The Press. SATURDAY. OCTOBER 6, 1888.

Press, Volume XLV, Issue 7172, 6 October 1888, Page 4

The Press. SATURDAY. OCTOBER 6, 1888.

When we published in these columns j the report of the . Shareholders' Committee on the state of the Bank of $ew Zealand, we were glad also in bur leading article to express our satisfaction with the steps recommended by the Committee for ensuring in the future the sound positioriof the Bank. It has been a further satisfaction to us since { to find our views on this point corrobo- i rated by the telegrams L received, riot only from, other, parts of the colony, but what is still more important, from the mercantile circles in ; tibndon. It cannot now be doubted that ,ibjhe manner in which the Committee have faced ■ the situation' and' f tße thorough-going character .of their recommendations, have eecured the public confidence, which is so necessary to the well-being of the Bank j and that the "radical "change 0, which is'promised in its ?' administration," may be relied on afc the best means of promoting the in-; terests of both the shareholders and the public. ; . '•> j So far, welL We have now to turn >, to a part of the question of more serious import, but one which cannot be, ignored, not only as a matter of public "duty, but—we do not hesitate to say it—in the interest of the Bank itself. What is it which has led to the necessity for the drastic measures recommended by the Committee 1 " The' " position of they,tell sus, is such " as must be eminently unsatis- " factory to the shareholders." " Our " examination disclosed a ncass of £c- " curities taken in support of, weak " accounts, the value of which had " fallen greatly, find many accounts in "liquidation, or which ought, to be so, " the cover for which had become ob- " viously inadequate ; altogether 1, in- " volving losses which the Directors " had not faced, but which upon a •'• Tigorous examination, we feel cori- " vinced will absorb not only the "whole of ■ the reserve fund, but also " nearly one-third of the paid-up " capital of the' Bank—say, £800,1)00 " in all. . . • For years past the Bank " has been paying a rate of dividend " which ought not to have been paid. " . ... The,-principal Australian;lpsses " ha4e been' made" inSydney and Ade- " laide, where the selection of Manager " was in each case, to say the least, ( *i. unfortunate. -In Sydney,'- after a " gambling career long known to " most people, the Manager was " convicted of embezzling the Bank's " funds, and in Adelaide money ap- " pears to Lave been advanced, or " rather squandered", in a way which " can only be characterised as reckless " and disastrous." So much for Australian m?' In Auckland war regret|-to " find that though the head office of " the Bank is there, and ,thp ; . .affairs " under $be iinmediafcei eye of the " Directors, the general character of " much; qf /the. business; carried on " has been most objectionable. . . Pro- " posals coming from,,pr influencedby, " certain persons appear td "with ready aupport*. . , without " adequate' security or warrantable " prospect of advantage or even safety " to the Bank.. Such advapcea . . . "account for more than „ halt the " whole lose • now .disclosed." ifeeference is also made to the y heavy " losses " incurred , in the :; , South Island "to a large extent through " rash or dishonest inanagemenl;." the.'; Ctoiumit^; v ;isaj; "we find that advances have' been " made to some of the Directors upon " insufficient security, and from these " advanced a heavy Rhki hae arisen, " estimated at over £160,000,' while " certain transactions have' come under " our notice ©sHirig' for" the gravest " cebsure, if not for' more , specific "action; .. .. * As regards Ltto re- " sponsibility for this state of things, " the Directors,. ag , your nominees, " entrusted with the full power of the " Bapki napon- " sible, "anS* beybncT "the of;.*he Bank's "policy appears to have been for | "tnany : years ia che - nandi j

