On this page
- Departments (1)
-
Text (5)
-
¦ jTo. 439, August 21, 1858.] THE LEADER...
-
that the Cape colony is one of the very ...
-
• Railway Enterprisb at the Cape.—The co...
- Untitled
-
-jVC ^V it n+tl* _\ ^m ^,^,; >l ^tlmUttlm HUB (lUUIttl tHllll* ¦ «?
Note: This text has been automatically extracted via Optical Character Recognition (OCR) software. The text has not been manually corrected and should not be relied on to be an accurate representation of the item.
-
-
Transcript
-
Note: This text has been automatically extracted via Optical Character Recognition (OCR) software. The text has not been manually corrected and should not be relied on to be an accurate representation of the item.
Additionally, when viewing full transcripts, extracted text may not be in the same order as the original document.
¦ Jto. 439, August 21, 1858.] The Leader...
¦ jTo . 439 , August 21 , 1858 . ] THE LEADER . 849
That The Cape Colony Is One Of The Very ...
that the Cape colony is one of the very few colonies that can show an increasing revenue , and , what is still better , a large surplus , amounting in the last financial year to upwards of 40 , 000 £ But from careful estimates and Government returns of the probable traffic to the railwav , it appears very doubtful indeed whether the local Government will ever be called upon to furnish one sixpence towards the guarantee . The calculations made by the authorities in 1857 , showed that 70 , 000 / . yearly might be expected to accrue to the railway , but since that period considerable increase in all branches of goods and passenger traffic has occurred . From
the last official returns it appears that in the thirty working days , exclusive of Sundays , from the 4 th of March to the 8 th of April last year , the traffic on the upper and lower roads into Cape Town included more than 50 , 000 passengers in vehicles , besides nearly 10 , 000 on foot ; 10 , 000 waggons and carts , carrying above 11 , 000 tons of goods ; 3800 omnibuses and carriages ; and at least 10 , 000 sheep and cattle . In wine and brandy alone the districts through which the line runs produce 31 , 000 pipes and 873 , 000 bushels of grain . The export of wool from the Cape has risen from 7 , 864 , 000 in 1853 to 14 , 921 , 000 in 1856 ; and that of wine in the same period from 271 , 767 gallons to 923 , 066 gallons . -The revenue of the colony appears to have nearly doubled itself in tlie last ten years , and now exceeds
400 , 000 / . But the advantages secured to the railway proprietors do not end here .. In order to place the payment of the 6 per cent , guarautee to the proprietors beyond contingencies , the act of the colonial legislature by which the 6 per cent , interest is granted , adds a further security to the guarantee "by a rate in aid , to the extent of 3 per cent ., from the districts through ivhicli the railroad passes . ¥ e think we have shown enough to prove the soundness of this undertaking , and the prudent foresight which has regulated every step taken by those who will have the honour of inaugurating a system of railways for the Cape , which will yield a good return for outlay , and , what is better , will be of incalculable service in developing the large latent resources of this most important British dependency .
• Railway Enterprisb At The Cape.—The Co...
• Railway Enterprisb at the Cape . —The concession for a railway at the Cape of Good Hope has necessarily directed attention to the position of that colony . As far back as . 1847 a project for the construction of the present proposed line was started , and the contract for its construction tendered for by Fox and Henderson . Of this proposal . nothing enme , the colonists being content to try what new roads would do before they took to the rail . However , in 1852 , the idea was revived in another form , to make a large inlet called Saiidanha Harbour , tlie port of Cape Town , and to connect it with the capital by a coast rail of some fifty or sixty miles . Sir John Pakington , then colonial minister , referred the
project t » the local authorise ? , who , condemning it , suggested the old line from Cape Town to "Wellington . This suggestion was at once adopted by the " Cape Town Railway and Dock Company , " at the end of 1853 , with the project of adding docks in Table Bay to the railroad . As tlie local government lisve now taken the execution of the breakwater in Table Bay into their own hands , the company hare abandoned the dock portion of the scheme . In 1853 the company in England pjot an act of incorporation . Various delays occurred in consequence of the change in the form of tho coloninl government , the Russian war , & c . ; but in . 1857 the legislature passed an fact giving a
colonial guarantee of a minimum interest of 6 / . per cent , on a sum not exceeding 500 , 0007 . for constructing a railway from Cape Town to Wellington ; threw tho -whole matter open to competition , and issued as a guido to competitors a report of its civil engineer , which , however , was not of a character t « enable parties to tender with any accuracy . Unable to rely on this report , the company , in October , 1857 , sent out their engineer , Mr . Brownger , who laid out a very different line to that of tho civil engineer , -without any serious
difficulties , and sent in a tender on behalf of his employers . Tho local authorities referred the whole matter borne to Captain Douglas Gal ton , of the Board of Trade , who called for fresh tenders , on new conditions , and filially decided the competition in favour of the old company , in tho course of last week , securing them 61 . per cent , for fifty years from tlie opening of the line , and giving , them power to pay interest at the snmo rate on calls during construction , by including tho amount in their estimate . The Government give tho land free and allow the company to import all materials without duty , and to take -s tone and other materials free of cost from
government lands . The Cape colony is one of tho very few that can show an increasing revenue , and , what is more , a largo surplus , amounting in the last financial year to more than 40 , 000 / .
