BANK OF NEW ZEALAND.

New Zealand Mail, Issue 1199, 22 February 1895, Page 35

BANK OF NEW ZEALAND.

HALF-YEARLY MEETING. THE ADDRESS OF THE PRESIDENT. THE NELSON SHAREHOLDERS. The first half-yearly meeting 1 of the shareholders of the Bank of New Zealand since the head Office was removed to Wellington was held in the Chamber of Commerce on the Bth February. There were about 60 shareholders present. Mr W. Watson (president of the Bank) occupied the chair. The President said : It is not customary at this, the half-year meeting, to present accounts, but on this particluar occasion your new directors consider it advisable to state the figures of a balance-sheet which has been prepared for the 30th September, 1894, that being the end of the half-year, and to tell you what you should know regarding the position. The following are the comparisons between the figures of 31st March and 30th September, 1894: ;

11,125,501 11,462,^84 The increase of .£1,516,440 in capital is due to the instalments of the Government Guaranteed Stock having been received. Decreases in notes and bills payable are usual at the time of the year. Depositsand other liabilities show a decrease of £563,896, but this is in most part due to withdrawals in the United Kingdom, partly on account of the events which occurred in June last, and partly because the rates of interest have been lowered. You are, in fact, to be congratulated on having exchanged these deposits for Guaranteed Stock. The Bank had too much borrowed in the United Kingdom by way of deposits, and will not again take so much. The excess was both costly and unreliable. Profit and loss account shows a decrease of ,£20,416, which represents, I am sorry to say, the loss made during the half-year ended 30th September on the Bank's workings This makes it hardly necessary for me to say that we do not propose to pay any interim dividend. On the assets side there are increases in the coin, cash balances, money at call and short notice, and consols and other stocks amounting to £720,820, due to temporary and permanent bestowal of part' of the new capital. The item " Advances and other debts due to the Bank " shows an increase of £650,975, also due to the above cause, as at 30th September over £700,000 was invested in short loans in London, returning very small interest, whilst we were paying 4>\ per cent, on deposits and 5} Der cent, on Bank of New Zealand Estates Company debentures. Our rates for deposits are now reduced, the Estates Company have given notice to pay oft* £750,000 debentures in May next, and I have pleasure in being able to inform you that, with the sanction of the Colonial Treasurer, we have already invested almost all the second million' derived from the guaranteed capital in sound and liquid ' securities, which bring in interest approximating closely to what we now pay in London for 12 months' fixed deposits. Some shareholders wish for closer information regarding the investment of this second million, and it has been said that it is not good banking to pay 4 per cent, for money and invest it to yield a lower rate. Remember, however, that this is a reserve, and that it is indispensable that the investment should be of a safe and liquid nature. Every bank taking fixed deposits has to keep a certain proportion .of reserves which do not earn the rates paid for deposits. The London Board had invested a large portion of the second million in foreign 3 per cent, stock, but when this was referred to the Colonial Treasurer he demurred to it on the ground that it was of too speculative a character, and agreed ■with us that the money should be rather invested in colonial stocks, so as to yield a higher interest, and benefit the colonies rather, than foreign countries. So a large amount has been invested in colonial inscribed stocks in London. Purchases of stock are still going on in London, and probably by this time the balance is invested, but from our latest advices we know that Sro have £608,000 in Colonial Government stocks, besides British consols and other liquid* securities aggregating £172,600 more. The balance, if any, will be held in coin until it can be judiciously invested in accordance with the Act. Altogether the figures show vastly greater strength when compared with the previous half-year, and very full security to those dealing with the Bank. But although the security to depositors is more than ample, it must be borne in mind that, in order to work the Bank advantageously for the proprietors, we must let the public see it to be a profit-earning bank. Success to a bank means better rates for its exchanges and many other advantages. You will remember that at the ordinary general meeting of the Bank held in London in August last the late president stated that it was likely some provision would be required for bad and doubtful debts. We found, on jnaking a careful examination of the

