The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1899-05-08
MORE BANKS NEEDED.

4
ness done in these Islands, the bank
| ing capital is totally inadequate &C
| cording TO the American standard.
| There are many small places on the
Mainland whore with a population of
five TO ten thousand there are
| four or more banks with more capital
than our banks have although the total
| business of each town is far less than
| the business done in Hawaii. The to-
| tai number of national banks on the
Mainland in 1897 was 3,64S, with cap
| ital of S644 ,673 1895. To this number
should be added the State and private
| banks, the number Of which with their
capital is not here given. The total
| banking facilities are much greater
therefore in proportion than they are
| in these Islands. 1t is not the number
Of people, but the value Of trade and
commerce that really fixes the amount
of banking capital required. Hereto
fore the agents of the sugar planta-
tons, with several banks have met
the needs of the industries, and have
furnished the capital required for our
trade. Conditions have changed. The
expansion of the sugar industry de-
mands an increased amount of loan
able funds, and the establishment of
more banks will facilitate commerce.
One of the advantages of a National
bank is that it circulates notes, which
al government. While the government
demands from the national bank de-
post of national bonds which secure
| the redemption of the currency issued
by the bank, the income from these
securities as we'll as the interest on
| the currency issued also accrues to
| the assets of the bank.
| More than ALL these national banks
are subject to close inspection by the
government and with few exceptions,
| the inspection is rigid. Inspection is
| whip in the hands of the government
that is held over the bank officials, and
prevents, as a rule, although not al
ways, the wasting of the banks re-
local banks have been singularly free
from dishonest management in the
past, but it is the experience of all COM
mercial communities that the manage
change from time to time and there
can be no perpetual certainty of good
management. The case of the Earrings
illustrates the uncertainty of it, even
in the oldest commercial community
Of modern times There is at present
but one local bank in these Islands
subject to rigid examination. The
other banks are unquestionably man
aged with skill and honesty, but their
safety, so far as depositors are con-
cerned, depends upon the high charac-
ter of the management
As all values here of land and of
merchandising, depend upon the con-
ditions Of the sugar industry, the sue
condition of that industry. That is,
the banks as we'll as individuals have
their eggs in one basket. Diversified
industries would avert this financial
danger. There are none.
1t is generally believed that banks
establish industries. 1t is not their
object to do so. They serve to facili-
tate trade, and encourage manufacture
ing and commerce already established.
Where banks have undertaken to
'build up a place." they have, as a
rule. failed. These Islands furnish eX-
ceptions to the rule. Banks when
wisely conducted are only pawnshOps
on a large scale, mere money lenders
on a large scale and not promoters.
1t is for the facilities they offer in
conducting the business of established
industries that they are of the very
highest value, and therefore a new
bank, conducted by intelligent men, is