Evening Post. THURSDAY, AUGUST 29, 1895. THE BANK CRISIS.

Evening Post, Volume L, Issue 52, 29 August 1895, Page 2

Evening Post. THURSDAY, AUGUST 29, 1895. THE BANK CRISIS.

Imhediatilt after the Bank of New Zen- j land Guarantee Aot was passed lost year— rnshed through in a single night— we pointed ont in the moat olear and preoise manner the extent to which it committed the oolony. Acoepting the assnranoeß of Ministers in good faith as to the groundß whioh rendered such a measure necessary, we supported and even applauded their action in introducing it, but we impressed upon the publio the faot that in giving the assistance it did to the Bank, and praotioally taking the control of the affairs of the Bank out of the hands of the shareholders, the colony oommitted itself irretrievably to the foil measure of its credit to render the Bank any farther assistance which might be fonnd neoessary. We also expressed in definite form our conviction that auoh further assistance would be required, and that inßfcead of the tiro millions then gnaranteed being) an end of the matter, it would probably require five millions to restore the Bank to a sound condition. These opinions were ridiculed and denounced in the Ministerial press and upon the platform, and politioal capital was made out of the small cost at whioh what was spoken of as " a great national oalamity " had been averted. Even in London a few months apo the Colonial Treasurer claimed credit on this soore, and trumpeted about the sonnd and strong position in wbioh the action of the Government last session had placed the Bank of New Zealand. What took plaoe yesterday forms a strange commentary on Mr. Wabd's remarks, while it affords a complete vindication of the opinions we have from the first expressed, and of the predictions we ventured upon. The Joint Committee whioh reported yesterday has done its work well np to a certain point. It is evident from a perusal of its minutes that no Party feeling influenced its members. The division lists prove this beyond possibility of a doubt. Aided by the present directors and officers of the Bank, to whose candour and honeßty a tribute of praise is due, the Committee has been enabled to thoroughly unveil the position of the Bank. The Committee's report, however, is not couched in very intelligible language. It is rather difficult for the uninitiated to gather from it what the preoise position 18, or what is the nature and extant of the assistance which the Committee desires the Legislature to extend to the Bank. Nor does Mr. Wabd's muoh-talked-of speeoh,asto whioh the House spent hours in disonssing whether it should be made last night or to-day, quite make matters plain, bo that he who runs may read. We will endeavour to olear the situation up a little, so that the general public may understand the case. In the first plaoe, then, the Bank of New Zealand standß in the position of having lost all its oapit»l through reckless trading in the long past, and illegitimate as well aB unfortunate land transactions. Not a vestige remains of the 4900,000 of ordinary paid-up capital. More than this, the onethird of the reserve liability of £10 per share, whioh w»s called np in November last, the ' final instalment not being even yet due, has followed the -ordinary capital and disappeared. The oall should have realised 4500,000. It is estimated to bring in 4150,000. Thus the shareholders have no longer any oapital interest in the Bank, and the 41,350,000 of their money has gone beyond recall. It wonld be well for them if this were all, but they are Btill responsible for 46 13s 4d per share, and half of this it is now proposed to oall up. As the first oall only" realised, or is likely only to realise, 4450,000 out of 4500,000, this second oall is not likely to bring in more than 4400,000, although we observe that the Committee has not made any allowance for the well-known faot that many shareholders who have struggled to meet the first oall, believing it would be the last, will be utterly unable to meet the seoond call. Even the promise of a preferential dividend up to 5 per cent., in the event of oertain problematical profits being realised, will not extract the money from them. Blood cannot be got out of a stone. The