N.Z. MAIL PUBLISHED WEEKLY. FRIDAY, OCTOBER 5, 1888.

New Zealand Mail, Issue 866, 5 October 1888, Page 16

N.Z. MAIL PUBLISHED WEEKLY. FRIDAY, OCTOBER 5, 1888.

When, at the former meeting of the Bank of Zealand’s shareholders, a committee was appointed to investigate the position of the bank and report thereupon, there were some who professed 1 to doubt thd probability of any good or substantial result accruing from tile labours of the' Committee, find who hinted’ their belief that the Committee Would simply ehdoavour to “ make things pleasant 1 ” for everybody in their report,’instead of revealing the whole truth, whatever it might be. The report of the Committee, which was presented at yesterday's meeting of bank shareholders, and which is reported \n exte,ns.o, in another column of this issue, is an absolute falsification of all these distrustful forecasts. No refutation could possibly be more complete. The report is not only a very able, but also a most trenchant one. All the weak points in the past management of the institution are ruthlessly and unsparingly exposed—indeed, the exceeding plainness and candour with which the Committee have told the shareholders and

the world all that Was wanted to be known aboiit the condition and prospects of the bank, has few, if any precedents in the history of banking. This extreme but wise frankness cannot fail to have a good effect in more ways than one. It must dispel.utterly any lingering fears which still may have remained in the minds of shareholders 1 that they were not to be told the “ whole truth that they were to be merely amused with a vague aud encouraging but Bpecious picture which might hold in reserve unwelcome disclosures for a future date. The proprietors of the bank are now warranted in feeling a reassuring conviction that they have “ got down to the bed rock ” at last ; that they know all the worst that is to be told,'and that they have now entered upon a new epoch of sound, prudent, and capable administration. That the state of affairs disclosed by the Committee’s report is in some respects by no means an agreeable one, cannot for a moment bo denied. The Committee say plainly that, through administrative imprudence in the past, the whole of the bank’s reserve fund has been lost, as well as a third af the paid-up capital, and that it is necessary to write down the £lO shares to £7. This must needs be unwelcome news, but it cannot be said to be unexpected. Indeed, the fears of some had pointed to a loss even larger than this, which is now authoritatively estimated at £SOO,OOO. Bub the tone and character of the Committee’s report inspires implicit confidence that nothing is held back, aud a careful perusal of that, report must carry with it the full conviction that low-water mark lias been reached, that the tide is on the turn, aud that the fl >od is about to set in. The Committee have not left their work half done. They do not shrink from allocating the blame where iu their opinion it should rest, for the bank’s heavy losses. It is satisfaciory to learn that by a judicious reconstitution of the management the elements of weakness thus indicated have been effectively eliminated. The drastic measures of reform which have been adopted, and are now proposed, will undoubtedly tend to rehabilitate the bank in public estimation, and to restore confidence—abroad as well as at Home—not merely in the bank itself, but also in this Colouy, with the interests of which that institution has long been so closely and inseparably bound up.

Turning now to the plans for the future, we find in them everything tu reassure and cheer shareholders. The proposal to increase the bank’s capital is one which, must instantly commend itself by its manifest wisdom. That the bank needed strengthening has long been patent to attentive observers, and this course has several timos been advocated. The occasion is pre-eminently one of those when the letting-in of “ new blood” is a wholesome remedial measure. The bank has . a magnificent business, in which it i 3 unlikely ever to be run hard by any eomptfition in this Colony, and this fine business is capable of immense development by means of enlarged capital. This is clearly the opinion of London capitalists, for ws learn upon authority that it is quite true that large applications have already been made by eminent financial and banking firms and capitalists for allotments of the new issue of shares. Among tho applicants we find such notable names as those of Messrs Glyn, Mills and Co., tho well-known London bankers, Anthony Gibbs, Lord Hindlip, and others; and it is understood that tho whole of the additional capital would be subscribed instantly in London did the Directors deem it desirable to permit this. There is every reason to believe that the Bank of : New Zealand is about to enter upon' a hew career of prosperity fully as ' favourable as anything experienced in the past, and of a far sounder and more permanent nature. A bitter pill has had to be swallowed—a drastic purge—but the nauseous dose has been unflinchingly taken, and its good effects are to come. Nay, they are already beginning to appear* On all sides wo' hear tho report most favourably commented upon, aud expressions of hope aud revived confidence freely uttered. Looking at the whole position calmly and dispassionately it is impossible to resist the conclusion that a great and serious crisis has been bravely and resolutely met, and is about to be triumphantly passed,