Bank's affairs, in which examination we were ably assisted by the Government Auditor, that there were losses to bo provided for somewhat exceeding 300,000. As we did not see our way to declaring future profits with these unprovided for, and as it was found to be imperatively necessary to add to the earning power of the Bank in order to rehabilitate your property, it was evident that the call of one-third of the reserve liability could not be avoided. We have satisfied ourselves that when this cpll is paid, and provided Ave can work on the lines Ave have laid out for ourselves, of which we have every expectation, then the earning power of the Bank will be placed beyond doubt, and no further call Avill be necessary. It is well known that the Bank has to carry a load in the Bank of New Zealand Estates Company's affairs. The assistance from the Government both m guaranteed capital and legislation is calculated, however, to enable us to clear up that dependency. When avo assumed office we found the direction of the Estates Company located in London, entailing an unnecessary expense of several thousands of pounds per annum, besides 1 renderingthe management of the Company's affairs more complicated and difficult. The direction will now be entirely in the bands of two of your directors, the Hon W. W. Johnston and Mr William Booth, with Avhom I am associated for the purpose of consultation and signature of deeds, and I venture to say that no two o-entlemen could have been selected with more fitness than those mentioned. The economies effected in the salaries of the Estates Company alone will be very considerable, and all unnecessary and unremunerative expenditure has been stopped. A good deal has been said about money being thrown away in the expenditure of the Estates Company. Perhaps there have been some errors of judgment in that respect, but a large portion of the money expended has gone to pay off mortgages and to increase the live stock of the Company, as Avell as the carrying capacity of the estates, and that cannot be considered as thrown away. We have a most valuable and productive asset in the sound business of the Bank, and here I would like to signify my admiration of the Avay in which the majority of the staff-have kept the good business together, and also of the loyal way in which the customers of the Bank have rallied round it. These factors are of immeasurable advantage to you, and are, indeed, invaluable assets, which, with proper treatment, I firmly believe will succeed in making your property again valuable. Success has already attended several efforts for the more profitable working of the Bank, and I can assure you that economy is being studied to the utmost in its direction and management. Branches at Newcastle, Dargaville, Sydenham and Cromwell have been closed, Russell branch will shortly be withdrawn, and we have secured the good business cf other banks who have closed in Whangarei and Tauranga. Several of the oldest members of the staff- are being retired on pensions, which will be paid from the officers' own funds,, and consequently without cost to the Bank; and other reductions have been made in the staff. Mr Andrews —a gentleman well known throughout the colonies, and respected for his probity and ability —has been appointed acting-general manager. All doubtful advances have been stopped for liquidation, and fresh advances, as well as current business, are closely examined by the directors. The yearly balance will be struck on 30th March, and it is the directors' intention to thereafter propose to you certain measures which are at present in course of preparation and inadvisable to disclose at this stage, but which, if carried, they think will be to your advantage. This willprobably be done at the" yearly meeting in August, if not previously, and when I meet you then I hope to have a more pleasant tale to tell than I have now, but you will bear in mind that the savings we have effected, and the results of our working, will not bear fruit until some months pass. In the meantime, and until your new board have had reasonable time to show you what they can do in your interests, I would submit to you that it is both unfair to them and disadvantageous • to yourselves to foment agitation, which gets published abroad and is calculated to be useful only to the enemies of the Bank. Shareholders residing out of the Colony have no doubt been disturbed in mind by the recent reports of low prices and dulness of trade. They would, however, do well to note the large increases which, in the two years ending March, 1894, have taken place in the possessions of the people. During that period sheep in the Colony increased by 1,660,077, and cattle by 138,772, whilst the increase in cultivated land was 1,169,826 acres. The exports of mvitton were steady. Those cf butter increased by 6842 cwt., and cheese by 13,161 cwt. per annum. With these proofs of the growing capacity of the Colony and the industry of its people, we may, I think, have confidence in the future, and if prices improve we shall derive all the greater benefit from them. I now move the adoption of this report. Mr B. Hallenstein seconded the motion. As an old shareholder, and one who had lost a lot of money in the Bank, he did not do so with satisfaction and pleasure, but he had always recognised that it was the best, the most prudent, to do the best they could under adverse circumstances, rather than to give way to gloom and inaction, and worse still, injudicious action. The old board, with Mr Glyn as president, had acted wisely in taking the advise of Mr John Murray, who placed the position of the Bank before the Government, and, he need not tell them, brought matters to a successful issue, skilfully and promptly. Personally, he was independent of any bank, and he could have faced the winding-up of the Bank of New Zealand, even had the call been made at once, but he shuddered to think what would have been the consequences to New Zealand. Great credit was due to the Government and the patriotic feeling on both sides of