shareholders' oapital so far paid or called having disappeared, it is seen that the capital on which the Bank is trading is oomposed entirely of what is known as the A stook— the two millions raised on the guarantee *of the oolony under last year's Aot. One million of this has during the past year involved a loss instead of a profit to the Bank, as it has failed to earn the interest paid, this being due to the provision requiring it to be kept in liquid investment*. It is now proposed to repeal this provision, and to abandon what was praotioally the Ken of tba oolony over this seoond million. The Bank should, therefore, have two millions of oapital guaranteed by the oolony to work on. 'It Eas, however, nothing of the kind. Tinder its several aliatet as the New Zealand Estates Company and Anokland Agricultural Company — the Committee finds they are both really the Bank— losses and liabilities beyond

the capital of the Bank have been inonrred, and the legitimate Hank earnings. are insufficient to meet the drain caused by these. The oapital of £1, 350,000 having been disposed of by the prooess of " writing off," it is now proposed to oreate £1,000,000 of new preferential share oapital, for half of whioh the oolony is to subscribe, paying for tho shares in Si per cent, debentures. The other half is to be supplied by tbe oall already referred to, whioh, however, will certainly not realise .£500,000. In addition to this a Board is to be formed to take over the New Zealand Estates Company's assets of land, stook, and implements in the oolony. These in March last were valued at £1,879,000. Perhapß they may be worth £1,500,000 now. In payment the Board is to issuo bonds for £2,734,000, not guaranteed by the colony except as regards any deficiency whioh may exist between that amount and the sum ultimately realised by the assets. Practically all this means that the oolony is rendering itself liable for £3,200,000 in addition to the two millions already guaranteed. There are provisions for payment of interest ont of profits, power to shareholders topurchose the shares held by Government, and other similar matters, with which we need not embarrass consideration of the main subject now, because however well they look on paper, they can scarcely, under the oircamstances, be regarded as of mnoh practiI cal value. There are also powers to purchase another Bank's business, although how it is to be paid for is not explained, and there are calculations of great profits to be made by the Bank nnder the new polioy, whioh aro about as reliable as the golden visions of Alnaaohar. With castles in the air of this kind we need not deal. Tho broad faot of the proposals is that the oolony wiil be liable for some £5,200,000 on acoonnt of the Bank, while the shareholders' interest will be represented by whatever proportion of the second call of £500,000 they may be able to contribute. The total of £5,200,000 will be subject to reduotion by whatever amount is ultimately realised from the Estate Company's assots whioh are taken over. The disproportion between the interest the oolony will have ia the Bank and that of the shareholders is so great, and the making of this oall demanding more good money to be thrown after bad will press so ruinously on the shareholders, of whom there are 1050 in the colony, that the question naturally arises whether it would not be preferable to eliminate the shareholders altogether from the proprietary of the Bonk, leaving the oolony to assume the whole undivided responsibility for the future of the Bank, making it, in faot, purely a State Bank. We do not like the idea of a State Bank, bnt it wonld probably be better to have a State Bank outright than a Bank in whioh the State must be the controlling power while the pretenoe of its being a Joint Stook Bank is maintained. We believe tbe shareholders wonld hail relief from further liability as an inestimable boon. They would, of oouree, lose everything, but they would know the worst. 