Ar02500
Ar02501
SHOULD BANKERS PAY INTEREST ON DEPOSITS ? The answer to this question , is theoretically so clear and practically so decisive in the affirmative , that we are aitonished to find the Times saying that " the extended practice of banks allowing interest upon deposits can easily be demonstrated , to be objectionable . " The journal would graciously allow—which is something in a would be dictator"joint-stock banks to bid any terms they think proper for the capital of the community , but
their system of business must not be confounded , " it says , " with the old ideas of safe banking " The community and the Times are at variance on this point , and the public will now only entrust its capital to those who condupt their business , according to the Times , on unsafe principles . Disclaiming all intention of informing bankers how they ought to carry on their own business , which we hold to be a piece of impertinence in public
writers , we shall only endeavour to show that the modern and extended practice of allowing interest on deposits is , at least , compatible with safe banking . Let it be remembered that this is a refined art ; in its present condition it is one of the latest growths of our complicated industrial system , and its practices can no more be prescribed by law or journalism than the practices of the iron , shipbuilder or tlie railway engineer .
"We explained last Tveek that the great extension of banking in modern , times has its origin in the vast increase of capital , particularly of share capital . As the rule , share capital is capital embarked in industrious undertakings , such as railways , jointstock banksj mines , teLegraphs , reclaiming lands , & c , andtlie extraordinary increase in such undertakings is one of the distinguishing features of modern society . It pervades the whole civilised world . By its means almost all great improvements have been in latter times , and will be in future , carried out . There will be as much or more capital required for new undertakings hereafter as heretofore .
Jointstock banks are not improperly named investment companies by fixe . Times . This is , in truth , the characteristic of' all banks . So far as they are connected with industry , and are not mere creatures of the Government , they all hold capital for investment , and especially for investment in new enterprises . When an enterprise is well established , and is of long standing , it is supported b y its own revenues . The very condition of its continued existence is that it shall yield a revenue , or be profitable , and not need help . In this condition its revenues may go into the banker ' s hands , it may sometimes require to forestal them , or it may require them to oc temporarily invested ; but it makes no demands on floating capital . This is all needed for new enterprises .
