THE QUESTION OF THE BANKS.

Evening Star, Issue 9501, 25 September 1894, Page 2

THE QUESTION OF THE BANKS.

We have reasons for adventuring the opinion that it is doubtful whether the Colonial Bank will further entertain the proposals for amalgamation with the Bank of New Zealand. An element of uncertainty still to some extent beclouds the prospect, therefore we speak with caution ; but the mist shows signs of rising, and we can see far enough to feel justified in expressing the opinion above stated. A CORRECTED LETTER, The letter from the Hon. G. M'Lean to the Colonial Treasurer dated the 24th September appears on our fourth page in a somewhat mutilated form, having suffered in transmission by wire. We here append the corrected text of the communication : Dunedin, 24th September, 1894. Sir, —I have the honor to acknowledge receipt of your letter of the 22nd September, and have submitted the contents to my. colleagues here. In reply lam desired to state that the conditions imposed by you make the scheme such as wc could not recommend to our shareholders. Taking the clauses of your letter seriatim—1. We do not object to the permissive character of the proposed legislation. 2. We have not the slightest objection to your appointing representatives to examine the condition of our accounts and assets, and refer you to read our for a share in the Government account. We specially asked the Government to do this before giving us that share. 3. This stipulation is all right, and was fully provided for in the agreement so far as a scrutiny by the other bank was concerned; we have no objection to its application to the suggested further scrutiny. 4. This so vitally affects the interests of our shareholders that we will not under any circumstances agree to propose it to them. It would be an invitation to spread the realisation of the Assets Company over an indefinite period, and would make our shareholders' dividends responsible beyond what can fairly be asked or was ever intended. This bank will have no voice in the management or realisation of the assets. Regarding the Government lieu on the interests of the present shareholders in the Bank of New Zealand we can raise no objection. 5. This does not immediately concern us.

6. The powers possessed by the Government under the scheme submitted, and under clause 2 above—namely, a president (with a power of veto), an auditor, and a preliminary scrutiny of assets and accounts to be made by a Government representative, on whose report the acceptance by the Government of the proposed scheme will depend, must be held to be sufficient. It is obvious that the presence of a nominee of the Government on the board would detrimentally affect the business of the bank. Final clause. —The assent to amalgamation on the part of the Colonial Bank would greatly depend upon the shareholders being represented in the amalgamated institution by men in whom they had confidence. Without this guarantee there would be little prospect of obtaining the necessary consent. The attitude which the directors at the general meeting on Wednesday must take up with regard to the proposed amalgamation will evidently so largely depend upon the answer which we receive to this that I must ask you to reply as definitely as possible on the whole affair not later than noon to-morrow.—l have, etc., G. M'Lkan.