the House in averting a great calamity, in assisting the Bank, which Avith the present call of £3 6s 8d ought to be one of the strongest banks in the Australian Colonies. Hard as the call might be on some shareholders, with whom he heartily sympathised, it was, he understood, perfectly legal, and he did not think that it would be wise to foment agitation and try and resist the call. With an energetic and clever man at the helm, Avho had plenty of the right ambition, and surrounded as he was by a good directorate, the Bank at no very distant date, they might reasonably expect, wo\ild again be a dividend-paying institution. The president had told them that it had one of the finest connections in all New Zealand, and they might reasonably expect therefore that with good management -they would get dividends again. That Avas what they all wanted, but before all, he, as one of the shareholders, thought and Avould xiphoid the directory in seeing that their depositors were safe before they paid a dividend. As far as he could see from the figures disclosed, for depositors this was one of the safest banks in New Zealand. They must bear in mind in justice to the d: rectors that the earning power of all institutions had very much decreased. Every country was shaken to the very foundations by the low prices ruling all over the Avorld, and it would be a hard job for anybody to do more than, for some time, make both ends meet. The outlook Avas not good. However, when things were at the darkest in the hours of adversity, they sowed the seeds of prosperity, and the president had told them that New Zealand with all its drawbacks Avas making progress. Notwithstanding that last year they had shipped close upon two millions of sheep, and he did not know how many head of cattle in the shape of tinned meat, the flocks and herds had wonderfully increased. The population, if slowly, was steadily increasing. The country, especially in the North Island, Avas duly being reclaimed from wilderness, and he looked forward to the not distant day when the country Avould be again prosperous. The prosperity of their financial institutions depended upon the prosperity of the country, and it was gratifying that notwithstanding all drawbacks they Avere making substantial progress in settlement. He liked this especially for the benefit of outsiders who did not knoAv what New Zealand was made of. He did not believe there Avas a country under the sun with conditions of life as pleasant as they were in New Zealand, which has a greater future before it. One thing he wished to impress upon them, and that was, as shareholders/they must not be as remiss as they had been in the past in allowing directors to be elected without satisfying themselves that they were the right men in the right place. (Applause.) They had been too remiss, both here and in the Australian colonies, and that was what was at the bottom of the whole of their troubles. The present directors were men—some of them Avere known to him—of probity, and all of them had been successful in their own affairs, and the best thing the shareholders could do was to have confidence in them, and leave the ship in their hands. Mr A. W. Blanchard, of Nelson, did not think the report conveyed sufficient information to shareholders to warrant them in accepting exactly the figures the president had given them as sufficient information, and in order to get the information, it would be necessary to move an amendment. He then moved, "That the report of the president is not satisfactory, as it does not convey sufficient information." Mr E. Allan, of Nelson, who seconded the amendment, did not think it was right that the report should be adopted until they got more information. Practically, they had had no information at all. It was all very well to come forward and tell them to adopt a report of this kind, but he maintained that they must have certain information, which the shareholders should have. He was not coming there from Nelson to be put doAvn without getting further information. He had come from the Nelson shareholders to get certain information, and that information he would get, he could assure them. Mr Blanchard said he could not ask the questions of Avhich he had given notice at the present juncture, so he presumed the discussion would go upon the lines of the amendment and would probably elicit the information he wanted. -

The President said Messrs Allan and Blanchard had submitted a number of questions, Avhich he would read, with his answers, after the adoption of the report was discussed.

Mr C. T. Richardson said it was not with any feeling of hostility he approached the subject. They had been called together, and had had a great many figures read to them, but he thought it was very desirable, if they Avere to have any use, they should know what they were. He further thought that the President should have the report printed and placed in their hands a certain time before the meeting was called. (Applause.)

The President: That is not at all usual at the half-yearly meeting, and it saves the Bank a great deal of expense. Mr Richardson said they Avere asked to adopt figures which might, and he bad no doubt Avere, perfectly correct, but he thought in the interest of shareholders, especially of those who looked upon them from a hostile point of view, that the report should have been printed and circulated.

The President said that was the course adopted at the annual meeting. It had, hoAvever, always been the habit of the directors to do something at the half-yearly meeting which had been adopted by the shareholders. He was acting under the solicitors' advice. Mr Blanchard: Don't you think the occasion is an extraordinary one ? The President: I have shown that by bringing this report to you. , Mr Blanchard said it would have been

much more to their information and more useful to have had the report printed. The President said he would now put the amendment to the meeting. Before doing so he might state that anyone who had not paid the call or the interest on that call, if it was not paid by the Ist of February, had no right to vote, neither had he any right to be present at the meeting. Mr Richardson understood that because they were not in possession of information which they as shareholders felt they had a right to get, he stood there as one who had not paid his call, and he had waited for this meeting in order to get the information which he thought shareholders shmild possess. (Hear, hear.) Under the circumstances he would ask to be allowed to leave the room, and leave the room he would.

The President said it was not his fault. Under clause 25 of the deed of settlement no proprietor was allowed to vote or attend a meeting of proprietors unless he had paid the amount of every call which had been made or the interest thereon.