1 here is also another alternative worthy of serious consideration, and it is this : Whether it would not be a wiser oourse to insist on the Bank going at once into liquidation. Of course a terrible picture of the commercial panic and desolation which wonld result is drawn, bnt might not this be averted by the nse of the oredit of the oolony in a different direotion from that proposed P There would be no panic, no desolation, scarcely any interruption of business, if tbe oolony formally gave its guarantee for all the existing liabilities of the Bank of New Zealand, and made suitable arrangements with other institutions by whioh all of these wonld be met at maturity. This would, no doubt, entail a heavy direot loss on tho oolony; bnt we are by no means sure that the first loss would not be the best. The oolony is now praotioally responsible for all the Bank's liabilities, and we very muoh fear tbat these are likely, under the proposed soheme, to increase rather than to decrease. It might be better to wind np and faoo the loss, whatever it might amount to. Had suoh a ooureo been boldly adopted last year the position to-day would have been more satisfactory than it is. One featnre in the new proposals we do not at all like, and that is the proposal to sever the colony's connection with the Bank of England by transferring the business now done by that institution to the Bank of New Zealand. The connection with the Bank of England has boon most valuable to the colony, and wo remember how great was the rejoicing when it undertook tho business. To remove this now will, we fear, prejudicially affect the colony's oredit in London. Anothar objeotion to the proposed soheme is that it has no gnarantee of finality about it. Many of the Estates Company'sassotsintheoolony -basinessconoerns — and all its assets outside the colony, are still left unprovided for. The expectatation that they will be realised within two years may not be fulfilled. Although severely " written down," they will certainly remain a drag on the Bank for a oonsiderable period, and may so impoverish it as to neoeesitate a farther appeal for assistance from the colony, and also entail another call on tbe unfortunate shareholders, at no distant date. All these points are matters for the grave consideration of tho Ministry and of Parliament. The Committee has no donbt done good work, and the oonntry is indebted to it. Tho responsibility of dealing effectively with tbe matter now rests upon the Legislature, whioh must look to the Ministry for guidance, and for whatever is done the oonntry will hold the Ministry responsible. That the Bank must be supported and booked np so that no loss shall be entailed upon its customers is a faot now bo fully recognised that we need not further insist uponit. There is room, however, for muoh difference of opinion as to the bestmeanaof doing this. Itßbould not be too readily assumed that the Committee's report indicates the only or the best means of attaining the desired end In conclusion, we may ray that wo entirely approve of the issue of the proclamation making tbe Bank of New Zealand note^ a legal tender until the crisis is over, and publio confidence in the Bank is restored by legislation affording BUbstantial help. Hod this Proclamation not been issued there would probably have been a panio rnsh on the Bank to-day, aud help from the Legislature mfcht'have been too late. We do not think that the liability of the colony is in any appreciable degree increased by its having guaranteed the note issue for a few days. On the fourth page we present to our readers a summary of yesterday's disons. suras in Parliament in referenae to the Bank of New Zealand, and also particulars of the deputation of City Sohool Committees to the Minister of Education as to religious instruction in schools. The Proclamation issued by speoial Gazette lust night provides " that the notes payable on demand by the Bank of New Zealand, established nnder the New Zealand Bank Aot, 1861, and now or hereafter to be issued, circulated, or re-issued within the oolony of New Zealand nnder any lawful authority in that behalf, shall, during the period oommenoing on the 29 th day of August now instant, and continuing until the 2nd day of September next ensuing, be everywhere within the said colouy a good and legal tender of money to the amount therein expressed to be payable." The ordinary general meeting of the shareholders of the Bank of New Zealand is to be held in the Chamber of Commerce at 3 o'olook