The Dominion. FRIDAY, TONE 27, 1913. AN UNFORTUNATE INCIDENT.

Dominion, Volume 6, Issue 1787, 27 June 1913, Page 6

The Dominion. FRIDAY, TONE 27, 1913. AN UNFORTUNATE INCIDENT.

The proceedings at yesterday's meeting of the shareholders of the Bank of New Zealand were marred by what seems to us to be an unfortunate misunderstanding, for which the chairman was mainly responsible. We mentioned yesterday that certain resolutions of great importance and materially affecting the future of the bank were to be brought forward by Mr. 0. P. Skerrett. These resolutions, which we publish in full , in this issue, are mainly in the interests of the shareholders, and provide for the transference of the dominant control of the bank's affairs from tho State to the shareholders. At tho present time, under the Banking Acts of 1894 and 1898, the State not only has the power to nominate four out of tho six members of the Board of Directors, but it also appoints a bank auditor, possessed of very considerable powers. When the chairman yesterday refused to allow the resolutions to be brought before the meeting for consideration, it is not surprising in the circumstances that he aroused the antagonism of the shareholders present and called forth a strong protest from Mr. Skerrett against what had every appearance of a very high-handed course of action. Mb. Beauchamp probably was correct in the stand which he took, but his method of procedure was singularly tactless, and he quite failed to do justice to the reasons governing his action. It was a mistake on his part not to take the meeting more fully into his confidence. Had he explained at the outset that ho was acting under the advice of the bank's solicitors, and had the very definitely-expressed views of the solicitors been read to the shareholders present, it would have been seen that no other course was open to him than to rule the resolutions out of order. He might have gone still fur- ! ther and suggested to tho shareholders that he would leave the chair and that they could then meet and discuss the resolutions and arrive at such conclusions as they might think desirable, and such conclusions in due course could have been forwarded both to the bank's directors and to tho Government. Ab it is, his attitude not only

led to friction at the meeting, but is likely to create a wrong impression and make it appear that the interests of the State and those of the shareholders are necessarily antagonistic. This is not the case; there may be disagreement as to the details of the proposed readjustment of tho bank's affairs, but it is a bad beginning to tho negotiations preliminary to such readjustment to separate tho parties into actively hostile camps. Probably the chairman of the bank, in adopting the attitude he did, took it for granted that because his colleagues on tho board who represent the shareholders knew of the legal opinion on the subject of the resolutions, tho rest of the shareholders present were also acquainted with at least the effect of it. But this does not altogether cxcuse what might be regarded as a somewhat autocratic exercise of authority. As to tho actual terms of the resolutions, it will be seen that the shareholders wish to displace the Stato from the position which it has occupied for the past 19 years in the control of the bank's affairs, and to do so on terms highly advantageous to tho existing holders of ordinary shares. It is plain that the action of tho State in coming to" the rescue of, the bank and saving it from bankruptcy belongs to a past which is too dim a memory to appeal at all powerfully to any lingering sense of gratitude which may exist amongst shareholders. The bankfs now solidly on its feet, and tho interest which the Government possesses in it is, in the eyes of shareholders, merely an incubus to be got rid of. The matter, however, is not one solely for tho shareholders to decide; nor are their interests, strong as they may be, the only interests'to be considered. As we pointed out yesterday, it is tho duty of the Government to see that the interests of fho public are safeguarded, and by the public we mean, not as Mr. Martin Kennedy puts it, merely the depositor's with the bank, but the people generally, who, through the Government of the day, came to tho rescue of the bank and bore the brunt of placing it on its feet again. Today's meeting will no doubt disclose more fully the views of shareholders, and may possibly indicate a more reasonable spirit than is discernible in the resolutions to bo submitted for their consideration. ']