Mr Richardson then left the meeting. Mr Allan asked if he could put in some proxies. He understood they were not in form, as they ought to have been deposited with the Bank 24 hours before the meeting. He had received no notice of the meeting until a few days ago, therefore the shareholders outside Wellington had not had an opportunity of discussing matters and getting their proxies in order to send them to the meeting. He had the proxies with him.

The President: How many. Mr Allan : They represent about 1600 or 1700 shares. The President: Are they paid-up calls ? Mr Allan: As far as I know, but I am not certain. He went on to say that the meeting should have been convened by circular. He went to the Bank at Blenheim, and the officials there were unable to give him any information at all. They said they knew there was to be a meeting, but they did not know when or at what hour it was to be held. Jo they would see that things were not altogether regular in the Bank. The President: Quite regular. The Bank did what was required by the deed of settlement. Mr Allan : Don't you think the branches should be advised of the date and time so that any shareholder may get the information if he wants it ?

The President certainly thought the banks should have that knowledge. Mr Allan said he was placed in this position : that he would not be allowed to use the proxies through no fault of the shareholders or his own.

The President: I cannot go behind the deed of settlement, much as I should like to oblige you in the matter. He went on to explain that under clause 88 of the deed of settlement proxies had to be left at the banking house at least 24 hours before the time fixed for holding the meeting. Mr Allan : Then you refuse to take these proxies ? The President: I cannot help it. I cannot break the law. I cannot go behind the deed of settlement.

The amendment was then put to the meeting and lost on a show of hands. Mr Blanchard demanded a poll. In answer to a shareholder, the President said the directors were willing to allow him to read the questions and answers, and he proceeded to do so.

QUESTIONS ASKED BY MB BBANCHABD. In what manner the debt of the old New Zealand Loan and Mercantile Agency Company to this Bank was settled ? This was settled before, we took office. The Estates Company were jointly interested with the New Zealand Loan and •Mercantile Agency Company in some properties. We took over the properties from the Loan and Mercantile Agency Company for part of our debt, and for the balance, amounting to about .£115,000, we took prior lien debentures. These have now bean reduced by sales to .£76,000. If by debentures, what security does the Bank hold, and what rate of interest do these debentures pay ? The debentures are secured by a first charge on the Loan and Mercantile Company's assets, including uncalled capital. The debentures bear 4 per cent., but by arrangement the Bank gets 5 per cent., and holds a margin of security for its debt. Has the Bank retained the whole of the banking business of the Government ? Yes, it has all the banking business of the Government in this Colony except onethird of the remittances to London, which was given to the Colonial Bank in the late Mr Ballance's time. If not, what other bank is it shared with, and did the directors of the Bank of New Zealand assent ? Does it not break the agreement made with the Bank of New Zealand for conduct of the Government banking business ? I have already answered that question. In what securities is the second million raised for the Bank by preference stock invested ? I have already answered this in my report. ~. What rate of interest do the securities yield ? About 3f per cent. QUESTIONS ASKED BY MB ALLAN.

Has the Bank of New Zealand Estates Company (Limited) any separate existence from the Bank of New Zealand ? Yes, it is a limited joint stock company, registered in London, and has a separate existence. If it has a separate existence, where is the head office; who are the directors; has any balance-sheet been issued; if so, when ?

Head office is in London. DirectorsMessrs Jeffray, Glyn, Ewen, Johnston, Booth, Watson. Balance-sheets have been issued to shareholders of the Company as at 31st of March of each year. As already stated, the direction is practically in the hands of Mr Johnston, Mr Booth and myself. Will you cause to be publi.:.«.», .uvJ

issued to shareholders of the Bank of New Zealand, a detailed statement of account between the Bank and the Bank of NewZealand Estates Company (Limited), say; from August, 1890, to December 31st; 1894? The board do not consider it to be to the interests of shareholders to publish this information. Is it true, as published in the Auckland Observer of January sth, 1895, that 16s m the pound was offered and refused for the business known as T. and S. Morrin and Go., Auckland, ironmongers, although the said business has been and still is carried on at a loss ? It is not true, and the business is carried on at a profit. No good opportunity Of quitting it will be lost. Prom information which has reached me I gather that a number of shareholders will be unable to pay the call of £3 6a Bd. Should such be the case, how will the directors proceed to make up the amount necessary to pay off half the debentureholders in the Estates Company ? Will they call up any more of the reserve capital for other than liquidation purposes ? There will be no difficulty in paying the .£750,000 debentures due in May next apart altogether from the call. It is not contemplated that any further amount of the reserve liability will be called up. Under the Guarantee Act of last session two million pounds, we understand, has been raised. One million was to be applied to the Bank's ordinary business. The other million pounds was to be invested in liquid securities. Will you inform the meeting what those liquid securities are, what interest they bear, and where situated ?

