THE BANK OF NEW ZEALAND.

Press, Volume LII, Issue 9272, 25 November 1895, Page 2

THE BANK OF NEW ZEALAND.

BPECIAL GENERAL MEETING.

WELLINGTON, Novembsr 19.

A special general meeting of shareholders of the Bank of New Zealand was held this afternoon. Mr "Watson, the President of the Bank, said the meeting had been CiUed for the purpose of altering the deed of settlement of the B*nk so as m> make it conform to the provisions of the Bank of New Zealand and Banking Act, 1895. These alterations were considered by the Directors to be beneficial to the interests of the shareholders. The Beard had learned with regret that some unknown person or persons had sent circulars to the shareholders asking for proxies to be used in opposing the carrying of these alterations. The Boird were quite aware that the response to this anonymous invitation had not been each as to cause anxiety in the minds of those who had the best interests of the Bank at heart; but they thought ifc well that he should here state the difference between the footing upon which the Bauk now stood and that upon which it would have stood had nob the Banking Acts of last session been passed. There could hardly be any doubt in the mind of anyone that, had the Directors in the first instance, and, withouo taking any steps to obtain the assistance of the Legislature, made public the actual state of affairs found by them after balancing accounts at the 51st of March last, the Bank would have to stop payment, and probably to wind up iU affairs. Neither could there be any aoubt, in the case of the Bank having to wind up, that the shareholders would have had promptly to pay the last farthing of the reserve liability. Happily the appeal to Parliament averted all this. It had been a noble feature of the politics of all English speaking countries that, when public dangers had threatened, the members of the Legislatures had risen superior to considerations of party. That wa3 the case in the crisis which it fell to the Naw Zealand Legislature to deal with last session. The leader of the Opposition and several of hia followers in Parliament were as earnest iv supporting the banking measures as were the Premier of the colony and others on the Ministerial side. In the Upper House there were only four dissentients to the measure, and it might, therefore, be said that the Parliament of the colony on that occasion had put aside all party spirit and acted, after due deliberation, in the manner which appeared to them to be best in the interests of the colony. The Legislature, by contributing fresh capital to the Bank and separating from the Bank the landed properties in New Zealand, had enabled provision to be made for all bad and doubtful debts, had strengthened and established the Bank's credit, and placed it, as regards facilities for the transaction of business, in a position equal, if not superior, to that occupied by any other Bank. The second call, on the reserve liability, of £3 6s Bd, was to be spread over eighteen months from the 30th of June, 1896, and there was every probability that on the amount of this call the shareholders would receive interest. No farther cal( could be made on the reserve liability until after the 31st of December, 1898, and unless the prices of produce declined to such an extent as to make a loss on the assets of the Bank unavoidable, it was extremely improbable that any further call would be made. With regard to the veto of the President, it was simply intended to set aeide any resolution which would damage the large interests wh'.ch the colony now held in the Bank. He thought it would be admitted that thi Legislature, in making thie provision, were only safeguarding to a reasonable extent the interests of the colony. The ■shareholders, having a majority on the Board of Directors, continued to hold the " actual" management of the Bank in their own hands. No advance could be made and no policy adopted if the majority of the Board opposed it; therefore, the interests of the shareholders were in every way conserved. He then moved the first resolution, namely:—"The deed of settlement of the Bank of New Zealand be altered so as to make it in conformity with the Act of the General Assembly of New Zealand called the Bank of New Zealand and Banking Act, 1895." The Hon. W. W. Johnston seconded |the motion. Mr R. Allen (Nelson) moved as an amendment—" That in the opinion of the shareholders it is not desirable to alter the deed of settlement in the manner proposed." He said the alteration meant that they were giving into the hand of one man the whole control of the institution, and they would be for ever prevented from having any voice in its management. The conditions were exceedingly degrading and humiliating to the shareholders, and one could scarcely conceive them to exist outside of Russia. The shareholders had received bo consideration, and if these proposals were carried they would have to pay up every penny of the reserve liability and would at last be kicked out without receiving a farthing benefit. With .regard to the bait heid out by the Directors that they would receive 50 per. cent, on the second call, it was sheer moonshine, as the Bank could not earn the amount. He wished to impress upon the shareholders that, if they rejected these proposals, the second call need not, and could not, be made, at least tor the purpose mentioned, and they could put themselves into the position of exacting some consideration from their newly-acquired partner. They might be told, as they had been on previous occasions, that the Directors were very hopeful; but it had been repeatedly proved that their utterances had to be taken with a very large grain of salt. Mr W. Weir-seconded the amendment. Mr Paul Coffey endorsed the remarks of the mover of the amendment. The whole thing from end to end was a perfect farce, a delusion and a snare for the unwary. The colony did not stand in the slightest danger from the Bank of New Zealand. It was the poor unfortunate shareholders who were losing every penny of their money. A lot of bosh had been talked about what- would have happened if the Bank had closed its doors. Had this occurred the shareholders would have been liable for every penny, but as against that, they would have had the assets of the Bank. He strongly objected to the new arrangements in regard to the staff of the combined Banks. Mr Watson, in reply to Mr Allen, said that the mere passing or not passing of the alteration would not affect the call being levied. As to what Mr Coffey had said about the staff being increased, he pointed out that a lot more business would now be done by the Bank of New Zealand. None of the Colonial Bank staff had been provided with positions, except where it was absolutely necessary. Mr B. Hallenstein could not see what purpose would be served by carrying the amendment. He sympathised with the supporter of the amendment in many things, but it would be as well to bury the past. If the Government had not come to the assistance of the Bank it would have meant rnin to many of the shareholders, aad caused great trouble throughout the colony. With the present upward tendency for most of our productions, the downward coarse had been arrested, and ihe result to the Bank of New Zealand was likely to tarn out better than they had expected. A shareholder had remarked that a great many of the Colonial Bank servants had been taken on. He thought it was a wise policy, independent of whether they were required or not, to keep on the leading men of the Colonial Bank. Ie would enable them to carry on the business better, and carry an influence with the customers of the Colonial Bank which they hoped would add to the earning power of the Bank of New Zealand. He thought the Bauk of New Zealand Directors had acted rightly throughout the amalgamation negotiations. The colony was now on the eve of better times, and he had great hope for the future. Mr Coffey explained that, in referring to the staff of the Colonial Bank, he merely wished to point out that it was a striking proof of the system of economy which the Bank of Hew Zealand was about to enter upon. The ballot was then taken, with the following result:—For the amendment 4349

vote*, against it 17,541 .votes. The amendment was lost and the motion was put and carried on the voices. Mr Watson then moved:—" That the capital of the said Bank, consisting of £900,000 in 100,000 ordinary shares of £5 53 each paid up. and 50,000 ordinary shares of £7 10s each paid up. and alto the proceeds of the call of £S 6j 8d made byjthc Directors of the said Bank on the 29th day of November, 1894, be dealt with by the Directors, as provided in the said Aot, and be cancelled." He said the resolution was only to bring the deed of settlement in line with the Act. Mr (Juffey asked what amount of the March and July calls was defaulted ? Had any steps been taken to recover the amounts from the defaulters ? Mr Watson said the last time he had looked into the matter he had found about 95 per cent, had been pail, and quite recently lie had looked at the second one, and found that it was coming in pretty satisfactorily. Steps had bsen taken in some cates. As a rule, thoas who could pay the call had done so. Some people were unable to pay. It waa no use ru ning people, and they had not been too hard. The Imotion was then i>ut and carried, there being one or two disseutieats. The meeting then concluded.