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BANK OF NEW ZEALAND.

THE TWENTY-FIRST ANNIVERSARY. Ox Monday next the Bank of New Zealand will attaiu its majority, that date being the twenty-first anniversary of the opening of the Bank, and the day will be held as a special holiday at the various offices of the B:mk throughout the colony. As the growth of the institution has been steady aud uninterrupted, from infancy upwards, ever keeping apace with the progress and resources of the colony, it may not be uninteresting at this particular juncture to give a sketch of its history— which is no.v inseparably identified with that of the colony—as well as a brief reference to its predecessor, the New Zealand Banking Company, to illustrate the vast strides the colony had made from IS4O, when the New Zealand Banking Company was established, to 1801, when the Bank of New* Zealand was founded, and from that period to the present time.

Tim New Zealand Banking Company (of which Mr. Alex. Kennedy was manager), was established in 1540, at Kororareka. Its tjtal capital was about £7,000 ; its pro* prietary was not numerous, one-half of its shares being held in tSyduey, and the other half by residents of the Bay of Islands. For several years it transacted the exchanges, receive.! the deposits, and discounted the

4 *p iper" ot the young commuuity. On the removal of the seat of Government to Auckland a brauch was opened in Auckland, and an attempt, unhappily ineffectual, was made to transfer the principal office to Auckland. The failure of the attempt decided the fate of the enterprise, and after a struggle it succumheJ. The liabilities of the Bank to the public were, however, scrupulously paid, and its a/lairs wound up.

For tnrce years or more after this New Zealand was without any banking establishment, tho business of discounting and of exchange being conducted by private individuals, when the Lnion Hank of Australia stepped in, and for years had a monopoly of the banking business. The idea of having a local and colonial Bank, was, however, never abandoned, and in duo season tho time and the opportunity came.

Subsequently the Oriental Banking Corporation cutured the field, and opened an agency in Auckland, under the managership or Mr. Oliver, bus wueu the Taranaki war of ISfiO took place, itsforeignproprietary,having no substantial interest in the future welfare of the colony, took alarm at the commercial stagnation which ensued, curtly announced that " it could employ its capital more profitably elsewhere," peremptorily closed its agencies with scant notice, leaving its customers, some of whom had left the Union, to make such terms as best they might with the Hank of New South Wales, which, by arrangement with the Oriental Bank, took up tiie grouud thus vacated, Mr. D. L. Murdoch (now General Mauager of the Bank of .New Zealand) being appointed inspector for New Zealand, and Mr. K. Larkworthy (now managing director, Loudon Board of the Bank oi New Zealand) as Auckland managei. The foreign directorate of the Uniou Dank of Australia was at this time apprehensive of the commercial future of tiie colony, and orders had been issued to tighten the sciew aud decline all " new paper," when the Kuglish mail brought the tidings that Governor Browne had been recalled, and that the relieving Governor, Sir George Grey, would try atre&h a policy of pacification aud peace. It was at this juncture, as we gather from the newspapers of tne period, that a few far-seeing colonists, who had faith in the colon}' and its future, determiued to found a colonial Bank, which should be managed by the colonists in the interests of the colony, aud were prepared to stake, in the first instance, a quarter of a million sterling upon the issue. To appreciate the full import and gravity of sucn a resolve, aud ot such an undertaking, it must be remembered that civil war had been desolating an old and fertile province, closing with anarme I truce, and that, on the extreme southern frontier of Auckland, the settlers were falling back on the city, while Governor Browne talked about " holding the line of the Tamaki." It was at such a crisis, while war was imminent, and the old Taranaki blood feud threatened to break » ut afresh in our own provincial boundarie — while a rich and prosperous Banking Corp< .ation pusillanimously withdrew from the colon}* —that the first act of our merchants and settlers was to establish a Banking Company to foster trade aud commerce in a way that could not be expected, in those days, from an Kuglish or Australian proprietary, having complicating interests to guard and develope.