I have answered this in my statement just made. Will you inform the meeting what is the actual position of the Bank, and how will it stand financially after the call is paid ? I have already stated to you the position of the Bank at 30th September. That is the last balance-sheet, including London accounts. The Bank's financial position will be of course strengthened by the amount since received from guaranteed stock and the call. *■

Upon what authority is the president's salary fixed at £2250? Does the Bank provide the salary ? If so, will you inform the meeting by what Act of Parliament this has been brought about, as there is no provision made in the Bank Guarantee Act, 1894, nor in the deed of settlement, other, than £2500 to be divided amongst the whole of the directors ?

Due provision exists in the deed of settlement, as per clause 70, amended at recent meetings of shareholders, and the president's salary has been duly authorised in accordance therewith.

The President continued: Although no direct notice of a question has been given, I am aware that a shareholder wishes to know the following:— Has the Bank paid or promised to pay any sum of money to any person for services rendered to the Bank in connection with the passing of the Guarantee Act ? Beyond the usual small fees to the Bank's solicitors for advice and a not more than adequate allowance by the London Board to Mr John Murray to cover his expenses, there was nothing paid or promised to be paid to any person. (Applause.)

The President (to Mr Blanchard) : Do you still press your amendment ?

Mr Blanchard said he pressed the amendment for this reason. It had come to his knowledge that proxies had been hunted up very largely by the directors in other towns than Wellington, and he wanted to see the number of proxies they had been successful in gathering. He had in his pocket a letter from a Southern shareholder who sent him proxies in preference to sending them to the directors. That showed conclusively that there had been " whipping up " of proxies on the part of the directors. They had the ordinary shareholders at a decided disadvantage, and individual shareholders ought to have been apprised of the exact date of the meeting by circular. He knew he should be beaten by a very large majority, and he wished it put on record. Mr J. Eyley (Dunedin) said he had listened to the president's statement with very great interest, although he could not say, as a large shareholder, with any degree of satisfaction. Still, he thought the statement was very clear and very straightforward, and contained all the information which he as a shareholder desired from the Bank. He was present about half a year ago at the meeting held in Wellington, and he said then he believed the result of the appointment of their worthy president would be that the Bank would largely benefit, and he thought the statement presented, that day verified his prognostication. ' He thought their friends from Nelson had taken up. a very unenviable and unworthy position. Whyit was only a few months since the president and directors took the reins of government of this Bank into their hands, and he held it was unworthy of them as shareholders, after the lapse of some four months, to come forward with these captious questions and to try to harass and entangle them in their work. It was not fair, it was unwise of shareholders to take up such a position. These gentlemen, however able they were, from the very fact that they had been only four months in office, could not have grasped the whole situation or become familiar with the details of the working of the Bank and of the Estates Company. It was an impossibility. Why, then, should they ask these questions now ? He sould understand shareholders coming forward with such a series of questions a year hence, when the directors had had time-to investigate the whole of the affairs of the Bank; but to do so at this juncture was, he held, premature, and indicated anything but a patriotic spirit on the part of the shareholders. He might say he held, perhaps, considerably more shares than

most of the shareholders present ; he had lost through the Bank, but he had never found fault with the officials. The mischief was done years ago, when the directors in Auckland became so elated at the prosperity of the Bank that they gave way bo utter recklessness in their management —(hear, hear) —and of course they must not forget that values have been reduced all round during recent years, and they in New Zealand were not alone in their sufferings. All the other colonies were suffering with them, and suffering to a larger extent than we are, and he thought that instead of crying* over spilt milk they ought to take heart and do what they could to help the directors to pull round the Bank. He had no doubt if they f olio we 1 the noble example set by the Government the Bank would rally, and although it might not regain its former position it would attain a position which would be advantageous to the shareholders. He did not think they would ever see the days of 15 per cent, again, and he did not desire to see them. Ho thought those days were injurious to the permanent interests of the Colony, but he did hope to see a time when the Bank would be able to pay fair dividends to its shareholders, and instead of lying down beneath the burden they ought to join heartily with the president and directors in making the Bank of New Zealand what it ought to be —rthe premier institution in the Colony. (Hear, hear.) He fully agreed with Mr Hallenstein that the president and directors ought to be allowed time to show what grit is in them, and that if sufficient time was given they would be able at a future meeting to piesent a very different balance-sheet. He hoped that shareholders would take a sensible view of the situation and unanimously accord to the directors their support in the conduct of the Bank's affairs. (Hear, hear.) He had great hopes, if an amalgamation between the Bank of New Zealand and the Colonial Bank took place, of living to see one of the finest banking institutions in the Australian colonies, and he declared unqualifiedly that if any gentlemen are capable of securing such a result the present directors are those gentlemen. He believed the Government would aid them in every possible way to make the Bank of New Zealand an institution worthy of the Colony, and judging from what they had done in the. past, the shareholders might hope for still greater results in the future. (Applause.) Mr G. Allen said he thought it would be premature for them to take any such steps as were suggested, which would interfere with those gentlemen who now had the conduct of the Bank's affairs. Mr Blanchard pointed out in February of last year an interim, dividend was declared. Well, if the .£300,000 of bad debts the president spoke of had accrued since then it was a most extraordinary circumstance ; if not, then the London board were guilty of a criminal act in declaring that dividend.

