THE BANK OF NEW ZEALAND

Auckland Star, Volume XXV, Issue 68, 20 March 1894, Page 3

THE BANK OF NEW ZEALAND

Tflß HALF-YEARLY GENERAL.

(FROM OUR SPECIAL CORRESPONDENT.)

London, February 9.

••What have we come to hear to-day?" asked one shareholder of another as they wended bheir way slowly up the stairs of the Cannon-street Hotel to the tiny No. 4 room provided by the Directors of the Bank of New Zoaland for the accommodation of so many of that corporation's proprietors as might have curiosity and leisure sufficient to objend the "half-yearly general," ab which.be ib said, neither raport nor accounb are presented. And the answer came prompt, "Oh I suppose we shall be jreatad to a few remarks from thab splendid optimist, R. 11. Glyn, supplemented by a few platitudes from Sir James, a suggestion from Snow, and a querulous query from—Glass." "Bub," said tho questioner, "We have been told by a connection of the Chairman that Glyn ia going to bell ua something particularly importanb regarding the Bank ai) d the Loan Company." " Well," said the obher man, " I'm open to bet bhe odd shillings of my dividend that wo don'b hear anybhhig to-day thab we don'b know already." The last speaker's forecasb of events pioved wonderfully correct, barring that gir James Ferguson said never a word. Mr Glyn made rather a long speech for one who confessed that he had " really very little to say to you." Having remarked that it was nob the habit of the directors to present accounts ab this period of bhe year, he entered sbraighbway into the matter of the New Zealand Loan and Mercantile business as affecting the Bank. He expressed sympathy with the shareholders who had had to. wait so long for tbe reconsbrucbion scheme. To wait six monbhs beforo they knew their fate was very, hard, bub considering the difficulties encountered in reconciling the various interests, he seemed to think the delay quite unavoidable. He then proceeded as follows :—" Any reconstruction of this company would have been impossible withoub the aasen t of this bank, because we hold more than a,tuple security for all bhe advances we have made to them, and ab the presenb moment th c matter nob having gob any further than the scheme boing promulc-ted, we still hold those securities. Bub bhe question vhich came up for consideration by bho Board when approached by bhe reconstruction committee was this—whether wo should stick to our securities, so to say, and realise them, or whether we should come into the reconstruction, provided it was one of which we approved and one which of Course would nob pub tho bank in bhe position of losing any money. I do not think that the liquidation of this Nflw Zealand Loan Company would have had very much effect upon the mercantile community in the colony, bub when one looked through the list of shareholders in New Zealand one could not help realising the facb thab if liquidabion ensued and if a call were made of somebhing like £22 10s—an enormous amounb of wrong would be inflicbed there upon a number of innocent people, and we thoughb ib was our duty, provided we could come to an arrangement which would nob involve bhe bank in any loss, to do what we could to help the colony oub in bhat way, and I trust the shareholders will approve of whab wo did in the matter. (Applause.) A PROVISIONAL AGREEMENT WITH j THE LOAN COMPANY. [ "After many interviews and much negotiation, a provisional agreemenb was entered into. Ido not propose to state the particulars of thab agreemenb, because ib depends entirely upon whebher the whole scheme is put through ab the meetings bhe Loan Company will have to hold, and also upon tbe sanction of the Courb, and therefore I ask you to take ib from me that thia agreement,- while it very materially helps on the reconstruction of theLoanCompanydoes aot prejudice tbe position of the bank. <Hear, hear.) The scheme struck me as bein<* a very business-like one. lhe scheme "will have to be approved by a certain number of meetings ef the shareholders, and also by the courb, and bhe only opposition I can conceive of will come from the terminable debenture holders. They are very much to be pitied, I think, butvab the same time they musb not forgeb thab if thia is going to be a case of liquidation, and everybody, like ourselves, is going to sell off hie security jusb ab his own sweet will, thero wilf nob be much left for them ■whereas, if there is this Bmall amounb of prior lien pub in fronb of them, and things Hook up in Australia, then there musb be a -very good fMure indeed for the new securities these people will bake. I hope, therefore, that tho terminable debenture holders will nob npseb tho scheme. However, as far as the bank ia concerned, ib simply means thab it the scheme does nob go through wo shall reverb to tbe position we aro in today, and shall be perfectly well secured. (Applause.) Beyond the advance to the Loan Company we have no commitments. Ever since bhe •mew Board were appoinbed, the position lhas been simply thab of banker and client. PROGRESS OF TEE BANK'S BUSINESS.

