THE New Zealand Herald AND DAILY SOUTHERN. CROSS. FRIDAY, APRIL 27, 1888.

New Zealand Herald, Volume XXV, Issue 9039, 27 April 1888, Page 4

THE New Zealand Herald AND DAILY SOUTHERN. CROSS. FRIDAY, APRIL 27, 1888.

A sense of relief would probably best describe the general feeling that has supervened on the half-yearly meeting of the proprietors of the Bank of New Zealand, which was held in this city yesterday. It were idle to question that, consequent on the suspension of the constantly-recurring dividend at the previous meeting, there was a feeling of anxiety as to what would transpire when the results of another half-year's operations came to be considered ; and it is not merely from these having warranted a return to the payment of dividend, but also from the infusion of new blood into the directorate, and more still, from the bold course taken of inviting an independent committee of investigation and consultation, that the Bank appears to have taken a course calculated to dissipate every feeling of anxiety. The dividend is not a large one, judged by the standard of dividends paid by this institution without any interruption for so many years ; but seven per cent, is a dividend not to be despised in these times, when every form of enterprise has been so severely tried ; and is one that, all the world over, should be regarded as a satisfactory return for capital invested. It is based on the legitimate returns of profit for the half-yearly period over which the report extends, amounting to £54,755 Os Id, and it is paid after making provision for the sum of £25,861 8s 3d being carried forward to Profit and Loss Account; and it is accompanied by the satisfactory assurance, as given in the words of the Chairman, that" the bad debts properly pertaining to the half-year are quite trifling, and would not appreciably affect the result."

But however satisfactory such a dividend may be to shareholders, we believe that more substantial grounds for congratulation will be

found in the course which has been taken in filling up the vacancies in the directory with two gentlemen of proved ability and high standing, who are largely interested in the Bank, but who have not hitherto had anything to do with its management; and in appointing a committee consisting of gentlemen in whom all must have confidence, whose duty it shall be to institute an independent scrutiny into the exact position of the Bank and its securities. One of the evils that we seem to inherit from the manner in which colonisation has originated and developed in New Zealand is this, that an institution in one of our many centres must have a large proportion of its constituency and support in all the others, while the central control and management must in the ordinary course of affairs remain largely in the hands of those resident within easy reach of headquarters. The tendency of this must naturally be to produce a feeling that the manage-

ment has too much of a local character ; and not merely from the provincial jealousies that rule in the colony, but from a perfectly reasonable desire on the part of those resident at a distance to have a voice in the management of their own interests, there must be a constantly-recurring demand, expressed or felt, that the control and guidance of such an institution should partake more of a general character. This is a difficulty that is not experienced in the sister colonies, where in every case there is one centre of wealth and influence, and where resident directors may be locally found who fairly represent the interests of all parts of the colony. The Bank of New Zealand, though originated in Auckland, has its proprietary and its interests in every part of the colony, as well as beyond; and it will certainly be hailed as a new departure in a right direction when we see added to this directory the names of gentlemen of wealth and standing, who residing and having large interests elsewhere cannot by any one be supposed capable of being swayed by local influence or interests. We venture to say that the addition of the names of these two southern gentlemen to the directory of the Bank, will be found not only to havo practical results of the most valuable kind in the conduct of the Bank's business ; but, not less important, will tend to increaso the confidence of shareholders in the colonies and at home, and of the public generally, in the Bank's future success.

The suggestion of the directors that an independent investigation into the securities held by the Bank, and its position generally, should be undertaken by a committee to be selected by the shareholders, was a most judicious proceeding. The gentlemen proposed by Mr. Justice Gillies must inspire confidence that the task committed to them will be exhaustively accomplished. It is of the first importance to all concerned that the value of the securities held by the Bank should be subjected to an outside and independent scrutiny ; and in case of any over estimate having been made, that the worst of it should be immediately known, and that every really bad or hopeless debt being wiped oft", it might be known on what basis of security the Bank is actually resting. That this inquisition will be thorough, we have no doubt. The names of the committee, their character and standing, and the interest they have individually in the Bank, are a guarantee that they will lay their finger on any weak spots, if such there are, and that, if required in the interests of the institution, their recommendation will be drastic.

Late last night the committee issued a brief < circular, which will bo found elsewhere, explanatory of their position

and deprecating any unduly pessimistic view being taken. They have briefly examined the certified returns which have been compiled by the Bank staff; supported where necessary by independent valuations, and are fully satisfied as to the soundness and stability of the Bank, which has ample cash resources, but they ask for time to make the fullest possible examination into all its affairs, and to communicate with all the distant offices, when the shareholders will bo called together, and the report be presented to them. This policy seems to us a very proper one under the circum. stances, as it means thoroughness. \ courageous, honest, bold policy serves in banking as in other callings in life, and this is the prominent characteristic of yesterday's new departure.