AN OLD-TIME DEBT.

New Zealand Herald, Volume LXVI, Issue 20242, 30 April 1929, Page 9

AN OLD-TIME DEBT.

A.M P. SOCIETY AS CREDITOR.

BANK'S FORMER TROUBLES. .

ECHO OF FINANCIAL CRISIS, [from our own correspondent.] SYDNEY, April 18. Memories of Australia's great financial crisis in 1891 were recalled to many tho other day when, at the annual meeting of tie A.M.P. Society, Mr. B. J. Parkinson, of Melbourne, directed the attention of the policy-holders and tho directors to the fact that the English, Scottish and Australian Bank owed the society £50,000.

It was explained by Mr. Parkinson that this amount was on deposit when the bank failed in the early 'nineties. Tho creditors of the bank had agreed to a reconstruction in 1893, by which they were to receive 4£ per cent, on their debt, converted into stock; and to a further reconstruction in 1896, by which the interest was reduced to 3 per cent. Since that time tho bank has grown and flourished. However, according to Mr. Parkinson it refused to accept the view that the depositors—of whom the society was one—were entitled to a refund of their deposits in full. The present shareholders of tho bank wero receiving per cent., but the society, as the holder of tho 1896 stock, was getting only 3 per cent, on its £50,000, which meant that the asset was worth "only one-quarter of what it was originally.

Mr. Parkinson said that he was aware that various efforts had been made to compel the bank to honour what was believed to be its obligations and that these had failed, and that the Federal AttorneyGeneral had said that there was no redress for the old depositors. He pointed out, however, that a' condition of the 1356 reconstruction was that " £15,000 was to be put into a special reserve to support these stocks," and that " this reserve was in no circumstances to become the property of the shareholders." That £15,000 had now grown into a fund worth £500,000, and he argued that, as j it clearly was not the property of the shareholders, it belonged to those depositors who agreed to accept the 1896 stock; and that they should be repaid from this fund. He urged that the opinion of counsel should be secured, and the necessary steps taken to compel the bank to pay. The chairman of the society, Sir Alfred Meeks, said that there seemed to be. no redress. The value of the stock was not shown at its face value—it had long since been written down to its actual value. However, the board would give the matter, further consideration, and opportunity would be taken to make representations direct to the bank in London in regard to the principle involved. BANKING IN THE EAST. REDUCTION OF PROFITS. Several members of"the group of Eastern exchange banks have issued their reports for the past year, and in the cane of the largest, the Chartered Bank of India, Australia and China, a substantial reduction is disclosed in net profits, which fell from £724,039 to £627,263, the lowest figure since 1919. However, the bank, for the ninth successive year, paid a dividend of 20j per cent., free of income tax. This absorbed £607,500, and the board set aside £40,000 on account of contingencies, reducing the balance forward by £20,000. The reports of other Eastern banks have not' shown greatly altered results from those of 1927. Net profits of the Mercantile of India, for example, declined from £257.180 to £250,201, and the bank maintained the dividend at 16 per cent., and again appropriated £85,000 to reserves. In the case of the Eastern Bank net profits were slightly larger, amounting to £124,119, compared with £121,911. This institution may have benefited from satisfactory trade conditions in Irak, where it 'has several branches. During 1928 the bank extended its sphere, of operations east of India, opening an offico at Singapore. " UNFAIR COMPETITION." BRITISH GOODS IN GERMANY. Addressing the Institute of Patentees in London, Mr. W. J. Dow said that when recently he was in the German law courts a case came , forward in which one German firm accused another of " unfair competition." The complainants, it was said, had established a trade by importing enamelled goods from England, samples of which were shown in court. They charged their opponents with spoiling their business by producing close imitation of the British goods. The judge expressed astonishment that enamelled ware could be turned out in England at a price which made a profitable sale in Germany in spite of tariffs. " He was not half so surprised as I was," said Mr. Dow, "though I did not show it." AMERICAN MOTOR-CARS. PRODUCTION AND SALES. Competitive efforts of automobile manufacturers to expand their sales are being watched with increasing attention, says the New York National Bank of Commerce in its March bulletin. Production in 1328 was less that 1 per ceut. above the output in 1926 and that by grace of an increase in exports. In view of the rapidly rising trend of exports and the growth of the replacement market it seems' not un-. likelv that under*favourable conditions an output of 4,750,000 to 5.000.000 units can. be disposed of. Conceding the possibility, however, the present very high rate of production can hardly bo continued long, oxcept at the expense of the industry's well-being in the latter part of the year. The output of cars and trucks in February was estimated at about 470,000 — an annual rate of nearly 6,000,000 —and a still higher rate was anticipated for the following month. If production through the second quarter holds at the present level the industry will be faced with the necessity of reducing its output by nearly 33 per 'cent, in the second half of the year unless the potentialities of the market aro far greater than now appear.