BANK OF NEW ZEALAND

Press, Volume XLIX, Issue 14659, 7 May 1913, Page 9

BANK OF NEW ZEALAND

MR WATSON IN REPLY

(.ritESS ASSOCIATION" TELBGJUM.) WELLINGTON, May 6

31a- WilHam Watson, tho shareholdersdirector of tho Bank of New Zealand, on being scon to-day with reference to Mr Benuohamp's statement, told an "Evening Post" representative that Mr Beauchamp had accused him oi 'side-stepping," of being "not quite ingenuous." and of proposing what is "not arguable." "Ho has suggested," Mr Watson wont on. "that instead of taking tho views of shareholders in tho Bank in Lonuon and Auckianu, wtoaro prominent men and business men, the views of tho same elates of men in those places who are not shareholders should bo taken, and then proceeds to say that directors aro bettor quauned to deal with policy matters than tho man in tho street. If that bo so, why recommend the view of the man' in tho street in face of tho Bank of Now South Wales and tho Commercial BafiK of Sydney issuing shares nt par. Ho says'regarding banks and financial institutions, that to his mind any proposition to otfer new shares in such companies is not arguable. May I quote from Joseph Palmer and J>ons (Sydney) monthly sharo list of the 22nd April, as follows. —'Union at £59 15s show* a los rise. . No announcement has, ns yet, bron made regarding tho now issiio, and the number of shares to bo offered has not, so far, been decided. We understand, however, that the shares will bo issued at par, though it may be some timo beforo tho offer is* made. No doubt it will bo a great boon to shareholders to have the opportunity of taking up their proportion at £25, as a Dig premium would forco many of them to sell part of their holdings to provido tho necessary funds. In a dull market new issues of stock should bo made on very easy terms to shareholders, otherwise tho market is flooded with sellers of small lots and tho price is unnecessarily weakened.

"Is Mr Beauchamp ingenuous when ho quotes tho Colonial Bank and Bank of New Zoaland as having suffered disasters in the bad years of the 'eighties' and early 'nineties,' and doee not mention that tho National Bank, tho Loan and Mercantile Company, and the National Mortgage Company, the Colonial Investme,nf Company, tho Otago and Southland Investment Company, Banks in Australia, besides rnnholders. merchants, and trades innumerable, also suffered in thoso t'mes? And does ho suggest that tho direction and management of all those concerns wero faulty, and that low prices and depression of trade were absent then, as they have bien since tho majority of tho Board of the Bank of New Zea"land wero appointed by tho' Government? Further, why does he not stato that tho Bank had well turned tho corner before 1898 when those appointments were madlo?

"I have never said that the Government directors are not as competent to deal with the finances of the Bank as those elected by the shareholders. That is not for mc to say. But Ido say that shareholders should not bo dumb at this juVicture, and that directors who wero not appointed by the shareholders are scarcely the persons to voice opinions on their behalf, when the shareholders can do it for themselves. "I have never said that the Board should not indicate what the majority of tho directors consider the terms and conditions should be, on which the shares of the bankshould be issued. Am I 'side-stepping , whon I say that, while the Board of the Bank of Australasia does that, it is left to the shareholders to accept or reject the Board's proposals? Does Mr Beauchnmp consider the analogy so perfect that he concedes to the shareholders of the Bank of New Zealand the same right as shareholders have in the Bank of Australasia? If so, I am quite satisfied. "Unless Mr Boauchamp makes ftlraccusations I do not propose to continue an argument which, despite his arguments, he considers 'not arguable.' I know that Mr Boauchamp, notwithstanding his suggestions ac to my disingenuousness, has stated his b<?- v Jief that I am acting up to what I necessarily consider my duty to the shareholders of tho bank who* have returned mc regularly as one of their representatives on the Board for the past fifteen years."