiy note a thing rather to be met

than to be renewed,' The effect of all this will be to decrease trade, but to make it more healthy. There will be a period of more or less suffering, but that will be followed by a prosperity founded'on a sure and permanent basis. Of course the Bank of New Zealand, powerful though it be, cannot carry out its present financial reforms without the co-operation of the other banking institutions of the Colony. Hitherto the other banks Banks have been, as a rule, less liberal in their advances than

the Bank of New Zealand. Perhaps just at the present juncture, the latter Bank is more chary of advances than any other; but in the long run all the Banks will be pretty well on a par as to the extent as to which accommoda-

tion will be afforded, and the new system'of the Bank of New Zealand will probably be more or less the rule of all of them.. Tradesmen and the general public therefore will know what they have to expect for the future,

While oil the one hand no sudden

withdrawal of accommodation is to be apprehended, a gradual but systematic restriction of it must be prepared for on the other, A tidal wave of commercial distress has recently played havoc through the length and breadth of Great Britain, taking the work out of the hand of the industrious man, and the bread from his children's lips, The same wave may yet reach our shores, and if the action of the Banks force upon us retrenchment, moderation, and economy, we may be unscathed when it lias passed over us. If, on the other hand, a sharp and sudden reverse finds us unprepared, the misery and misfortune then will be far graver than that which now more or less prevails.