to-morrow afternoon. The experts appointed to oonsider the designs for the new series of postage and revenue stamps have completed their labours, and have forwarded to the Post-master-General a report embodying their recommendations , Yesterday was observed as Arbor Day at Potone by the Committte and scholars Of tbe State Sohool. About 100 ornamental shrubs and trees 'were planted in the sohool grounds. The Chief Justice yesterday afternoon disposed of the aotion brought by .1. ThompBon, solicitor, against Grace Harper and T. M. Wilfordfor the exeoution of a mortgage, and payment of interest and charges. Evidence was given by the defendants, Mrs. Harper and T. M. Wilford, E. M'Cartney. G. A. Tattles ana B - G - JelUooe. His Honour gave judgment for the defendants, on the ground that the plaintiff hod failed to show that Mr. Wilford had authority to enter into tho agreement upon which the plaintiff relied. Costs were allowed the defendant Harper on the lowest scale, with one extra day, but no costs were allowed the defendant Wilford. The foHowiug further donations to the Unemplo>od Uelief Fund are acknowledged — W J*. Haselden, £1 Is ; C Smith, Cubastreet, £2 2s : O. Smith's employes, £2 7s j J. Gannaway, £2 ; R. Duignan, £1 ; W.G., £2 The evidenoe given at the enquiry held at Marton into the bona fidtt of members of the Marton No. 1 and Ho. 2 Speoial Settlement Associations was a striking commentary upon the Minister of Lands' polioy of giving away the pick of the land to men on tbe payment -of a paltry 10s for 200 acres. Speculation was rampant almost immediately after the ballot, an offioer of the Association not only acting as the medium for these transactions, bnt soiling the seotions of two members of his family for £75 eaoh, although they had never seen the land The prices given for the unimproved Emotions varied from v£so to £100, while in ore case £170 was offered. To evade the regulations requiring the consent of the Board to transfers, mortgages were prepared, treating the pnrohase money merely as an advance, but the point was overlooked that tbe consent of the. Board was neoessary to give these mortgages any effeo(. The enquiry has not yet conolnded. There was no criminal business at the Magistrate's Court this mornincr. Sitting in his oivil jurisdiction, the Stipendiary Magistrate entered up judgment for the. plaintiffs by default in the following oases : — Butterwortb Bros. v. P. Hilman, £49 4s ; Wellington Loan Co. v. M. J. Gammon, £31 Is 3d ; Melrose Borough Counoil v. Catherine Mahonev, £3 17b 8d; E. G. Jeiliooe v. Lady Wasteneys, £96 14s 6d; James Sbarpe v. F. Millar and Mrs. Millar, £40 Bs' 9d ; Mm. B. Harrington v. A. Owen,' £4 ss ; Commercial Agenoy (Limited) v. W. J. Craig, £4 16a 3d; Veiton ft Allan v. A. M'Caskill, £5 16s; same v. A. Cam. eron, £7 10s 9d ; same v. R. Hendle, £2 15s Id ; Laery &> Co. v. J. W. Williamson, £8 8a 7d ; same v. V. Marshall, £7 Is 3d : Wellington Gas Co. v. F. Beetham, £2 6s 3d : same v. J. Wallace, £5 3s Bd. Judgment summonses:— Wm. Wright v. K. M'Caull, defendant ordered to pay £14 8s 6d by instalments of 10s weekly; Yeitoh ft Allan v. T. Fitzsimmons, defendant ordered to pay £7 8s 2d forthwith, or in default undergo 21 days' imprisonment. In the defended oase of Thomas Lyons v. Constance Nioholls, a olaim of £3 145, a nonsuit was entered up, Mr. Wilford appeared for the plaintiff and Mr. Tonng for the defendant. In the oase of Mrs. A, Nattras v. H. Tobin, junr , judifment was given for the amount olaimed (£9 45), -irith 10s oo»t», A publio meeting of farmers and others interested in the fruit and vegetable trade is oonvened by the Anti-Chinese League to be held in the Oddfellows' Hall, Lower Hutt, on Saturday evening. Brakes will leave town at 6.30 p.m.

