FRIDAY, SEPTEMBER 14, 1900. GUARANTEED ASSETS.

Evening Post, Volume LX, Issue 65, 14 September 1900, Page 4

FRIDAY, SEPTEMBER 14, 1900. GUARANTEED ASSETS.

« In the Legislative Council yesterday, the Hon. E. C. J. Steven? again brought under review the liability to which the colony is pledged under the Bank of New Zealand and Banking Act of 1895, in respect of the Bank of New Zealand assets, now under the management of the Assets Realisation Board. The people of this colony are so accustomed to tho practice of drawing bills upon the future, that they are strangely indifferent to the responsibilities incurred by the banking legislation of five years ago. This happy-go-lucky frame of mind is carefully encouraged by the Government which forced that legislation upom a panic-stricken Parliament, but the day of reckoning grows appreciably nearer every year, and the thanks of the community are due to Mr. Stevens for the assiduity he displays in periodically recalling the actual facts to tho public mind. There is ?<, grave danger lest Parliament and people should, from a false sense of security,, allow mat ters to drift, and so make no provision for meeting this great national liability. Last year, it will be remembered, iur. Stevens moved for a select committee to enquire into the administration of the Assets Realisation Board, but the Legis lative Council declined to investigate the working of the Board. This year he asked only for an annual return showing the amount .of the outstanding debentures for which the colony is liable under the Colonial Treasurer's guarantee. The return itself is not of great value since the po&iUon may be learnt each year from the report of the General Manager of the Assets Realisation Board', but it serves the excellent purpose of calling public attention to the heavy liability the colony must soon meet. The debentures have only another three and a half year's currency, and it is high time/to ask what is to be done when that period of time expires. in 1895 the Bank of New Zealand owned several properties which were collectively termed its globo assets. The book value of these properties was £2,731,706, but their estimated value at that date was only £1,879,105. In order to relieve the Bank, these- assets were transferred to a new corporation known as the Assets Realisation Board. Debentures countersigned by the Colonial Treasurer were issued to the Bank to the amount of the book value ol the assets — namely, £2,731,706. In consequence of some matters of account this amount was subsequently reduced to £2,680,000, the actual value of the debentures issued by the Board on the security of assets known not to be worth more than £1,879,105. There was thus an initial estimated deficiency of over £800,000. The debentures were to be met by the net total realised from the globo assets, by a call upon the shareholders of the Bank, and by £50,000 a year to be paid by the Bank to the Board. Any deficiency was to be made up by the Colonial Treasurer, who signed the debentures. In 1904 tho debentures mature, and it is quite evident from the reports of the Board that there will be a large deficit at that date. 'This deficit is the national liability which Mr. Stevens is anxious should not be forgotten. According to this year's report the Board has sold, in whole or in part, properties to the total value of £583,571. The proportion of sales during the past five years to total book value of the properties is 21.4 per cent., and to the 1895 valuation, plus Land Tax valuation, and 10 per cent, for Sundry properties (£1,895,179 in all) 30.79 per cent. It must also be borne in mind that the most saleable properties have already been disposed of. As far as can be seen, the colony will in 1904 have a large sum to pay in some way or another. This is the important point that should nob be lost sight of, and it would be well if the Government began to consider seriously the question of meeting this liability.