Banking Matters.

Fair Play, Volume I, Issue 20, 17 March 1894, Page 21

Banking Matters.

We publish the following from a Wanganui coi*respondent:— There was a spirited controversy not long ago between the New Zealand Times and the Evening Post, of Wellington, about “Banking, Banks, and Money,” and the principal question thus debated was “Where is our money gone ?” Millions of deposits and millions of advanced money were put against each other by the New Zealand Times to prove that the Australian banks treated us unfairly; while the Evening Post tried to establish that the banks doing business in New Zealand were in their actions only governed by prudence and wisdom. Yet neither of them can or will answer the question of “ Where our money goes ?” to the plain understanding of our citizens. I will now give a plain statement made by the manager of one of the Australian banks doing business in New Zealand, which was published in the New Zealand Gazette, and signed by tlio same manager, and thereon I shall make some comments. These, I think, everyone will understand. ‘ln April, 1893, appeared the following statement: — Statement of Liabilities and Assets of the Bank, in their Branches of New Zealand. Fully paid-up capital ... £1,500,000 Reserve profits ... ... 1,000,000 Liabilities, including note issue of £lll,OOO, within the Colony of New Zealand 2,851,000 Assets in the Colony of New Zealand ... 2,311,000 Last dividend paid 90,000 I give here roundJnumbers. Everyone can and must understand that when there is in a commercial concern a surplus Jof) liabilities over; assets, that there can be no capital at all; therefore there is no capital of this bank employed within the Colony of New Zealand. Therefore I capital of J8f,600,006 does not exist in New Zealand. The latter, r too, can be said of the reserve profits. Thus the above statement should read for New Zealand—

Fully paid-up capital ... JEO 0 0 Reserve profits 0 0 0 Furthermore, the liabilities exceeding

the assets of £540,000 shows else, that theso £540,000 are employed in some other country or that thoy are lost. Talcing the first, that this sum of money is employed somewhere olso, the question arises, if New Zealand can afford to do without this money ? If not, then certainly does this Bank act unfairly with our colony, and evoryono will sou tins. If the money is lost, the Bank should bo forced to wind up, lilco any other commercial concern, or at least should lose tho confidence of tho public. Now I shall troat that itom of dividend of £90,000. This sum of money is divided botwoon tho shareholders who constitute tho proprietary of this Bank. Of thoso shareholders none, or at least a very small percentage, reside with us. Therefore, tiro bulk of the £90,000 goes out of tho colony. And as wo do not got any value whatovor for this money it moans a simple loss to the colony of New Zealand. The proprietary of tho Bank in question do not invest ono single penny with us, simply handle our capital, leavo us the benefit of our capital or take it away, as they please, and for this thoy tax us to the tune of £90,000 p.a. Will anybody calculate what tho loss is to Now Zealand during a period say of 10 years from this smirch, and then we ask, whoro is tho money gone ? I ask, whore is tho intelligence of our citizens gone to if thoy cannot answer this question. If there was not such an extmordinasy drainage of money out of the colony, surely tho surplus of our exports over our imports should, year by year, bettor our circumstances, and there should be a yearly substantial increase of national wealth. In order to insure this let us stop alt thoso leeks that wo can sec, and let us, for God's sale;', start with this enormous pavment of dividends into tho pockets of the poop.'o that have not a single penny capital \i Now Zoaland. If allowed 1 shall treat National Debt, Gold Basis, dice., at a future time, and am willing to enter into controversy about these questions with anyone. I do not want to take too much liberty with your space, whereforo for tho present I will concludo. I am, Sir, Amicus Boruu.