An action was oommenood (his morning before His Honour the Chief Justioa by Robert Spnrway, a oontraotor, to recover from Henry Sullivan, of Wellington, retired publioan, the sum of £433 6s 6d, being balanoe of oontraot money for the ereotion of a house for Sullivan. The claimanc also asks-for a deoresdireating Thomas Stoddart Lambert, the arohiteot, to issue a certificate of the due completion of the house. The defence alleges that the work has not been exeouted in a proper manner in accordance 'with the speoifioations. Messrs. Treodwell and Bnnny appear for the plaintiff and Mr. Chapman for the defendant. The case will not iinißh to-day. Nominations were rooeived to-day for three vacancies in the Petone Borough Counoil as followB:-South Ward-W. H. Ballinger, nominated by H. Findlay and E. Jackson; J. Austin,'by C. Webb and J. Piper. North-east Ward—A. Marsden, nominated by W. Parrant and D. Dowsett; R. Mothes, by J, Leadbetter and J. Donovan. West'Ward—H.. Findlay, nominated by E. H. CoUett and J. F. Fleet; C. Lusty, by J. B. Kelly "and T. Lnnny. Mr. Findlav's nomination for* the West Ward being informal, Mr. Lusty was deolared elected unopposed. The eleotions for the remaining coata" \till take place on the 12th September. "" It was stated at tho meeting of the AntiChinofe League last night by a farmer from tho Hutt that fully two-thirds of the vegetabloa sold in the oity by Chinamen were grown by Europaans in the suburbs. The Tongariro, which arrived from London this morning, brought ont to the order of Mr. A. U. White, of Auokland, some valuable poultry, consisting of a trio of Red Game fowls and a Dorking hen. A Dorking rooster was also shipped, bnt it died on the vbyage. Owing to the faot that the birds were on board an unusually long time—the steamer having had to put baok foe repairs—all are in deep moult. Arohbißhop Redwood will open the Thorndon Carnival at 3 o'olook on Saturday afternoon. The Deooration Committee has transformed the Drillshed into quite a fairy speotaole. Speoial precautions will be taken at Newtown Park on Saturday to prevent persons from scaling the fenoes to evade payment. Any person found so doing will be proseouted. Tbis has been found necessary in view of last Saturday's occurrences. A strong posse of police will be on the lookout. Mr. G. C. W. Morris, of the Bank of New Zealand, who for the past two yearß has been Hon. Treasurer of the New Zealand Rugby Union, has been transferred to the Auokland office, whither he goes to-morrow afternoon. Mr. G. H. Scales waited upon the Land Board this morning in reference to tho transfer of seotion 110, Block 1., Mangaone (Hutt Spooial Settlement Association), from Joseph Eoss to Constable M'Kay, of Nelson, formerly stationed at the Hutt. It was deaided by the Board to grant the transfer, provided that the conditions aro complied with, and that Messrs Parrish Bros., who oleared the land, sign a declaration that they are not using the section. The Commissioner dissented, asserting that the law was being oontinually broken. We have reoeived the 35th annual report of the Amalgamated Society of Carpenters and Joiners, in the form of a bulky book, giving minutely the statistics of eaoh branoh. At the end of last year the society numbered 43,011 members, and its assets were valued at £80,989. During the year no less than £96,013 was paid in benefits to members. •Mr. A. M. Edwin, son of Captain Edwin, is now fifth offioer of the Tongariro, and Dr. W. Mattin is medioal officer. As an outcome of the recent aooident to the vessel's boiler, the seoond, third, and fourth engineers were retired, and their places have feeen filled by Messrs. J. Forrester, J, Mew, and C. H. Lee. Another performance was given by the Alhambra Gaiety Company last night at the Criterion Theatre to an appreciative audience In particular Messrs. Kerr and Kingßley'a bicycle .performances attraoted attention. The company again appears to-night. A oompany of Chinese residents of the oity has been formed to establish and work a large steam laundry at Thorndou. The Master of the Ohiro Benevolent Homo desires to thank Mr. Elkina, of Masterton, for ohoioe outtings, also beans for sowing. The third annual meeting of the Wellington Art Club was hold in tbe Art Gallery lost evening, the President (Mr. James Nairn) being: in tbe chair. The report—a prScit of whioh was published by us yesterday —was adopted, as was also the balancesheet, whioh was of a satisfactory oharaoter. The election of officers resulted as follows :— President, Mr. James Nairn (re-eleoted); Vice President, Dr. Fell (re-eleoted) j Hon. Secretary and Treasurer, Mr. M. C. Smith; Counoil, Messrs. H. H. Seed, H. J. W. Parsons, W. L. Palmer (re-eleoted), and G. E. Butler. Mr. John