THE BANK OF NEW ZEALAND

Press, Volume XLIX, Issue 14762, 4 September 1913, Page 6

THE BANK OF NEW ZEALAND

The idea of the Government in drafting the new Bank of New Zealand Bill has ovidently been to disturb the status quo as' little as possible, while giving to the Bank power to raise increased capital, which is necessary, .not only in view of the fact that the Government guaranteed stock of one million matures next year, but also to meet the expanding needs of tho Dominion. The Government's guaranteo is to bo renewed, and stock to the amount of one million will bo issued to pay off the existing stock on its maturity. Provision is mado in tho Bill for £50,000 a year to bo set aside as a sinking fund by the Bank, so as to pay off tho new guaranteed stock in twenty'years. Authority is given to increase the capital of tho Bank hy three millions sterling by the issue of 150,000 "B" preference shares and 300,000 new ordinary shares, each fully paid up to £6 13s 4d each. It is explained, however, by the Finance Minister that it is intended to raise only a portion of this fresh capital now, and to make other issues as occasion requires. Tho "B" preference shares aro to be taken up by the Government, and tho rato of dividend will not bo limited to ten per cent, as in tho caso of the existing preference shares. Tho new ordinary shares will be offered to tho shareholders in proportion to the number of shares they already hold, and by agreement with tho Government the rate of premium to be charged on tho first issue, both of preference and ordinary shares, is fifty per cent. The directors remain as at present, the Government having four and the shareholders two. The Bill is to go before the Public Accounts Committee, and will perhaps be amended in some details. The general public, however, are now convinced that it is expedient that the State should retain its control over the Bank, and the principle of the Bill will meet with wide acceptance. Tho arrangement is very much better than a State Bank, because, while the Government has supreme control of tho Bank, tho presence of the shareholders' directors on the Board is a safeguard against the abuses that are bound to creep in where there is State control unfettered and unchecked.