A BANK’S DEBT.

Otago Daily Times, Issue 20702, 27 April 1929, Page 7

A BANK’S DEBT.

TO A.M.P. SOCIETY. - ECHO OF FINANCIAL CRISIS. (From Our Own Correspondent.) SYDNEY, April 18. Memories of Australia’s great financial crisis in 1891 were recalled to many the other day .when, at the annual meeting of the A.M.P. Society, Mr B. J. Parkinson, of Melbourne, directed the attention of the policyholders and the directors to the fact that the English, Scottish, and Australian Bank owed the society £50,000. • It was explained hy Mr Parkinson that this amount was on deposit when the bank failed in the early ’nineties. The creditors of the bank had agreed to a reconstruction in 1893 by which they were to receive 4J per cent, of 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 the hank 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 the bank were receivin'* 12i per cent., but the society, as the holder of the 1898 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 Attorney-general had said that there was no redress for the old depositors. He pointed out, however, that a condition of the 1896 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 £600,000, and he argued that, as 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 showi, 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. 1