The president intimated that had nothing at all to do with the business before the meeting. Mr Blanchard: We have, though—very much to do with it.

Mr Eyley said the directors had been charged with collecting proxies all over the Colony. He wished to inform the meeting that he had never been asked for a proxy by any official of the Bank, and he was a large shareholder. Mr E. Allan said not only had the directors tried to procure proxies at Nelson, but the officials of the Bank to his knowledge asked some shareholders at Nelson to give the Bank their proxies, and also asked them not to attend a local meeting of shareholders, describing the place as a "sink of iniquity/' (Laughter.) The shareholders present might laugh, but ' he maintained that was not a very nice thing for their servants, whom they paid, to say. (Hear, hear.) Mr Tanner' said the officials of the Bank must follow its fortunes, and their salaries ought to be reduced. He hoped the directors would consider the interests of the shareholders in this matter.

The president replied that the directors had already considered it to some extent.

The amendment was then put and lost by 17,991 to 388. The original motion on being put was declared to be carried unanimously. Mr W. Nicholson moved, "That the questions submitted by the Nelson shareholders have been answered by the Presisident to the satisfaction of the majority of the shareholders present at this meeting." The motion was seconded by Mr Lodder, but as some shareholders objected to its being moved without notice, it was withdrawn. ~ The President said they had Mr Nicholson's opinion, for which they were obliged. Mr G-oddard asked whether the practical result of the call now being made would be to reinstate some of the capital that had been written off ? The President, in reply, said the call would be applied" strictly according to law. Mr E. Allan moved, " That a Committee of Investigation be formed, consisting of seven shareholders and officials of the Bank, to ascertain what the securities are which are held by the Bank against advances included in globo assets, what it costs the Bank to carry them on, what profit is obtained from them, and to find out what is the actual financial position of the Bank, and forward a printed copy of such report to every shareholder." He moved the motion, he said, for the purpose of eliciting that information which he felt sure most of the shareholders wished to obtain, and which he thought they were entitled to. What constituted the globo assets, and what proportion they bore to the whole of the Bank of New Zealand Estates Company, were matters of deep interest to the shareholders. He had always understood that since the Bank's previous "wash-up" in 1890, the Bank of

New Zealand Estates Company had been entirely separate, and most of the shareholders he had spoken to were of the same opinion. However, it seemed such was not the case. Further, he maintained they were entitled to a Committee of Investigation into the working of a concern which had brought ruin to hundreds of people. With regard to the Bank's balance-sheet, they were now in a worse position than before, inasmuch as the Colonial Treasurer alone appoints the auditors, and although they might be upright men, still, being dependent on that gentleman for their situations, they might have a leaning towards any suggestions he might offer. It had been the custom in the past, and is now, to give the shareholders little or no information, and notwithstanding anything that had been said to the contrary he had very much doubt whetL er the Government, the directors or the officials of the Bank really knew its true position. It had got into such a state of entanglement that it would require the whole of the ingenuity of the Colonial Treasurer to extricate it. At a meeting of shareholders held in London some twelve months ago, the chairman, in answer to a question, said the Bank had ample money and did not want to make any calls on shares. Let them contrast this with the statement made by the Colonial Treasurer in regard to one of the Bank Bills of last session. He then said that the Government was aware that the Bank was weak or wanted help nearly twelve months previously. To say the least, that was inconsistent. He bad not the slightest intention of casting any reflection on the present board of directors, nor did his resolution reflect upon them in any way, because it covered a time altogether before they took office, but he should like to know how it was they had made, as it were, a change of front. The meeting would remember when the present directors took office one gentleman, in returning thanks, said they undertook the responsibility with the full intention of not harassing the shareholders. Well, within five weeks of that they harassed them in a very bad way. That change led him to conclude either that they had no power at all, but must do as directed by the Colonial Treasurer, or that they were very vacillating. If they were to have confidence in the head of this house they must have candour. He maintained the shareholders were entitled to the information asked for in his motion.