L a !L mited ? ircle, wit^wucT^ e **iite general manager was intteiiteW " associated,, we ehould probably hJL "said no more upon this head but for " the circumstance " to which they m> on to refer. This circumstance an. pears to be that Mr. Murdoch* the late General Manager m tion, when applied to for certain explanations, attempted to throw th& responsibility upon the Bank Inspector Mr. MtmRAY, who appears, however' upon the careful examination i£j»£ toted by sthd Committee, to be xs&L thoroughly cleared of any imputati4 the matter: " I g This is the indictment, and a more damaging indictment has certainW never yet been presented against tbe management of any Banking institution doing business in Australasia. The Gommittee go through the whole ranged the Bank's operations. Whether it be in Adelaide or in Sydney, or in either the North or the South Island of our own colony it is the same tale. In Sydney a niau like Holt continues manages under circumstances inferring the gravest neglect on the part of tba Directors, whose duty it was to knot of his proceedings. In Auckland" the reckless eystem of advances, under the very eye of the Directors, accounts fof more than half of the whole loss-suv tamed by the Bank. Schemes, we ate told, recommended by v certain pep. sons," are supported without any proper regard to theßauk'sadvantage or safety. Some of the Directors even have taken advantage of their position to an extent involving a loss to the Bank of j not less than £160,000. As a boij they appear to have virtually given up the management to a limited - circle, with which the late General Manager was intimately associated. The whole loss time caused is estimated by the Committee at - and the immediate result is that, every shareholder is a loser to the extent of one-third of the capital which he has invested with the Bank. This matter must not be suffered to rest here. Either too much is die. closed or not enough. Who are the " certain persons " whoso influonce has led the Bank into bad in vestments t Who are the Directors who have had its money to the extent of £160,0001 Who are the clique with whom we are told that the late General Manager has been associated? Wk&t are the transactions which |»ye come binder the notice of the Committee "calling for the gravest " censure, if not more specific actionf Is it not possible to recover some of the money thus improperly got hold of 1 Must the unfortunate shareholders be mulcted, without redress, of onethird of their capital, while these who have had their money are allowed to go unpunished ? Let there be every discrimination between different degrees of wrong-doing, and still more between innocence and complicity. But in order ■to be able to '. discriminate, there must bo a full knowledge of the facts. We are told "that " through deaths and retirements the " Directorate and Chief Management) " have been virtually reconstituted." This is anything but sufficiently explicit. Much more is wanted in order to render possible the " specific action" spoken of in another part of the report; and if the statements contained in the report are true, that specific action must" be taken. Not only in the immediate" interest of the shareholders, bu| ! /or the public satisfaction, it is neewary that the guilty parties, whoever they are, should be exposed and followed up. We cannot doubt that this will be done. With such a report as that before the shareholders no other course is possible. The sale of the estate of the late Mr. John Patebson reported in our com*" mercial column on Thursday last tnusfc have been pleasant reading /or all' owners of land. The prices realised bring back the memory of old ttoes, Of course, it was the pick of •the'igricultural land in that highly favored district, South Canterbury, that was being disposed of, it was conveniently situated, highly improved, and partly laid down in crop. Yet, with all these considerations, it "required a buoyant confidence in the future to evoke the spirited competition which our columns . chronicled. The entire estate, comprising upwards of a thousand acres, averaged £18- per acre all round, arid,.Jome sections, on which there were, neither buildings nor crop, wero bought atX2l« The purchasers were not but men "who intended to farm the land, and who no doubt saw their wy to do very well out of it. Ten cr.» dozen years ago the sale would not h»w t been thought remarkable, for ' thus* were the days of. inflated values, when men bought without regard to tw return which they could make out » their investment. Since those halcyon days landowners have learnt a hirf lesson. They have learnt that we value of land like the value yf Jj£ thing else, is according to_vo» you can. make out of it. JDußng the" last few years the ,?ff of farming 1 have been reduced W a vanishing point, and land W become a scarcely saleable asset. « this state of things to be permanent with us or is it temporary? » ***■ necessity of the ease, or is it but» &» ing phase'of our condition arißn *?r: of the curiously congested state of » world's commerce? The question* one most vitally affecting the futu»£ the-colony, and though the «WJ all point* to the one answer-^ tb#;«£ stagnation is temp©*a*JV. st « _ a M not without feelings of relief -v* one sees the tide fairly turner It is a long time since the outlooK «»*- ---been as bright as it is at the m <™P« Prices are for once in efeysoj round. All our staples are «W# * remunerative~rates, "and there w»tinct revival of enterprise. Comma; the top of these favorable sy m , looks as if we were going to n&w sharp revival oi confidence in th*w of land; the pried of land is M *J of our 1 faith m the future. Jx f ,a^ r . ounce of practice is worth a bun weight of theory, co is farmers are willing to give farms worth more than r\. _ talk and protestations as an of what they believe the . farming to , be. Men .- judged i not hy their WT r ~ by their actions, and find practical farmers cb **J,4 buying rural land at £18 p# take leave to doubt that faru» wg not pay. Durmg the last n*ejr we agree that on the whole »vm

tbe next five {Et it will pay hawieomely, and we to see that the fannefs eelves evidently share that beUef. Higa priced land is not an unmixed blessing ; Sieed, where the tillers of the sod are not the owners it is a curse; but ii tne sgricultural industry flourishes land . must go up in price, and there are few ■<• better tests of the pro»penty or a •Ottntrr than the value of its soil.