Now these are very numerous . They are not confined to railways , telegraphs , or opening new mines , which call on bankers , for , at least , temporary assistance . Every commercial transaction , every cargo imported or exported on a venture is a new enterprise . It has not been done before , and its results are always doubtful . It begins with the order of the article to be imported or exported , it ends with its sale and consumption , replacing , as jt ought , all the capital employed , and resulting in a profit . Every extension of cultivation , every opening of a new shop is a new enterprise , and
re-2 nires capital to commence it , while the returns are oubtful . l ? or new enterprises the capital in the hands of bankers is required , and to them it is generally applied foi \ Accordingly , it is considered a iulc for the employment of capital entrusted to bankers , tlmt it shall bo invested in such enterprises as replace , in comparatively short periods , like all dealing for approximate consumption , the capital advanced . A banker , then , whether a private or a joint-stock baiiker , is really the active agent for collecting and investing the floating capital of the community in . new and productive enterprises . This function requires a very peculiar skill . He cannot possibly himself know the chances of success
in all new and diversified undertakings , but he can acquire a knowledge of the men who conduct them . He may be a very Toad judge of the probable success of importing a cargo of wool or sugar , but an excellent judge of the character and means of the importer . He may he totally ignorant of the propriety of a farmer extending his business , but he may know Mr . Jobson to be a very trustworthy man . He deals with men , not with goods , and he fails or succeeds as lie estimates them correctly . As a borrower or receiver of capital , he requires little judgment or discretion , except in fixing the rate
he will give for it . As a lender , he ought to have extensive knowledge of the persons whom he trusts , and exquisite skill . Writers on the subject of wealth , especially English writers , are apt to confine their attention too much to material products , and overlook the more important moral and mental elements of success . They forget that labour without skill may be destructive , and that skill makes it productive . The banker must be skilled in the character of men as well as in the value of shares , and his opportunities of acquiring a knowledge of the former by receiving their money , and keeping their accounts , enables him to lend money , with
advantage to them , and himself . He thus can do at all times for hundreds or thousands of people who have small sums to spare what they could not possibly do for themselves . He can lend these sums with advantage to them and to himself . He spares them the trouble of disposing of their capital ; he relieves them from the anxiety of taking care of it ; it is in no danger from , thieves ; and he reaps a large reward by the services he renders them . He is enabled to give them interest on the small sums which they could not possibly obtain without his asssistance . He may have a capital of his own , and lm skill in employing it may recommend him to
others ; but , independently ot this , his peculiar knowledge enables him to invest money advantageously , and pay interest to those who entrust ifc to his keeping . Who then ; except the skilful banker himself , can decide what , he can give for the loan of capital and how he can employ it ? No one * Nor can any rules be laid down for the exercise of his art , especially as to the rates of interest he is to give and take for money . Each new enterprise must be judged of by itself and by the person who undertakes it . To prescribe a limit to the interest a banker is to give
for deposits , or the sura he is to take on deposit , is to hamper his discretion and substitute blind ignorance for perceiving skill . If new enterprises yield 15 or 20 per cent ., or even 50 per cent ., as many probably did at certain periods between 1852 and 185 5 , why should not the banker give 6 or 8 per cent , for money which he can advantageously and safely lend at 9 or 12 ? To say , then , that any extension of interest on deposits " can be demonstrated to be objectionable , " is to misunderstand the phenomena
and use inappropriate language concerning them . An individual banker may mistake , may be greedy or heedless , may give too nigh a rate of interest on deposits , and may lend on unsafe or improper securities , but no extent of allowing interests on deposits , and no rate of discount , no advances arc objectionable which the fact of success justifies . Our contemporary writes more than he reflects on such subjects , and so falls into errors which a little more thought would enable him to avoid .
"What seems to us wrong is the general practice of fixing a rate of interest for deposits , varying with the minimum rate of discount decreed by the Bank of England . The rule apparently by which the banker should be guided , is what lie can make by what ho borrows . This will at all times depend on the rule of profit in business and the demand for capital . But tlie capital in the hands of jointstock and private banks , and their advances on bills , & c , or for new enterprises , are very much in excess of the capital and advances of the Bank of England . There seems no reason , therefore , why
the men who do the most business , and liavc by far the best opportunities of knowing go ' od from bad business , should regulate their conduct by the conduct of those who do the least , and have only a limited means of knowing the nature of the business carried on . Moreover , the minimum rate of discount at the Bank is not determined by the general relation between tlie demand and supnly of capital and the real profit of business , but b y that , small quantity of the national capital which is locked up in its vaults , and by an artificial rule laid down b y an ignorant Legislature . The gold in the Bank 13 a very small portion of the national capital , chiefly
-Jvc ^V It N+Tl* _\ ^M ^,^,; ≫L ^Tlmuttlm Hub (Luuittl Thllll* ¦ «?
JHmnntih rnifc CnmimrriuL —?—
-
-
Citation
-
Leader (1850-1860), Aug. 21, 1858, page 849, in the Nineteenth-Century Serials Edition (2008; 2018) ncse2.kdl.kcl.ac.uk/periodicals/l/issues/ldr_21081858/page/25/
-