Tfaere ia very little to tell you aboub the bank's own bueiness, which goes alone in the usual rather slow bub steady way. Wo have beeu fortunate enough to secure a much larger share of the. purchases of woo bills in the Colonies, partly owing to the tact of the disasters in Ausbralia bringing many new customers to us, and I need hardly say thab that sort; of business is very good. The money market in New Zealand has been exceedingly stringent for bhe lasb bwo •or three months and tbe quarterly re tho Governmenb will show a .ail:ing off in tho fixed deposits of aH the banks, •which is rather a novelty. This does nob •appear to be caused by any wanb of confidence, tho business" seeming to be very wound ; bub tho people now can evidently employ their money there a.i better rates t. tan the banks can offer to give bhem tor thwr deoosits. They can get 7or 8 per cen V. on mortgage?, whereas the bank does not .*ive them moro than 5 per cent. As regains that importanb asset the Bank ot New Zealand Estates Company, in is too early to &»y what the results of the year will be but the reports recently received from the colonial manager of that Company are, I think, satisfactory. One thing v bat handicaps as ab thisi moment is tho liif price of wool and of other New Zealand produce. We have been hoping that wool and everything else would go up. I am R.'od thab there seems to be BomePcbanc"of the Tariff Billi In.America passing more quickly than might have been expected. If that proves to be the.case.ito put wool upon the free list, and that *iU give Australia a lift. We have a very •atisfactory telegram from the genea manager. It reads as follows :- Colonial revenue coming in well, and a large surplus expected 31sb March. Population flowing in. Pastoral prospects good. At these interim meetings I find ib hard to Bay anything to you, and I am afraid some of you come a long way bo hear very^ little All I now wish to do is to tender the thanks of the Board-aud I am sure.youiwillai cordially agree in thia-to the stall, one -nd all, for the zeal and energy they have displayed in the conduct of the b»?* neßfl °f the bank during the past Bix monttis. vve have a mosb excellent, staff, full o zeal for the welfare of the BaDk of New Zealand. lAppkuse.) I have no resolution to propose, bub any questions shareholders like co »sk, I shall be very glad to answer.

The momenb Mr Glyn sab down up bobbed anobher shareholder wibh query and some remarks apparenbly meanb complimentary bo bhe Board. AMr Gibson followed in bhe same strain, both being commendably brief. Then came Mr Snow, who, after lauding the good work of the Chairman and hia colleagues, made his proposal. He said that from advices he had received from New Zealand he understood thab business was advancing there rapidly and soundly. He should have thought that the directors musb have had a great many more applications for a larger amounb of business bhan bhey had done. If they had, would ib nob be wise bo give permission to those shareholders who were desirous of so doing to pay up the difference between their £5 5a and £7 103 shares and their original value, namely, £10 per share. A year auo he raised the question, ■ and the Chairman replied thab bhe bank had quite suffi cienb money ab command and did nob require more. If bhab were the case bhab was all bhe^reply he wanted. But if it would be of any assistance to tho bank to have £500,000 or £600,000, if a whole or a majority of the shareholders subscribed, he believed they would have a very much better showing at the end of the year, and thab instead of having 5 per cent, they would be able to return to their 7 per cent, and 10 per eenb. dividends. They wanted to increase their reserve very largely—thab ho wanted particularly to be done —bub ib musb neb be forgotten thab they had been a very patient body of shareholders, for he did nob bhink bhere had been an unkind word said ab any of theso meebings. If, therefore, they could receive from the Board somo pioposal of this kind —of course ib would nob be compulsory, bub enbirely ab bhe opbion of any shareholder—he waa certain they would view it with favour, and perbapa some suggestion might be made to the shareholders when the report of the present proceedings v as sent oub, bhat the directors would be prepared to consider applicationa for permission to make up their shares to the original value of £10 per share, as he had already proposed, provided the Board felb bhey could use some £500,000 or £600,000 satisfactorily and with profit. He felb he musb thank the directors for bho admirable way in which they had tried to seer through tho difficulty in connection with the New Zealand Loan and Mercantile Company. (Hear, hear.) Had they gone for their " pound ©f flesh," they could see whab ib would have meant. Most of the shareholders of that unfortunate company were colonists, and this bank had to get ita business entirely from them. If the bank had pub a rough hand down the colonists would nob have forgotten it: but even in business transactions such as these, when a body of gentlemen had done their best to assist another corporation it would not be forgotten and he was quite certain that as those in the colony would have met with fearful disaster if the bank had acted as he had intimated, bhey would bhank the directors of the bank for the action they had taken.

The Chairman made answer briefly. The suggestion made by Mr Snow waa very valuable if ib were within the range of practical politics, because if they could get evon £600,000 bhey could use ib to very gruab advanbage now in taking up new business, as Mr Snow said, bub he (the Chairman) could nob make up his mind how many shareholders would respond bo the invitation. If only a small number did tbey mighb be landed with four classes of ghares. It was a very importanb matter, and although he did not think they could prepare any suggestion in time for the circular whichthey would issue with a reporb of the present meeting, they would take caro that the matter was referred to in the next reporb, and they might, perhaps, be able to formulate some plan. Mid applause the Chairman remarked thab bhe business of bhe meeting was over. Such was bhe hurry of shareholders to geb oub to lunch, that they forgot tho vote of thanka for a moment. Indeed, a dozen or so wero well outside the door when someone in front eaid in a pained voice, '* Gentlemen, I think we owe a vote of thanks to the chair." "Hear, hear," said everybody. •' Thank you," said Mr Glyn, in reply, and uexb momenb the room was empty.