OWNERSHIP OF BANK OF N.Z.

Press, Volume LXXXVIII, Issue 26857, 9 October 1952, Page 10

OWNERSHIP OF BANK OF N.Z.

MOVE FOR RETURN TO SHAREHOLDERS COMMITTEE REPORTS ON PETITION (New Zealand Press Association) WELLINGTON, October 8. The Public Petitions Committee of the House of Representatives today recommended the Government to consider a petition seeking the return to private shareholders oi shares in the Bank oi New Zealand, acquired by the State in 1945. The petition is signed by Mr T. N. Gibbs, of Wellington, and seven others, all previous shareholders of the bank. When presenting the report of the Petitions Committee, the chairman (Mr T. L. Hayman) said that the petitioners had a feeling of grievance, in that they were deprived of their shares in the bank without the right of submitting evidence as to the value of those shares. They had been forced by act to give up the shares, and the value had been set by the act.

Mr Hayman said that the shares had been taken even though the then Minister of Finance had declared that the bank was doing its work well. The shareholders had not been given the opportunity of submitting their case to arbitration.

The shares had been purchased at the market rate, and according to the petitioners no account had been taken of their basic value, said Mr Hayman. Had the value been determined on a 20-year average basis, as the British Government had done when acquiring shares in the Bank of England, it was possible that the petitioners could not ask for the review of their circumstances. If value had been assessed on this 20-year basis, it would have been “something like” £3 12s a share, instead of the £2 5s the shareholders had received. Mr Hayman said that the directors of the bank today had lost the advantage and help of shareholder directors. Those who had a direct interest could render valuable assistance, he said. “No Changes in Policy”

Since the private shares had been taken over, there had not been one alteration in policy, nor had there been any change in the relationship between the customers and the bank. It had been stated that the decision to take over the shares of the bank was made to effect an ideological change, when the Socialists wanted to spread socialism right through New Zealand life, he said. The Socialists thought that with the bank socialised the rest would be easy. The decision had been of considerable value, in that it had shown that even with the Government taking over there could be no worthwhile change of policy. Mr Hayman said that the Government would be interested to investigate all possible means to see whether a greater measure of justice could be given those deprived of their share holdings. However, obvious difficulties arose after a seven-year lapse if consideration were to be given to restoring private shares. One difficulty would be to decide to whom those shares were to go. If they were to be offered to the public today, a great many of the former shareholders would not be in a position to buy those shares. Mr Hayman said that the committee’s recommendation that the petition be referred to the Government for consideration was unanimous. Prices for Shares Mr C. H. Chapman (Opposition, Wellington Central), a member of the committee, said that most favourable terms of purchase had been arranged when the Government took over the shares in 1945. Most of the shareholders had received, not £2 ss, but £2 13s 4d a share. They had been offered three prices: £2 5s a share in cash, £2 6s 8d in tax free Government stock, or £2 13s 4d in ordinary New Zealand Government stock. “Those terms at that time were considered favourable, indeed,” he said. Opposition voices: Hear, hear. He said that the Government had paid £10,000,000 lor the assets of the bank, and the result had been a benefit to New Zealand of nearly £500,000 a year. The operation of a Governmentowned trading bank in competition with other banks had had a marked influence in keeping down the overdraft price, he added. Mr Chapman said that, should the Government be so unwise as to take any steps to return to private shareholders assets purchased by the Labour Government, it would be doing so to the detriment of the interests of the people, and he felt that the country would take strong exception. Mr J. Mathison (Opposition, Avon) listed the profits of the bank for the last six years, the figure this year being £416.000. Mr Mathison said that these profits went into the Consolidated Fund, and to that extent the people were better off. The Consolidated Fund had reaped the benefit of several millions, and the £ 10,000,000 cost would be recouped as time went on, unless, of course, the prayer of the petitioners were granted. Shareholders were fortunate to have been offered £2 5s a share, because at one stage till the Government stepped in they had been worthless, he said. Assets today had risen to £127,000,000, and the current accounts had increased every year since 1947. The Bank of New Zealand was one of the largest institutions in the country, he said. It would be disgraceful if the prayer of the petitioners were granted by the Government. The petitioners were Mr Gibbs and Messrs M. O. Barnett, S. Blackley, F. W. Dawson. A. D. Park. S. Paterson, R. M. Watson (all of Wellington), and E. J. Smith (of Dunedin).