THE BANK OF NEW ZEALAND.

Press, Volume LVIII, Issue 11014, 11 July 1901, Page 5

THE BANK OF NEW ZEALAND.

A QUESTION OF DIVIDENDS. THE GOVERNMENT AND THE SHAREHOLDERS. (rHESS ASSOCIATION TKLEGRAM.) WELUNGTON, July 10. In the House this afternoon, the Premier moved that the balance-sheet of the Bank of New Zealand, winch was laid on the table yesterday, be printed. In doing so he clled attention to the- fact that it hail been stated in the public Press that the Bank was .mm- to pa-v a dividend. He would point out that very little ha* been paid oft by the Bank in respect oi tho Assets Realisation Board, and he himself thought it would he better if those entrusted with the affairs of the Bank first of all paid off their debts ~.-- --stead of paving dividends. The responsibility of the Crown, still remained mtact m respect of the Assets Board. H. thought he should speak plainly- so that there would be no mistake altenvai _s. If they did not say anything it would be taken that the Go-vernmc-t tacitly agreed with what was bein- done. At the same time, he might say that no one was tetter pleased than himseli at the success of the Bank.

Mr Pi-rani expressed surprise at tbe new dictum of the Premier, that it was necessary to pay off debts before declaring a divid-iid. or going in for further expenditure. U that principle were applied te the colony, what would happen to the proposal to establish a liua of steamers to carry the colony s produce to ths outside markets? It was, he understood, proposed to spend tour millions in this direction, and the colony was iv.i asked to pay off its debt first, Study they could not ask the Bank to conduct its business on different lines to those of the colonial Government. He considered it an improper thing to ask the House to criticise the Baifk on hearsay evidence. He did m.t think the. directors Avould dream of paying a dividend under the present circumstances, as it was probable that within two years they Avould have to come to the House for a renewal of tho large guarantee. Mr Jas. Allen regarded the Premiers statement as very damaging to ths Batik. It was provided in the Banking Act of 1893 that the Bank could pay a dividend in due course, but he took the Premier's remarks to imply a threat to repeal these clauses. (Mr Seddon—"No.") Ho considered the Premier's statement Avould do a gr_.it deid of harm to the Bank and dishearten tho shareholders, and those who were administering the Bank's affairs. Mr Seddon, in replying, admitted that the Bank could pay a. dividend in due course, but be thought *ifc ay.-is better that they should not do so. If the directors paid a dividend in the present circumstances of tlie Bank they avo .Id be liable under the existing commercial law. The chairman some time ago ma do a statement that tlie Bank might bo able to pay a dividend, but he subsequently AA-itbdreAV it, as he found it had led to some mi-stippi-hension. He (Mr Seddon) could tell the House there was no intention to amend or repeal any of the provisions of the Banking Act, and there AA-as nothing behind the statement lie had made. It was quite clear that in lavo years or so the- Legislature Avould have to reneAv or extend the time and position in respect of the colony* guarantee. The liability of tho colony through the Assets Realisation Board still remained, as very little had been paid off. He Avent on to say he did not think the Bank Avould cost the cohmv a penny piece. The action of the Legislature had saved millions of money, and averted a financial disaster. In face of the fact that tlie Bank's shares were going to a fictitious value, he thought it better for him fo stand up manfully' and" state the true position of affairs. Thp payment of a dividend by the Bank AVit. ..of; ffiandatory, and the statement that had.-lobtained circulation might lead to expectations that, realised. It had already led to speculation.' and it a. as better to do.is ho had done tliin alloAv the statement to go unchecked. 113 complimented ths Bank and its officers on the success of their business, and said the appointment of Mr Macintosh as Government Auditor was one of the bent things that ever happened to the Bank and tire colony. Never since its inception was the Bank of Ne*v Zealand in a better position than at the present time.

Tho Premier's motion was agreed to on the voices.