The rcasous for taking such a step were potent and patent enough. The newspapers of the period argued tnat the foreign institutions at that time invested, little of their capital iu the country — the total amount rauging from £160,000 to £1150,000 —but did their banking business principally on the funds of the depositors— amounting tu over £600,000. The oolouy, it was reckoned at that time, was paying £70,000 per annum as discount and exchange to the two foreign Banks, all of which was withdrawn from the circulating medium and spent elsewhere. It was also held that the mercantile classes of the colony would be, indirectly, £17,500 per annum richer than they were if their circulating capital were not thus contracted and their discounts conducted by a Bank the interest of whose proprietary was to retain the capital in tiie country and develope its latent resources, while the Bauk itself would yield a handsome profit to its shareholders. It was argued, from what had occurred, that no foreign Bank would study the interests of New Zealand, the New Zealand branches being of necessity made to fsei the effects of financial pressure iu other eo.'onies, and accommodation given or rejected, not according to the requirements of the Bank's customers in New Zealand, but measured by the Bank's engagements acd necessities elsewhere. What the foreign Bauki had done for so many years with the funds of the colonists the latter now proposed to do for themselves by local effort and opportunity.

Toward:] the en 1 of June, 1 SGI, the prospectus of the new enterprise—the Bank of New Zealand—was issued, the nominal capital being fixed at £500,000, iu shares of £10 each, to be called up as required, and an Act of Incorporation applied for, introduced and passed in the General Assembly, then in session at Auckland. Ten thousand shares were reserved for Loudon, where a local Board of Directors was to be appointed at an early date. On the share-list being opened the result was most gratifying ; ten thousand shares were taken up in Auckland, representing ilOO.OOO—the applicants ranging from the thrifty artisan to the Cabinet Minister, fn Sydney the whole of the shares allotted were taken up. Mr. Jame« Williamson, the first and the present President, proceeded South as a representative to enlist the support of the merchant! at the various centres of population in the project. He was accompanied by Captain Daldy, who went as the representative of the sister institution—the New Zealand Insurance Company —to promnto and extend its interests. Their several missions were highly successful, in Wellington and Christchurch especially the piojcct of the new Bank being warmly taken up. On the Ist of October, IS6I, a meeting of the proprietors was held for the purpose of electing peven directors and two auditors. Mr. James Williamson presided. There were IIS shareholders present. Mr. Thomas Russell, who had taken the most active part in the preliminary operations, moved a vote of thanks to Air. Vf. li. Rhodes (of Wellington) for the assistance he had rendered the Southern deputation on its visit to Wellington and Christchurch as well as the South generally. The following gentlemen were elected as tlie first directors :—Messrs. Thomas Russell, Junes Williamson, J. L. Campbell, Thomas Henderson, G. B. Owen, C. J. Taylor, and James O'Neill, and the auditors appointed were Captain Daldy and Mr. Samuel Browning. Mr. Alexander Kennedy (who had been Auckland manager of the Union Bank) was appointed the general manager. On the 16th October, ISGI, the Bank opened its doors for the transaction of business iu the premises formerly the warehouses of Mr. T. S. Forsaith, adjacent to Messrs. B. Tonks aud Co.'s present auction mart (north side), where business was carried on for some time, till the Bank purchased the freehold of the site of its present handsome establishment, and on which it erected banking premises, at a cost of £20,000. These premises are now being altered and enlarged, at an almost equal expenditure, in order to meet the wants of the Bank's large and constantly extending business.

The first half-yearly meeting was held at the head office, Auckland, on the 30th April, 1802. When the directore met the shareholders, only 1175 shares remained unappropriated, and these the directors deemed it best to retain for those parts of

the colony -where the Bank was unrepresented at that date. *It was announced that the Taranaki branch had been opened on the 13th November and the Dunedin branch on the 2nd December, 1861, Wellington and Nelson on the 18th January ensuing, and eleven branches and agencies (exclusive 01 the goldtields) between the latter date and that of the meeting. The brauches were at Napier, Lyttcllon, Christchurch, and Invercargill, and agencies at Picton, Blenheim, Otago Goldtields (Wetherstone and Waitahuna). The branches aud agencies of the Bank, of New Zealaud now number 109. The first dividend was at the rate of 6 per cent, per annum on the paid-up capital, £3000 carried to a reserve fund, and the balance (£7'iG 1&0 carried to profit and loss account.

