, 1893-06-21

AL Az BtCotNftAC5f GA WANT q yCd W1SWo a.
least in hand; and they can get it only from
the banks, which have hitherto been compel
ing for their custom, but now mus; leave them
stranded. 1t is all very we'll to talk of 're-
constructions" but the reconstructed banks
have lost through withdrawals, or have al
ready advanced to customers all their old de-
rosits,or they would not have suspended and
where in the total absence of confidence, is
new money TO come from. 1t will come in the
end, no doubt, for Colonies have great estate
in their unoccupied lands and revive as fast
as Irishmen when knocked down with black
thornS but the question for business. men
is he immediate future. The::few solvent banks
or banks which the colonial Coy ernments pro.
teot. cannot supply everybody at once the
hundreds of branches" will be as poor as
oertificated bankrupt and raising the money
indispensable for wages will be the s.most diff
fcult and costly of operations. The men can
wait for weeks, but they cannot wait for
months and while they are waiting, oil
work is done in The loose. half hearted sort of
way yon see In a concern whose employees
have begun to doubt its solvency. We talk
lightly, as we all did in in 1866, of being
reduced to a state of barter" but none IF us
ever saw that state; and We are apt to forget
that barter payments for wages are possible
only to bakers, that to The wage earntrs
barter means starvation, and hat a starving
people means Il people intent on plumber and
revolution. Each Colony will for months,
perhaps years, be like a waterlogged ship
ahOat, but unable TO advance and in danger
with every squall. 1t is natural. under such,
circumstances, that everybody should think
first of restoring the oil oulation Of Money
that is, renewing the supply of something
that wage ealners will take; and we ale not
surprised, therefore. to see the Colonial Gov
ernmenls trying to create a paper currency.
Every European and American Government
has done that at one time or another, and in
fact, there is nothing else to do; but we can
not admire the special method adopted in
Australia. The natural course would have
been TO issue a moderate amount OF paper
currency guaranteed by the State and receiv-
able in payment of taxes, and then lend TO
the solvent banks the money that they
require. The Government would thus re-
store q circulation of money, and yet would
be master of the currency, which it could at
a convenient time restore to a metallic basis.
Instead of this, the Government of Sydney
has authorised the strongest bank to issue
paper, which shall for six months be legal
tender. but is guaranteed only by the
resources Of the banks themselves. This is
not money at all, its value might Aucluate
from day TO day, and if one of the banks
went wrong, the panic would he worse even
than that cansed by the other. banks failure.
The six months clause, is either a blunder or
an hypocrisy. Are the banks expected too
give gold for all their notes in one day or how
ia q rush to chan . TIE notes to be prevented?
The scheme unites the evils inherent in
what is called "free banking" with the evils
which belong to State paper money, and will
probably be found, noreover,a most inadequate
relief. 1t would be far better, if the State
cannot issue notes of its own, to adopt the
English system, have one bank in each
Colony, guaranteed and partly controlled by
the State, and allow it, and it alone, to issue
paper, which in time of stress could be made
in prrt or altogether ihoonveItible. Our sys'
tenn has it owns defects, but at least it has
this merit that the supply of currency, solid
while the State is solvent, cannot actually
fail. In other words. work can go on, and
that is the first necessity Of civilisation.
Moreover we do not see clearly how the
future is to be provided for. IL the colonies
are to dispense with English capital, their
progress will be wretchedly slow. The con-
ditioh of their advance Is that every body
who establishes a solid concern should be
able to borrow ut moderate rates; and that
means that he should be aUle to borrow in
England, where 1t ere is more money than
people know how to invest. But how is
English money now to be transferred to the