Mr Blanchard said he would formally second the motion, in order that the information might be circulated amongst the shareholders.

Mr T. W. McKenzie said that if the applicant went to the Bank and asked for the information in a proper manner he would be able to obtain all he required. He thought the shareholders should be told that it was not to the interest of the Bank that that information should be given, and if they had confidence in the directors they had elected they would be content with that assurance. (Mr B>. Allan : We have no confidence in them.) It would be treating the directors in a very rough way indeed to do what it was now proposed to do, and would put them in a false position. Let them have time, and he had no doubt 'the interests of the Bank would be conserved, and that they would meet under happier auspices on a future occasion. As to the call, he thought it was right to make it, and that it should have been made ten years ago instead of borrowing money. (Hear, hear.) They now belonged to the Government "body and bones," and he suggested that the Government should buy some of the land belonging to the Bank, which would be an excellent method of getting them out of their difficulties. Mr Blanchard suggested that the mover of the resolution should withdraw it and give notice of it for the annual meeting. Mr Allan said he would do so if every shareholder was notified that it would come on at the annual meeting. The President said that could not be done by the Bank, and Mr Allan thereupon refused to withdraw it. Mr W. Brown said the shareholders had elected a president and directors to manage the affairs of, the Bank, and he did not think it was at all complimentary four months afterwards that the shareholders should ask for a committee to act with them in a scrutiny of its affairs. His view of the case was that the president and directors are really a committee of management, and he could not understand why they should want to add to that committee. It might be the Nelson people wanted more information than it was prudent to give, and he thought their suggestion was very unwise, and he should vote against it. Mr B. Hallenstein remarked that if such a motion as this was carried every client of the Bank who could do so would leave it. That was the most damaging thing they could do to the Bank. The Hon W. W. Johnston said that one of the matters about which Mr Allan felt somewhat sore was that at the last meeting one of the directors in returning thanks for being elected (very likely it was himself) said it would be the effort of the board to inflict no unnecessary hardship on the shareholders, and he came to the conclusion that the present board was either a very vacillating body or else in reality they felt themselves compelled to do what the Colonial Treasurer ordered them to do. He was perfectly right in saying that, as he would show him by reading a clause of the Bank Share Guarantee Act. Mr Allan: I understand all about that. Mr Johnston, continuing, said it was incumbent on the directors, if required to do so by the Colonial Treasurer, to make this call. That being so, the meeting would recognise at once that there was no inconsistency , between the mind of the directors as expressed at the last meeting, and their compulsory action with regard to this call. The motion before the meeting dealt with two matters, the first being, what is the actual position of the

