The Hastings Standard Published Daily. THURSDAY, JULY 2, 1896. THE PREFERRED SHARES.

Hastings Standard, Issue 57, 2 July 1896, Page 2

The Hastings Standard Published Daily.

THURSDAY, JULY 2, 1896. THE PREFERRED SHARES.

For the cause that lacks assistance, For the wrongs that need resistance, For the future in the distance, And the good that we can do.

It now appears that the banking legislation of last session, which absorbed so much of the time and attention of the House, was defective on a material point. By the Bank of New Zealand and Banking Act, 1895, the bank was empowered to issue to the Crown 150,000 preferred shares of £3 6s 8d in exchange for, and to be paid for by, debentures of the colony of a corresponding nominal amount. By this means the Bank of New Zealand obtained £500,000 of additional capital, on which a fixed cumulative dividend of £3 10s per cent, per annum is payable. The House, however, while fixing the nature of these shares, and the amount of dividend interest payable in respect of them, failed to safeguard them in another direction ; that is to say, while the dividend on the preferred shares is a fixed cumulative sum of per cent., the payment of such dividend as an administrative act of the executive of the bank was not made compulsory, with the result that it- is now contended that the payment of the dividend is contingent on the vote of the shareholders. It was never the intention of Parliament that the payment of dividend on the preferred shares should be subject to the whim of the shareholders, consequently an amending Act this session becomes absolutely necessary to give effect to the desires of Parliament. The omisaoa here noted is an important one,

and emphasises what has been too apparent, that throughout this banking legislation the House has accepted too much on trust, and has done little or nothing to verify the statements of Ministers and others.