Correspondence.

To the Editor of the Stockwhip.

Sir,—Lieutenant Former lias thrown down the gauntlet and challenged Sir Julius Vogel to give a reason why a State Bank should not be established. Sir Julius Vogel appears to be back-ward in accepting the challenge; perhaps he finds it difficult to give a reason. But I think I can find a reason why the Govern-ment do not wish to sec a State Bank established. It is taken from a letter which Sir George Grey some time ago wrote to the chairman of the New Zealand State Bank League. Sir George says:—"The capitalist companies in fact return the majority of the House of Representatives, and the majority of that House appoints the Legislative Council." Now, who are the largest capitalists in the colony? Why, the Banks: and that these Banks are benefitted by the accumulation of the people's money in the hands of the Government (which money would be lodged in the State Bank if it were established) I will now prove. Sir George refers to an act of Major Atkinson's, who, " when he had the power of lending £225,000 belonging to the Government Life Insurance, in place of lending it to 1500 freeholders at a low rate of interest, lent it all to one Bank, on the security of that Bank's receipt. The Banks at an advance lent it to capitalists, and the capitalists at a further advance lent it to the people, who, by rights, should have had it at first hand and at first cost." Now, whose money is it for which the people are made to pay this heavy interest ? I may again quote Sir George Grey, who says:—"It is the peoples own money, collected from the people, and kept for safe keeping in the hands of the Government." Yet the Government, simply on the security of a receipt, place it in the hands of a Bank that may fail. Will the electors of New Zealand allow their own money to be lent to foreign capitalists on no better security than a receipt, that these foreign capitalists may lend it again to the people on good freehold securities, and at a high rate of interest, which interest (less that low rate paid by the Bank to Government) arising on the loan of the people sown money, is being drained out of the country to enrich foreigners (i.e., English bank-shareholders) and to impoverish ourselves.

Then Sir Julius Vogel's answer to Lieutenant farmer's challenge may be given in his own words :—" We must not do any thing which these large companies will consider to he in conflict with their interests; for it is essential to remember that these large companies are very powerful, and that any measure they oppose is not likely to pass."

But will the people of New Zealand endorse this sentiment, and suffer these big companies of foreign money-lenders to grow rich on the manipulation of the people's own money ?