The Sun.
London, England, 1867-02-22 00:00:00

New Zealand Investments.

Investments in our youngest and most distant
colony have stood the test of the panic better than
those of any other land. The fact is strange, but
the reason is simple : New Zealand is the soundest
and most prosperous of our colonies. It is not suffi-
cient that an undertaking should be based on correct
principles, and honestly managed to insure success.
The first step an investor should take in laying out
his money in a distant dependency is to see that the
country has a bright and hopeful future. The
best-laid schemes are blighted and withered if there
be no progress in the land, no energy, no enter-
prise in the people. New Zealand has passed its
infancy of weakness and danger. For a quarter of
a century the changing pictures of its historical
panorama have quickly followed from cannibal
feasts, whalers' outrages, Maori contests—to colonis-
ing theories, military mismanagement, extensive
sheep-walks, and busy goldfields, ever moving
towards the point whence it was to start fairly in
the race of prosperity, a sound and settled colony.
The first great industrial institution, founded in the
colony by the colonists, was the Bank of New Zealand
in 1861. The career of the young financial giant
has been a singular instance of extraordinary pros-
perity, unchecked by reverse. From the first it
secured the unbounded confidence of the entire
people, where men are most timid and cautious.
It was enabled to grasp at once the whole country,
and root itself in ramifications over the land. It
sprang into existence as the colony emerged
from its babyhood, and established itself in the
pride of the colonists as the great national bank of
their country, henceforth to be associated with New
Zealand finance.

The following table is worthy of an insertion, the
notes of the bank in the hands of the public and the
sums held on deposit giving an idea o:

dence of the colonists in the insti

TABLE SHOWING THE CAPITAL, LIABIL.
EXTRACTED FROM THE BALAN

tution
.ITIES, I

CB SHEI

the confi-

LOFITS, ETC.,

Capital Circula- Deposits, Rate
paid. Lion. Bills, &c. Profits. Reserve. Div. p.c.
P.a.
1862 £
Mar. 108,785 62,914 378,183 6,097 3,000 2.370 6
Sep. 179,468 138,453 668,073 13,971 6,000 7,803 10
1863
Mar. 239,592 227,779 779,021 35,910 24,000 11,136 10
Sep. 249,373 303,266 1,327,513 39,524 27,000 12,468 10
Mar. 113,842 321,444 1,413,215 49,590 35,000 14,054 10
Sep. 392,614 333,467 1,663,347 32,296 5,000 '27,348 15
1865
Mar. 485,094 297,969 1,630.174 50,669 15,000 33,685 15
Sep. 408,899 286,392 1,718,227 60,838 18,000 42,500 17
1866
Mar. 199,983 350,967 2,150,715 53,229 10,000 42,500 17
Sep. 500,000 311,471 2,435,997 53,307 7,000 42,500 17

£395,431 £140,000 £236,364

150,000
Provident Fund £3,000. Balance undivided £6,067 9,067

£395,431

A success so astonishing led to imitations, and
two banks were promoted in London for business
in New Zealand, quoting this instance, for the en-
couragement of investors, though without one
point in common, save the common field of enter-
prise. One failed disastrously, and the other at the
expense of some bitter experience is becoming a use-
ful and paying concern. Though difficult in Eng-
land it is even more difficult in a young and
vigorous colony to mark the precise spot where legiti-
mate banking ends, and what is now termed "financ-
ing" begins. Applications from the best
Customers are numerous for aid to carry to a success
legitimate and profitable undertakings. The bank
is 'compelled to refuse business of a most lucrative
character, because that business is inconsistent with
the true principles of banking. hence the necessity
for such an institution as " The Loan and Mer-
cantile Agency." The experience of the managers
of the Bank of New Zealand proved that such a
company was required in the colony, to take up
offers of a most paying nature which could not be
entertained by them. This company was founded
simultaneously in London and in the colony, in 1865.
The principle on which it works is simple
and profitable in the highest degree. It professes
to obtain money in the cheap and over-stocked
markets of England, and to employ that money in
the vigorous and rising colony, where the demand is
large and the rates high. It proposes to act as an
agent for the benefit of both classes of its con-
stituents. In the first place, it accepts on deben •
ture the money, difficult with safety to employ at
such high rates here, and thus benefits the home
capitalist ; and, in the second place, it transfers
that money to New Zealand to aid enterprising
colonists to develope the vast resources of the
country, in which virgin field an interest can
with security be obtained that yields a handsome
profit over the cost of borrowing, remunerating
alike the lender in England, the company as agent,
and the colonial borrower. It is difficult to con-
ceive a more legitimate medium of investment, and
one more calculated to confer great and lasting
good. The New Zealand Trust and Loan Com-
pany is an undertaking of a somewhat similar
character, and was founded earlier, under the
auspices of the Union Bank of Australia. It is not,
however, so broad in its basis, or so comprehensive

in its object as the Loan and Mercantile Agency,
nor has it the advantage of being associated with
the great National Bank of the country. The cha-
racter of these loan institutions is not yet fully
understood by the British public. They propose
to do securely and effectively what people often
attempt, blunderinglyand through dishonest agents,
to do for themselves. Few who have any corre-
spondents in New Zealand are ignorant of the fact
that tempting rates are there offered for money
on undeniable security. The difficulty is how
to remit the sum, to investigate the security, and
to insure the due transfer back of the interest. This
is exactly what the organised agency does ; giving
the investor a double or a triple security, in con-
sideration of his foregoing a portion of the profits.
Capital is accu mulati ng in London, and the public are
at their wits' end to know how to invest their money
with security. At the same moment the most lucra-
tive undertakings are starved for want of means of
development in our most rising and prosperous
colony. While this extraordinary state of affairs is
in operation here, and at the Antipodes, the ma-
chinery is perfect for receiving in London, and
placing out in New Zealand, a portion of the capi-
tal lying idle. Such facts do not speak well for the
commercial intelligence and sound knowledge of
home investors. It is true that the public have
cause for alarm, if they mix up in confusion
the futile efforts of financial institutions to extract
enormous gains from undertakings in an old and
fully developed land like England, with the
legitimate and largely productive enterprises, of
a young and undeveloped country. The financial
undertakings failed to perform what was in truth
an impossibility, but the slightest exercise of reason
will show that what could not be done in England
is easy of accomplishment in New Zealand. The
great necessity is to understand the nature of the
operations, the field, and practicability of the work.
The knowledge of New Zealand as a field for M-
I vestors will not long be confined to a few. The ex-
traordinary rapidity of its progress, in common with
those of the great mining States of the Pacific side
of the Union, will shortly be better known and
generally appreciated. The success of the Panama
line, the marvellous yield of the gold-fields, the
more frequent communication, together with the
necessity of seeking safe outlets for capital, all tend
towards a more intimate acquaintance with the in-
dustrial and commercial capabilities of these new
countries.—Anglo-American Times.