To show the giant strides made bv the institution during the past two decades of its history, we may contrast the figures exhibited in the first half-yearly balanceBheet and that for the last half-year ending 30th .September, lbS2, omitting shillings ami ponce. Paid-up capital, £108,755, now £1,000.000: notes in circulation, £6*2.014, now £500.5G7 ; bills in circulation. £tiUSB, now £*J. 115,!)74 ; deposits, £334.107, now £7,9ir>. i ltj ; protit ami loss account, £6097, now £100,003. On the credit side we find the figures—coin and bullion—£'2Gl,f»l2, now £1,235,1*21 ; billM receivable and all other advances, £102,164, now bills receivable and securities in London, £1,795.999; balance due by other banks, £117,475, now bills discounted and other debts due to bank £7,810,000; landed property, banking premise*, &c , £9960. now 1230,699 ; reserve fund, £3000, now £575,000 ; rate of dividend on paid-up capital, 0 per cent., now 15 per cent.; total transact ions, £567,979, now £12,195,971. The day after the holding of that tirst half-yearly meeting, it may be noted, the New Zealand Government transferred the colonial account from the Union Bank of Australia to that of the Bank of New Zealand, and which account it has kept ever since.

At the same half-yearly meeting (30th October, 1502,) the directors met the shareholders with a London board of directors appointed and a branch there in full operation. The dividend declared was at the rate of 10 per cent., shewing that the young enterprise was stcadilv thriving. When the third half-yearly meeting took place it was announced that business had so inurc-ised that although capital to the extent of £5 per share had been called up, more was necessary to meet the rapid growth of the colony and the increased business of the Bank. It was resolved to call up the other £5 per share (£250,000) in £ 1 calls at intervals ot not less than three months.

About this period an important change took place in the management, and at the sixth halt-yearly meeting we find th« name of Air. D. L. Murdoch upou the report as inspector, and at that time, Uctober, ISG4, the dividend rose to 15 per cent. In the report on that occasion we arc told that but for a commercial crisis in Southland, and "an indiscreet advance at Duuedin." the profits would have been greater. Wo cannot find auy subsequent reference, in any of the balance-sheets, to auother indiscreet advance anywhere. Perhaps, however, like other Banks, the directors thought silence was more discreet than confession upon subsequent occasions. Be this as it may, the advent of Mr. Murdoch, who would probably have succeeded immediately to a very high position in another Bnnk, had not his services been secured by the directors of the Bank of New Zealand, has proved uf lasting benefit to the shareholder*.

In ISGG the directors initiated a guarantee and provident fund for the officers of the establishment, the Bank contributing £1500 as a free donation, supplemented by further donations of £500 each in the three succeeding half years, and in specially prosperous seasons they have, on one or two occasions given a handsome bonus to all their officers. At the eighth half-yearly meeting (27th October, lStif),) a dividend at rate of 17 pur cent, was declared, which was paid for two and a half years when the rate was again lowered to the old rate of IT) per cent, (including bonus) at which it stood \intil 1573, when for three half-yearly meetings it fell to 12J per cent., but since then it has been maintained at the uniform rate of 15 per cent, and large additions have been made to the reserve fund as well.

In IS7O it was decided to issue 10.000 shares, increasing the capital to £GOO t OOO, and in IS7G a similar issue was made, bringing up the capital to £700,000. At a later date further issues were authorised, making the total capital £1,000,000, whilst the reserve fund now stands at £575,000.

The Bank has erected handsome business premises in all the centres of population, as also in most of the more advanced country settlements. In Australia it his put down its foot firmly, by purchasing fine offices in Sydney and Melbourne, and has purchased a site in Adelaide for new premises whenever it may be decided to open there. The issue of its notes in Sydney was recently noticed in the Sydney Herald in complimentary terms. Its London offices are built upon one of the finest sites in the city, and it has a branch office in the youngest dependency in the British Empire, having taken over the business of the Fiji Banking Company some years ago. The Bank's corresponding agencies are now to be found in the United States, British North America, China, and the Fast, and the principal cities of the United Kingdom. It lias now in constant engagement a small army of officials, numbering 43~> oflicers of all grades, who conduct no fewer than 109 branch offices and agencies, as independent banking establishments.

The original and immediately succecding shareholders of the Bank of New Zealand hare gained largely by their foresight and faith in the colony aud in the institution, but their gain has been the gain of all, in the reflex influence which that individual prosperity has creatcd, causing that wealth to course through a thousand different rills of trade and commerce to the good of all classes in the community. With all the possibilities of the future, which lie before the institution, in the steady increase of wealth and population —of the development of the multiform natural resources of this yet young country—there is no reason to doubt that its progress and prosperity will be as satisfacfactory and enduring in the years to come as it has been in the past.

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BANK OF NEW ZEALAND. New Zealand Herald, Volume XIX, Issue 6524, 14 October 1882

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