BANK NEW SOUTH WALES

Evening Post, Volume CXI, Issue 40, 17 February 1931, Page 12

BANK NEW SOUTH WALES

DIVIDENDS AND EXCHANGE

The resident inspector of the Bank of New South Wales (Mr. 11. C. Addison) has received a cablegram from the general manager of the bank, Sydney, with reference to a cablegram addressed by the Chrietchureh Stock Exchange to the president of the Bank of New South Wales. The cablegram from Sydney above referred to reads as follows: —

Regarding protest payment dividends in Australian currency: Rules of law governing payment of dividends and repayments of deposits are entirely different. Deposits are received, in legal tender, and can only be repaid in legal tender o£ country in which deposits are held. Questions of currencies of other countries and external rates of exchange therefore do not affect either receipt or payment of deposits or interest on deposits. Rules of law with regard to payment of dividends to shareholders are entirely different. Shareholder knowingly buys interest in capital of company. He knows where its main business is conducted, and where its headquarters* are situated. General rule of law affecting dividends is that no one shareholder is entitled to receive from company per unit of his holding any more than any other shareholder. This rule governs position unless any special provision appears in the company's constitution. Owing to marked variations from par o£ Australian and New Zealand rates of exchange on London and each other it wad impossible longer to disregard the exchange position and continue to pay dividends on a par basis as formerly. Bank therefore took counsel's opinion both in London and Australia and hold independent opinions of five learned counsel that bank is under obligation to pay dividend in Australian currency.