'A' STATE BANK.

Gisborne Times, Volume X, Issue 934, 6 July 1903, Page 1

'A' STATE BANK.

A' Radical journal comments as follows on banking matters : Premier Seddon, of M.L., has at last,Apparently, made up his mind as to' what he is going to do in connection with the Bank of N.Z 1 . ; and 'he isn’t going to do the best thing, although he is not going to do the worst. There were three roads to take—to turn the concern into a State Bank, to go into partnership with the Bank, aad to»continue to merely serve as a prop. Seddon decides for the second. The country, he says, isn’t ripe for a State Bank. It is ripe for State life insurance, mutton shops, but it is not ripe for a ideate Bank. Nine years ago, it was ripe enough to take the responsibilities of banking; it put £2,000,000 into the Bank of New Zealand. The next year it took up £500,000 worth of preference shares, and gave a further guarantee. For several years past it also had the greater part of the management of the bank. The only serious difference, in fact, between the Bank of New Zealand and a State Bank has been that the State hasn’t had the profits; and if a country isn’t ripe enough to take the profits after taking the risks and providing most of tho management, it must be a very green country indeed.

The Bank of New Zealand’s position is . something like this : —One morning in ’94 the Government was told that if it didn’t hand over £2,000,000 promptly there would be a mighty smash. It handed over the two millions as meekly as anybody who ever looked down a highwayman’s pistol, and the mighty smash was averted. Yet, so utterly and hopelessly insolvent was the eoncorn, and so successful had the first exhibition been, that noxt . year the Government received another ' visit; this time with a demand for a heavy guarantee and more cash. It was a case of back-up or forfeit, and the State backedup. Using State money, and supported by State guarantees, and with State management, the bank soon began to i make money, and to buy back the preference shares. It has evory yoar increased in prosperity ; yet into such an appalling 1 mess had private enterprise it that after nine years there is still probably nearly £1,000,000 of deficiency to wipe out in the Assets Boalisation department—or there was at the end of the bank’s last year. From being a wild cat bank, which could only have kept going by paying its creditors very little in the £, the State has turned it into a bank which is making a profit of some £200,000 a year, which expects to pay off all its old deficits inside seven years (probably much sooner), andwhich has actually begun to pay dividends to its shareholders —those shareholders who were hopelessly lost ten years ago, and who were saved by the Stato’s benevolence. And the State, whose money and guanantoe did all this, has made nothing out of it all. And still “ the country is not ripe for a State Bank ” 1 It is only ripe enough to prop up private banks and earn dividends f ot mostly absentee private shareholders. ■ < The Goyernment[ is told that it can’t seize the bank by main force and turn it into a State Bank, and that if it wanted to purchase the bank £1,000,000 would be asked for the goodwill. What, however, the shareholders really own is a bank which has still an insolvent Assets Bealisation branch, and which is still dependent on State support. If the State called in 1 its two, millions on March 31 next, and intimated; that thereafter.it would: have nothing to do with the business, and wouldn’t guarantee it in any way, and wouldn’t do any ordinary banking business with it, and if the State handed back to the bank by Act of Parliament its Assets Boalisation concern and the deficit be- . longing thereto, and left the bank on its L own resources—that goodwill would take a lot of discovering.

The Government are being urged to place prison labor at the disposal of the New Plymouth Harbor Board to ■enable that body to carry out the remainder o! the improvements at Taranaki’s principal port, which were recommended many years ago by Sir ■John Coode. The Board have decided to complete the scheme at 1 a cost of £140,000. The breakwater is to be extended several feet, and a powerful dredge is to be obtained to maintain a uniform depth of water. If the Government cannot see their way to allow prisoners to be employed on the work, an endeavor is to be made to get a Bill passed to authorise the raising of £300,000 at four per cent, to pay off the present six per cent, loan of £200,000, and provide funds for the completion of the liarbor scheme,

The New Zealand Times says : ‘Mr ■Seddon has mentioned a Note Issue Bill as among those to be introduced This is believed to be another proposal in the direction o! a Crate Bank, by the Government undertaking the printing of State bank-notes, to be issued to the various banks doing 'business in the colony. This proposaly read in conjunction with a statement that the Government could, in the event of the English, investor “tabooing” our loans, obtain the use of the money held on deposit by the various banks, seems to indicate a daring financial expedient. Sufficient has been disclosed to., warrant the public paying close attrition to banking legislation, and the commercial community in particular should keep a watchful eye on the question, so that they may at .the proper time take such action as the circumstances require.

The last Gazette notifies the appointment of Mr R. N. Jones as President of .the Tai-Rawhiti District Maori Land Council, Judge of the Native Land Coure, and District Land Registrar. Through the Gazette Judge Jones has convened the first sitting of the Council to be held at Gisborne on July 22nd, for the transaction of all sneh business as may be lawfully brought before it.”

'A' young man named Fred Clark, son of Mr C. CiarK, of Devenport, was killed in the Porako bush. Whangarei district, last week. He was cross-cutting, and the limb of a tree struck him on the head. He was rendered unconscious, and died several hours later.

K young man named 'A'. Griddle, a farmer of Kingsland road, Auckland was gored by a boar last week. He keeps a number of pigs and got out of his cart among them, when the boar attacked him, wounding him in the thigh. .The patient is now doing favorably, at the hospital.