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The Pamphlet Collection of Sir Robert Stout: Volume 61



"Impossible," cried Mirabeau, to his secretary, "Never say to me that fool of word." New Zealanders ought to recognize how "impossibilities" become accomplished facts and not to quail before difficulties. Thirty years ago it was supposed to be impossible to get to New Zealand from England in less than about six months. Then it was thought impossible to send wheat to England. As to sending fresh meat, no man was so mad as to suppose it possible. Yet now iron ships race from New Zealand to England in about six weeks, and an English fairful of sheep is carried in one cargo, frozen by means of—heat!

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"And how would you like a National Bank?" said the writer to a Christchurch lawyer. "Not at all," responded he frankly, "and you can't get it. I have lent £10,000 in your district quite lately—you can't get the money." "But," responded the writer, "it isn't money you get, and a National Bank with the same amount of coin as the other banks can hold its own with them." "We know all about that," answered the lawyer, with a smile, "but you can't do it." "We'll see about that," replied the writer, "we will have a National Bank, and we will have the land free from the lawyers."

The fact is, that the money-lenders and lawyers think they have bound the people of New Zealand "soul and body" like the Philistines bound Samson; and, like the Egyptians forced the Israelites to make bricks without straw, so the lawyers and money-lenders would like to make New Zealanders pay extortionate rates of interest out of unremunerative prices. The result of which is, as the Hon. Mr. Bathgate has admirably pointed out in the Legislative Council, in a debate on Advances to Settlers. He said, "In my opinion they (i.e., the settlers) are being slowly ruined at this moment, and some remedy is necessary to meet the case, unless we are to have universal insolvency among that class, and see the land of the country passing into the hands of capitalists, as the Egytian land did into Joseph's hands, to be managed for absentees out of the country."—(Hansard, vol. li., p. 117.) Now, if there is an impossibility, it should be that the people of a free country should allow themselves to lapse into such a state of virtual slavery. Mr. Bathgate also drew attention in the Council (see Hansard, vol. li., p. 313) to the appalling fact that there are in this colony 25,000 settlers who are mortgagers up to the extent of £500. The total mortgages amount to about £30,000,000, and out of this no less than £17,000,000 is held in small mortgages of sums under £2000. Mr. Dargaville says (see Hansard, vol. li., p. 388) that there are no fewer than 32,000 mortgages for sums between £100 and £1000.

Really, however, what is "appalling" about these figures is not the amount of indebtedness, but the ruinous rate of interest and costs of such small loans. Of these Mr. Bathgate, in introducing his bill, "Advances to Settlers," said, "These men cannot raise money at less than from 11 to 13 or 14 per cent. I admit that, in the majority of cases, the rate of interest for such loans is the nominal one of 8 per cent., but to arrive at a correct knowledge of what the smaller settler has to pay you must add his charges. You must add 1 per cent, as procuration fee. These men have not the knowledge or sense to apply to a loan company or private money-lender themselves. They invariably go to an agent, and in addition to the procuration fee to the lender, have to pay his charge. They have to pay their own agent 1 per cent. I have known cases where such agents have exacted 2½ per cent.; but say the rule is 1 per cent. Then there are the law charges, which, of course, press the more heavily the smaller the sum borrowed. If a man borrows £500 he cannot expect that the law costs will be less than £15. The mortgage is usually restricted to three years, and there is not a case in the colony where a mortgage is allowed to remain after the expiry of page 19 that term, however good the security may be. It does not suit the agent of the lender to do so. He wants the money turned over so as to obtain a fresh procuration fee. So, for three years, the borrower of £500 has to pay at the rate of 1 per cent, in law charges, thus bringing up the total to 11 per cent. If the sum is under £500 there are the same charges, and the rate is increased, making it as high as 13 or 14 percent."—(Hansard, vol. li., p. 117. To this testimony I add that of Dr. Newman, who, in a debate on the Mortgage Debentures Bill, in the House of Representatives, said, "The great curse to the small mortgagers has been the excessive amount they have had to pay in the way of legal charges and attendant expenses when they have to raise small sums of money. If they have to borrow a sum like £150, or, £200, or £300, the amount they have to pay in the way of legal and other charges comes to at least 2 per cent, on the loan."—(Hansard, vol. li., p. 389)

"It never troubles the wolf how many the sheep be," but these 32,000 mortgagers are not sheep; they are free and independent electors, who, if they once see that a State Bank can relieve them from taxation—reduce the rates of interest and do away with the law costs on mortgages of land—will demand that their representatives support the establishment of a State Bank, or, at the next election will vote for none but trustworthy State Bank advocates. And the working men of New-Zealand will easily comprehend that if the farmers have less interest to pay upon money, they will have more money to pay in wages. And business men will understand that if farmers and working men are prosperous, trade will soon flourish again. After all a State Bank is not impossible!