BANK OF NEW ZEALAND

Gisborne Herald, Volume LXXII, Issue 21753, 30 June 1945, Page 6

BANK OF NEW ZEALAND

Sir,—lt is remarkable that people who do not know that they don’t know will so often rush in to ventilate their views upon subjects which are entirely foreign to their intelligence. It is so obvious that ’’J.P.M,” does not understand the matter which he discusses in your columns that it' 1 -Would seem idle to correct him, except that silence may induce others of the same mental calibre to hecept his views. ' It would save milch . explanation if "J.P.M.” would take the last annual balance sheet of the Bank of New Zealand to some accountant to enlighten him on the £70.000,000 assets and the inference which he apparently deduces from this. To add to his enlightenment, I would point out that in 1894 the bank’s main business had been financing the‘farmers throughout the Country, and perhaps especially in this district to fell the bush and develop their country. Wool was then 3d per lb. and under in London. Freezing was only beginning to be thought of and the farmers were compelled to lean heavily upon the bank. The strain was too mucii for the latter, but there was no reflection on its management. To save the bank from closing its doors, which in turn meant that al! overdrafts would be called up, 70 per cent at least of the farmers ruined and acute unemployment to the point of gaunt starvation fall upon the workers, Parliament sat all night to pass legislation by which funds Were found to ensure the safety of the bank and ail those dependent upon it. For this assistance the State took preference shares bearing a fixed rate of interest. These are therefore really tantamount to a mortgage upon the assets and business of the bank, which is owned by the ordinary shareholders. The Slate hs a preference shareholder is therefore no more entitled to anything more than the amount of these preferention shares,

plus accrued interest, than an ordinary mortgagee of a property, who may have assisted the owner to improve his- place and bring it to production. The owners of the bank (the ordinary shareholders) are as much entitled to the bank and all its nett profits as any business' man or farmer, who at some time has obtained financial assistance when in difficulties, is entitled to the full proceeds of his energies and management. of his property. I am not a shareholder of the bank and in fact do no business with it, but I dislike injustice and' to see a- class: of -people arising, desiring to satisfy their greed.—PßO PATRIA.