STATE BANK PLAN

New Zealand Herald, Volume 81, Issue 25048, 11 November 1944, Page 8

STATE BANK PLAN

\ _______ GOVERNMENT POLICY STATEMENT TO BE MADE ( p, A .) WELLINGTON, Friday A statement will be made concerning the Bank of New Zealand as soon as the subject has been considered by the Government and its policy decided. This was stated today by the Minister of Finance, Mr Nash, in an interview concerning the decision of the Labour Party conference to recommend the Government to consider the acquisition of the privately-owned shares of the Bunk of New Zealand. "If it is decided to acquire the shares," said Mr Nash, "the procedure will probably be similar to that followed on the acquisition by the Govern* nient of the privately-owned shares in the Reserve Bank and the Mortgage Corporation, and the price to bo paid for the shares will be based on transactions which have taken place during recent months and will not in any way be influenced by future speculative operations." FORMER ACTIONS RESERVE BANK CONTROL REPAYMENT OF INVESTORS Tho Reserve Bank was constituted by the Reserve Bank of New Zealand Act, 1933, with the primary objects of exercising control, within defined limits, over the monetary circulation and credit in the Dominion. As originally constituted, the bank had a share capital of £500,000, composed of 100,000 publiclysubscribed shares of £5, bearing a cumulative dividend of 6 per cent. The issue was heavily oversubscribed and a pro rata, allotment was made, preference being given to applicants for smaller parcels. Important changes in the constitution of the bank were made by the Reserve Hank Amendment Act, 1936, one of the Labour Government's first maior legislative measures, which was put through the Mouse in face of a vigorous stonewall from a depleted Opposition. Under this legislation the bank was reorganised as purely a State institution. Capital Abolished The subscribed share capital of the bank was abolished and provision was made for the repayment to shareholders, either in cash or in Government stock at the option of the shareholder, of the value of the shares held and accrued dividends. The price paid to shareholders was £6 5s for a £5 share, the market price ruling on election day, 1935. The total cost to the Government was £625.000. Created under the Mortgage Corporation of New Zealand Act, 1934-35, the Mortgage Corporation took over practically the whole of the operations of the State Advances Department, which was virtually abolished. The corporation was under a board of directors appointed partly by the State and partly by the shareholders of the corporation. ' The capital of the corporation was £1.000,000, part of which was raised. This was done by public subscription on much the same policy as that obtained for the Reserve Bank. The State Advances Corporation Act, 1936, passed in the early life of the Labour Government, effected what amounted to a reversion to the traditional State Advances system. Shareholders Compensated The Mortgage Corporation was reorganised under the title of the State Advances Corporation of New Zealand and the private capital invested in the former body was cancelled, provision having been made under the Act for repayment to shareholders in respect of shares held in the corporation. Stock or cash was offered and premiums of Is 3d and 7Jd a share were paid, according to the amount paid up. Shareholders who elected to accept stock received £ll2 10s in stock for every £IOO invested to compensate them for a reduction of interest from 4£ P" cent to 4 per cent. The object of the Government, Mr Nash said at the time, was to place those people who had subscribed their money in the same position as if the Government had not taken over their shares. The cost was approximately £281,000. DIVORCE ACTION DECREE ABSOLUTE GRANTED CUSTODY OF CHILD TO FATHER (0.C.) HAMILTON. Friday An application for the custody of a child and a decree absolute was made by Hugh Wilson Mills, school teacher, of Auckland (Mr King), before Mr Justice Smith in Hamilton today. The respondent was Joan Veronica Mills, school teacher, of Auckland (Mr J enkin son). It was stated that Mills obtained a decree nisi from his wife three months ago on the grounds of her adultery with an American serviceman. The husband was given interim custody of the child, but did not then exercise his rights. His Honor said that the first consideration was the welfare of the child and he was satisfied that morally the home of petitioner's parents, where petitioner was living, was better for the child than the home of the respondent, whose mother had not taken steps to check her daughter's misconduct. His Honor made an order giving the custody of the child to the petitioner and providing reasonable access to the respondent. A decree absolute was also granted to the petitioner. ALLEGED ASSAULT BARMAN SERIOUSLY HURT (0.C.) ROTORUA, Friday A commercial traveller, Arthur Grange, aged 39, appeared in the Rotorua Police Court today on a charge of assaulting Frank Powell, a barman employed at the Lake House Hotel, Ohinemutu. The police stated that Powell, following an altercation shortly after six o"clock on the previous evening, had been admitted to the Rotorua 'Public Hospital with head injuries. His condition had been reported as serious, but the extent of the injuries had not yet been ascertained. Mr O. H. Coleman, J,P., remanded the accused, bail being fixed at £SO and n surety of £SO. DAIRYMEN'S INTERESTS (0.C.) HAMILTON. Friday The need for organisation on the" part of the owners of dairy herds in view of (he activities of share-milkers was stressed at a well-attended meeting of farmers from all parts of the WaHcato. It was resolved to form an owners' association and to establish headquarters at Morrinsvillo.