Bank ? One of the duties which the board took upon itself on being elected was this very tack, which it was now suggested a special committee should be appointed to do, viz., it was their duty to enquire into the actual position of the Bank and to make it known to the shareholders. They had heard the president say so far as six months' working of the Bank was concerned that there was a loss of .£20,000. So far as they could ascertain on going through the accounts, they were very sorry to say they showed a deficiency of something over .£300,000. They would see that the directors, acting on the lines which this proposed committee would have to go upon, had not at all shirked their duty. They had disclosed what they had found out. He fancied, looking at this resolution, that at the meeting in Nelson the shareholders must have been under the impression that the board wanted to hide something. The shareholders would see that was not the case. What they knew they had disclosed, and not only had the board been occupied in making estimates of losses made during a former administration, but,l as the president had said, they were doing much more than that—they had taken hold of all hazardous accounts, they were doing what they could to stop them, they had prevented their growth, and doing what they could to contract them. So far as he knew, "the present board had made no risky advance of any sort. If they erred it was on the side of prudence, and he did think it was casting a most undeserved censure upon a board freshly brought into being to say they would supplement the board's efforts by the appointment of such a committee. (Hear, hear.) Now with regard to the position of the Bank of New Zealand Estates Company. The position was this : Clause 16 of the Bank of New Zealand Share Guarantee Act said: "In valuing the shares held by the Bank in the Bank of New Zealand Estates Company (Limited) or any items which shall take the place of such shares or any of them, the directors and auditors shall treat the same as an account in liquidation, and pending the completion of such liquidation such shares or items shall be taken at the par or book value thereof." Clause 11 enacted : " "Until the said A shares shall be called in and cancelled as aforesaid the directors shall not pay any dividend to the holders of any ordinary shares without the consent, in writing, of the Colonial Treasurer, who, before giving such consent, shall be satisfied that any such dividend may be paid without unduly affecting the security of the Colony in respect of such guarantee as aforesaid." What did that mean ? The Legislature had given their administrators, whoever they might be, a considerable time in order that they might have plenty of opportunity to realise this property to the very best advantage,. At the same time the Legislature had said they should not pay any dividend on ordinary shares unless they satisfied the Colonial Treasurer as to the soundness of the Bank—that was to say, the Colonial Treasurer would have to be satisfied that there was not too wide a gap between the book value of these various assets and what they would most likely realise when they came to be sold. What better position could they be in than that ? They were given time, certainly not less than 10 years, during which every convenient opportunity would be availed of in order to dispose of these assets, and during the whole of that time the law said the directors should value these things at par. Then, supposing during the course of 10 years or so any rise in the value of wool or wheat took place, then tha value of all these properties would materially benefit j very likely during that period they might come out at par. But supposing now, when wool and wheat were very low, a committee of investigation said that on present value they thought there would be a certain gap between the book value and the value that might be realised, would that be to their interest ? It might be that with the time given by the Legislature, together with aggregate profits which would accrue during that period, they would come out all right; but would any announcement such as he had shadowed forth benefit them in any way? He could see many ways in which it would be detrimental to them, and therefore he hoped the meeting would not hesitate to reject this motion on the grounds he had mentioned. Firstly, in regard to the affairs of the Bank they had been told exactly how matters stood, the losses during the past six months, and the probable total losses, and with regard to the position of the assets they now saw that if the directors had not made any reference to any further loss that might be occasioned on their realisation it was because' they ware constrained by law to value them at par, and the Legislature had put them in an exceptional position to realise over a number of years. He hoped the motion would be negatived. The President said j " I must remind you that I have duties to perform as President of the Bank appointed to conserve the interests of the Colony because of its guarantee to this institution, and also to safeguard the interests of the shareholders. I woxxld, therefore, be failing in my duties did I remain silent on this occasion." He added that from the knowledge he had gleaned during his term of office he was strongly of opinion that the carrying of any such motion as this would not only be injudicious but detrimental to the interests of all concerned. He, therefore, suggested to Mr Allan that, after what had been said, he should withdraw his motion, which could do no good whatever. , Mr Allan said he was not himself responsible for the motion. He was deputed by the Nelson shareholders to'press it,, and, further, he could not withdraw it unless it was to come up at the next meet-'] ing, and notice of it given to all the sharbjl holders. ■,,'■,!

Mr J. By ley said he thought could not go further than this motion,* which was simply ludicrous and amou,ut?Q^ v ''

to a vote of want of confidence in the present directors. (Hear, hear.) Besides, supposing the motion was carried and the committee appointed, what could it do ? Absolutely nothing. The Government had been very generous and considerate in this matter, and extended the sale of. these properties over 10 years, taking them at their present book value. Surely the Colony was not going to stand still, surely the depression was not going to last ]0 years, and perhaps these properties would realise far more than was anticipated. He felt it would be monstrous for the shareholders to listen to a proposal of this kind, and he was sure they would .not. The motion was then-put to the meeting, and lost on the voices. MrR. Allan said he hoped that in future meetings would be convened by circular, so that all the shareholders might know the date it would be held. Mr Allan was proceeding to give notice of a motion to that effect, when The President requested him to send it into the" banking house, as required by the deed of settlement. Mr Kyley proposed a vote of thanks to the present directors and staff of the Bank. He had been connected with the Bank, he said, for 30 years, and more courteous and obliging men than the officers of that institution could not be found. The vote of thanks was seconded by Mr Knigge and carried unanimously. The President briefly returned thanks, saying that the officers of the Bank had had little of late to cheer their arduous labours, and the kindness of the shareholders would be deeply felt and much appreciated. The minutes were read and confirmed, and the meeting terminated.

LIABILITIES. March. & 900,000 Sept. ■P. Capital paid up BfiEEE [Reserve Fund ... 45,000 » 'VD,UWU Notes in circulation ... 515,56S 46i,81l Bills payable 1,413,997 870,106 Deposits and other liabilities ... 8,213,199 7,619,303 Profit and Loss Account ... ... 37,740 17,324 11,125,504 11,462,984 ASSETS. Coin, &c. 1,403,364 1,637,023 Bullion ... ... •■• 98,655 78,900 B. R. and B. Dis. ... 2,383,073 1,366,403 Advances and other debts due to the "*■ Bank 4,855,569 5,506,544 Investments in British , Consols, &e.~ 61,524 608,685 Bank of New Zealand Estates Co. shares 1,850,000 1,850,000 Landed property, premises, &c... 413,319 415,429