THE BANKS.

Evening Star, Issue 9831, 21 October 1895, Page 2

THE BANKS.

[From Our Parliamentary Reporter.]

WELLINGTON. October 21

The banking agreement continues to form the main topic of conversation in commercial and legislative circles. While Sir Robert Stout’s opinion, _ that the agreement is ultra vires, as it provides for taking over doubtful accounts, contrary to the provisions of the Act passed this session, has been largely shared in, I leam that this very point was submitted by the negotiators before the agreement was signed to a number of high legal authorities, and they advised that what was proposed to be done was perfectly legal. This doubtful business is not taken over absolutely by purchasing the bank, and may be considered to be in the position of being wound up. As to which bank is to reap the most advantage from the agreement, public opinion seems to be that the Bank of New Zealand is getting the best of the deal. The directors of the selling bank admit that the Bank of New Zealand Board drove as hard a bargain as possible, and it is said that but for the friendly attitude of Mr Watson, who had a natural bias in favor of the Colonial Bank, in which service he formerly was as inspector, an agreement would not have been arrived at.

Sympathy is expressed on all sides for those Colonial Bank servants who must inevitably be dismissed under the new arrangement. Their number is set down at sixty, but this may be an over-estimate, as several hands will be sent to London about the end of the year to take charge of the Home branch of the Bank of New Zealand. The amount which the Colonial shareholders will ultimately receive for their shares leads to a considerable difference of opinion. The cash payable is said to be equivalent to 13s a share. Those who take a sanguine view say that the total amount ultimately received by shareholders will be from 30s to 355. It is unnecessary to give the estimates from the standpoint of the pessimists, who express the opinion that it is not improbable that the Colonial’s reserve liability may be called on. The cash payment by the purchasing bank about squares with the Colonial’s premises as stated in the last balance-sheet (£125,000 odd) and its stationery (some £9,000 odd). Rumor has it that the handsome building in Princes street, the headquarters of the Colonial Bank, may be utilised for Government departmental purposes. Vigorous efforts are to be made to have the agreement printed for the information of members, but, like the adverse motion which is sure to be tabled, this move will be unsuccessful.

I hear that Sir Maurice O’Rorke holds the opinion that whether or not an adverse motion is proposed the agreement must lay on the table the full ten days before it can legally be considered by Parliament. A meeting of the Colonial Bank’s shareholders to consider the agreement has been called for the Bth prox., which will give those shareholders who may have given proxies before the terms of the sale were known an opportunity of withdrawing the same should they so desire. ■ I have it on the beat authority—the Board of the purchasing bank—-that they intend giving shareholders a free hand, and that the meeting for the ratification of the sale will not be held till ample time is afforded for full consideration as to the effect of the proposals.