Baillio was given a vote of thanks for his services as Treasnrer and Secretary during the past three years. An admirable lecture on " Thomas Carlyle " was delivered at the Forward Movement Hall last night by Mr. T. W. Rowe, M.A., Librarian of the Wellington Public Library, in qonneotion with ihe Forward Movement Literary Sooiety. Mr. A. R. Atkinson presided, and there wa3 a large audience. The lecturer gave an interesting biographical sketoh, and then analysed and oritioised Carlyle's literary style and prinoipal teachings at some length. At the close of the meeting a vote of thanks was, on the motion of Mr. J. H. Holliwoll, seconded by Mr. A. Monro, given to the lecturer. Tho fifth of Mr. Maughan Burnett's seoond series of conoerts, held in the Art Gallery yesterday afternoon, was well attended, the audience inoluding His Excellency the Governor and Lady Glasgow. Beethoven's "Moonlight Sonata," admirably played by Mr. Bamett, a romanoe by the samo master interpreted by Mr. Alfred Hill, and a Sohnbert melody, " Ungeduld," sung by Madame Eveleen Carlton, comprised the first part of the programme. The second part was more varied, opening with a quartet of dainty items—two by Jensen and two from Mr. Barnett's own pen ("Ohansonsans Paroles " and " The Horseman ")—all tastefully played and loudly applauded. Madame Carlton followed with a suite consisting of two little BODgg, " Lullaby " and " My.Lady," by Mr. Uarnett, and " The Years at the Spring" (Hartog). She repeated " Lullaby," in response to the general wish of the audienoe. Tbe conoert concluded with the performance of a fine " Sonatine," composed by Mr. Hill and played by him with Mr. Barnott. The second of the series of monthly " sooiaU " in connection with the Druids' Lodges of the oity-took place at Thomas' Hall last night. Fully 100 couples were present. The Druids' Grand Maroh, led off by Bros. Whale and Riteon, was a featnre of the proceedings. Bros. W. A. Ritson and Sibiro were M.C.'s, and Messrs. Keioher (piano) and Plowman "(cornet) supplied exoellont music ' Refreshments were dispensed under the supervision of Miss Shilling, Mrs. Ritson, and Bro. Mosoley. Bros. W. A. Ritson and I. Whale were Chairman and Secretary respectively of the Management Committee. The Committee appointed to form a lodge of female Oddfellows under the Manchester Unity met last night. Bro. G. E. Godber, P.P.G.M., was eleoted Chairman, and Bro. Hayhow Seoretary. The meeting decided to enrol names, and all those wishing to join are asked to give their names to the Committee. It was deoided to oall the new lodge " The Loyal Sister Wallis Lodge." A meeting will be called as soon as the rules arrive from Home, whioh should be very soon. Votes of thanks were passed to Bros. Jordan, Ayery, Maxton, and Perrin, for the information they gtire as to sister lodgos. The Petone Al Minstrels tender a benefit performance to the family of Mr R. Oliver (now in the Wellington Hospital) in the Oddfellows' Hall, Petone, tomorrow evening. Pringle ask us to draw attention to large sliipmeats of norelties jmt.opouing per Gothic and Tongariro. Many of the Uues per the latter steamer ore beinff waited for by numerous cub. tomers, who will be glad to hear of their arrival. John Walker, florist ana ponltry-dealer, Cubastreet, odvertiiesiu another column prize poultry, pigeons, and canaries, at moderate prices. This week's Christohurch Press contains a -portrait of the arerfcowa football team, rlens of the Taupo district lately disturbed by earthquakes, ' and other illustrations. To-morrow, at 2.30 p.m., Barconrt and Co. will ■ell-by auction, nt their rooms, Puinmii-atreet, freehold properties, consisting of a neat fourroomed cottage in Douald M'tean-street, New. town, with usual outbuildings and oonveuiences «nd a good mrden; also a seotion meurarinK 80ft il^?il^?. lso/*' "I th three-roomed eott.io, situated at TaltvjUe, a few minutes- walk from Aro-street. Thi» latter section and oottago will be offered at the upset price of £120. ' W. P. SUortt will hold an unreaerred sale of household Inrniture and effects to-morrow, at the residence of Mr. TV. H. Hill, 13, Ellice-atroet. Laery and Co. (Limited) will seU to-morrow, fruit. * frSt^Aor 1 F *UI "nl MU furrow, furVitSe,*^ 8 *"* °°- *m ieU