The Gisborne Standard AND COOK COUNTY GAZETTE. Published Every Tuesday, Thursday, AND Saturday Morning. Tuesday, April 22, 1890. STATE BANKS.

Gisborne Standard and Cook County Gazette, Volume III, Issue 444, 22 April 1890, Page 2

The Gisborne Standard AND COOK COUNTY GAZETTE. Published Every Tuesday, Thursday, AND Saturday Morning.

Tuesday, April 22, 1890. STATE BANKS.

Be just and tear not; Let all the ends thou alm'at at be thy country's, Thy God's, and truth's.

The experience of the Argentine Republic has not been a very happy one in regard to an enforced paper currency. The Buenos Ayres Standard lately contained the following article on the finances of the Republic :—“ The financial clouds banked on the horizon of the country are still gathering fresh gloomy and more threatening proportions. The longdreaded storm was expected to burst at the end of last month, a fitting consummation after a cycle of improvidence and recklessness, but the evil day passed off quietly, the danger still looming over our heads. The New Year dawns in an ominous calm, the short respite before the first blasts of the gale; the situation is as critical and as puzzling as ever, gold remaining firm as a rock above :3a per cent, premium, money quite as scarce as in December, business in imports shrivelled to a shadow of its former buoyant proportions, and the familiar shares and stock, National Cedulas only excepted, sick unto death. The situation is one of doubts and fears, in which all se« the danger ahead) and finder its constant

threat prepare for the worst, while waiting for the electric streak to cleave the sky and herald the bursting of the storm, the violence of which will be proportionate to its lengthy three years’ brewing. The only point at issue is when the storm will burst. Yet, all these financial clouds that are gathering into a storm are merely the result of artificial causes, the removal of which would immediately clear the sky and ward off the dreaded hurricane. If, however, those causes, which one and all spring from State banking in any shape or form, are not removed, we may prepare to see gold rise higher and higher every week, and both the financial and economic situation become daily more critical. The Government must rid the country of the curse of State banking, now afflicting every province in the Republic; and so long as that heroic measure, which must also apply to mortgage State banks, is not resorted to, we must choose to abide by forced currency and all its concomitant ills. Foreign loans will be of no avail, for they will merely patch up a situation and foster speculation which will render the reaction ten times worse. We have lived to see ten million sovereigns come into the country in twelve months, and we have gauged the effects of that influx of specie in a steady rise in the premium from 37 per cent to 40 per cent. The country may repeat the operation, and watch gold rise from 140 per cent to 200 per cent. The patching policy will not save the situation; the market needs radical measures to sweep away the fans et of forced currency, that Grecian gift of State banking now bestowed on the fourteen unfortunate provinces of the Republic. That is the cancer; Dr Pacheco must apply the knife and cut it out by the roots.” The experience of the Argentine Republic may well serve as a lesson to the well-meaning persons in New Zealand who imagine that a State Bank would be a remedy for all our financial ills. Things are far from perfect now, but we are in a financial paradise compared with the Argentine troubles.