BANK OF NEW ZEALAND,

Press, Volume LV, Issue 10058, 9 June 1898, Page 5

BANK OF NEW ZEALAND,

[By Tkl.kur.vph.}

[FROM OCR SPECIAL OORRESI'ONDEN'T.} WELLINGTON, June 8. The Ministerial morning journal to-day contains a somewhat extraordinary ia*ticle on the Hon. John M'Kcnzie and the Bank of New Zealand. I( flatly contradicts some of tiie statements of the Minister for Lauds. With regard to Mr M'Kenzie's statements as to an overdraft of £34,000 to an insecure Wellington linn, the importation of wheat by the Bank, and the proportion of representation on the Board, the "Times" says: — "Coming as they do from a responsible Minister of the (Jrown, these are very grave charges. Moreover, as they are made, according to Mr M'Kenzie's own assertion, with the utmost' deliberation, and as if true their pronouncement would be sufficient to shake tne confidence of shareholders and the colony as a whole in the Bank's management, there is a plain necessity for their investigation. It is known that Ministers havfc sources of information that are not available tc the public, namely, through the President and the- Government Auditor. Thus additional weight is given to Ministerial utterances having reference to the Bank's affairs, and thus also there is added necessity for such utterances, if they are adverse, to be inquired into. The Cabinet ought to at once make exhaustive enquiries into Mr M'Kenzie's allegations, and it' they are found to be true fcuko suoh steps with regard to the responsible officers as would be taken in any other concern supposed to be conducted on business principles, or, if they are proved to be unfounded, have them withdrawn or explained." The article then proceeds to discount the Minister's statements, and says: —"The facts with reference to the first of Mr M'Kenzie's charges prove to be that there was a rumour (but a grossly exaggerated one) to the effect mentioned. It is well known that the firm referred to is not insolvent, but has a large surplus over 'liabilities; that one of the partners is wealthy, independent- of his interest in the firm , , and that the amount, if the overdraft lis, less the security, much greater than has been stated. As to the wheat purchases, the quantity mentioned as* 3 having been imported by the Bank's officers was only about a twentieth of their requirements, we believe, and was also of n quality not easily procurable, but badly needed. With respect +o the importation of wheat, apart from the consideration just mentioned, that is explained by the fact that freights are as cheap from Sydney, where the wheat was purchased, as from Lyttelton to Auckland. The assertion that the country has only one director out of five on the Board is incorrect. It has two out of five, one of those two, the President, having a power of veto. A statement which is, to say the least, startling is that the shareholders have no interest in the JBank. The Legislature has authorised the Bank's Board to pay them 5 per cent, on the , amount oi, the last call, probably £450,000, if it earned after first paying the prior statutory charges, and there is goad reason for believing that there ia every prospect of this being paid in future years, if not this year." The paper also adds:— What is common rumour is not ipso faoto true, and Minsters are not entitled to know, or to be able to divulge, ijhe particulars of sutsli. a transaction as formed the gravamen of jyp M'Kenzie's main charge." , . . This article is generally looked upon Here as being inspired from a certain quarter, and tlttre is much comment in commer&Al circles regarding it and the assertions of toe Hon. John M'Kenzie. The proposal toefll the Bank to a syndicate does not, 1 nna, meet with the unanimous approval of business men. I have it now, on good authority, that there is no necessity for the Banks losing as much, as two millions, including t&e loss on assets, and it is urged that it wouM be a paying concern if placed beyond tne reach of political control. Further, it « pointed out that nc syndicate would buy the Bank unless they could ccc an assured profit greater than the ordinary, profit arising from a mere capityU and this profit might just as well be secured by the colony as by iv syndicate. On the other hand, it is argued that the Bank wrij be ruined under political -control, and tUft unless it is made absolutely independent, of such control, the loss to the colony wtU be greater than two millions. The question is S important one, and » likely to loom large on the political horizon in the near future.

Mr M'Kenzie's remarks regarding the overdraft, referred to by our correspondent, were not reported in detail by tip Vxw-Aam-ciation Tlo following extract ie from the "Otago Daily Times'" report:- ■ "Referring to the Bank of New Zealand, the Hon. mniater denied the statement by Mr Scobie Mackenzie that the Treasurer had deceiv-id tin '.ountry as to the amount of money iequiied. It was, he said, people connected with the Bank who had deceived tllie Treasurer and the country, and he was very eorry to say that some of those peopte were still iv office in the Bank. He cUeJleneed Mr Scobie Mackenzie to assist in their removal. The Government last session mtro.luee.l a Bill dealing with the Bank. The country had but one director and the shareholders had three, and he maintained? 1 that the country had a right to be very differently represented, as the interests of the shareholders were nil. The' Bill of last session, or another one, would be introduced. They mi»ht have no objection to the Bank beißg sold to a syndicate, it they could get one po buy it. If a company was formed to get rid" of the Bank he should be glad, for mm ■careful and riudent management it could Dβ made a "good paying concern. Ho was not prennred to leave the Bank in the hands .of the' four men in Wellington who were guiding it at present, nor with any four men in Wellington, but therj should be representatives from ether parts of the colony, &6d the producing industry should bo rimrcsenMl. What could they think of a Bank that wbifld allow an overdraft of £34,000 on an mercantile institution in that had just become banUrnpt, and with securrey for only about one - tenth of the draft? * What he was saying witfr gard to the Bank would be i( rent over the colony in the worst c6l£rijrs by the Press Agency. He made tihijHisBertion because some eighteen monthfe; •when at Seraldinp, he made a «tatemeß|Jto the effect that the Bank's officeT/rtWjre making use of their positions for political purposes, that-they ought not to "tlft-'So, whether for or against the Government, ffod that if they went on doing that thftt r the Bank might have to go" into liquidation. What .was telegraphed all over the colony then was that lie hod said that the Bank was going to be put in liquidation, arid down came telegrams saying that the utterances c* tha Minister were destroying the Bank;-'