A Financial Crisis Averted

Hawera & Normanby Star, Volume XXVII, Issue 2760, 30 June 1894, Page 2

A Financial Crisis Averted

BANK OF NEW ZEALAND LEGISLA.TION.

A STATE GUARANTEE TO THE BANK OP TWO MILLIONS.

VIRTUAL ESTABLISHMENT OE A STATE BANK.

(BY TELEGRAPH.") t (From Our Parliamentary Correspondent) WELLINGTON, June 29. The Bank of New Zealand Share Guarantee Bill has been circulated. It provides for the further extension of the capital of the bank by the issue of preferential shares, secured on the liability of the bank to ac amount not exceeding two million pounds in .£lO shares, with no further liability; the directors to levy of reserve capital : preferential shares, with dividends, to be guaranteed by the colony ; the Colonial Treasurer to appoint a receiver in case of default of the two million of preferential stock — one million to be at the disposal of the bank, and the remainder to be invested by the Treasurer (or as provided by the Legislature) during the currency of the shares ; no dividend to be paid without the consent, of the Treasurer ; the head office to be removed to Wellington j special auditors to be appointed, with extraordinary powers. ! WELLINGTON, June 80. The passage of the Bank of New Zealand Share Guarantee Bill through both branches of the Legislature tides over a grave crisis in the history of the Bank of New Zealand, and averts a national disaster. The head office of the Bank will be shifted from Auckland to Wellington. The Government are to : loan it two millions, and are to have power to control its management. The Bill, in fact, goes in' the direction of establishing a State Bank. The Treasurer, in moving the second reading, said the Government only took the extreme step provided under the Bill, owing to the urgency of the case, and to prevent a national calamity. To the motion for committal, Mr Geo. Hutchison moved that a joint committee of both Houses be set up immediately to consider them, and report at a later hour; but the Treasurer vehemently opposed this, saying that delay till daylight would mean that the Bill would not be passed, This was not intended as a threat, but because the London directory had cabled the absolute necessity of being in a position immediately to announce that the New Zealand > Government had agreed to guarantee two millions sterling to the Bank. The amendment was negatived by 51 to 8, and the bill quickly went through the remaining stages. The Bank Shareholder? Transfer and the Bank Note Issue Bills passed all stages unopposed. The Council referred the principle of the measure to a select committee, which examined the Premier, Treasurer, and Mr Murray, at one time general manager of the Bank of New Zealand. It was four this morning before the Council dispersed. On the House re-assembling the Premier desired to say that the Parliament of New Zealand, had been equal to the occasion. The colony had been saved from disaster, and what was stated twelve months ago had been maintained, and that was that not a Bank in the colony would be permitted to go under. Mr Geo. Hutchison felt constrained to say that he did not know that the colony was to be congratulated on that day's labor. The bills had been passed solely on a reflection on the people's representatives that an enquiry by a special committee, which had been refused the House, had on the motion of a member of the Government, been granted to the Council. The whole responsibility was for good or evil on the shoulders of the Government. The Premier, amid applause, followed, and said he cheerfully accepted the responsibility. Later. The utility of the strong measure taken by Parliament to assure tne credit of the Bank of JNew Zealand is evidenced this morning by the utter absence of public alarm and anything which could possibly be termed a run. To-day being Government pay-day the tellers were somewhat busy, but there was little more than the usual banking business. A few timorous individuals, of sourse, anxiously converted their credit balances into gold. ____ _____