HANGING FIRE

Otago Daily Times, Issue 22505, 25 February 1935, Page 8

HANGING FIRE

A correspondent, who writes to us this ; morning, suggests Government interference in the interests of those who were induced to subscribe for shares in the Australian and New Zealand Banking Corporation, Ltd. It is not clear to us that there are any grounds upon which the Government; could legitimately intervene. It is still less clear to us why the corporation is being maintained in existence. The formation of it was undertaken several years ago, at a time when the opinion seemed to be entertained by a number of people that the field of banking operations in Australia and New Zealand was sufficiently large to admit of the successful operation of new institutions. In 1928 an enactment was passed by the Parliament of this Dominion providing for the incorporation of a bank of issue, to be called the London and New Zealand Bank, Ltd., subject to capital of not less than £1,000,000 being subscribed by July 31, 1930. By amended legislation, the time allowed for the subscription of the capital was subsequently extended to 1932. While the attempt was being made to establish this bank, the prospectus of the Australian and New Zealand Banking Corporation, Limited, with headquarters in Australia and with an authorised capital of £5,000,000, was issued. The time was anything but propitious for securing support to any enterprise of this description. ■.: The signs of the economic blizzard, which was about to sweep across the world, were already apparent. The London and New Zealand Bank project did not materialise. It faded silently out of notice. The promoters rof the Australian l and New Zealand Banking Corporation would have acted in fairness to those who subscribed for shares if they had acknowledged that, in the circumstances of the times, they could not possibly expect to raise the capital they required. The response to their invitation to the public was so frigid as to deprive them of any substantial ground for the hope of eventual success. In actual fact, the names of the provisional directors hardly justified the confidence that, even in more favourable circumstances, the enterprise would be carried to fruition. The company was registered in 1929. Its latest statement of accounts that has come under our notice showed that at September 30, 1933, the subscribed capital was only £171,140, and that the amount paid up was £50,561. Yet the company seems to have acquired land and buildings to an estimated value of over £154,000, on the security of which a mortgage debt of over £135,000 has been incurred. Of the extent to'which it has, since this statement was issued, managed to raise fresh capital we are unaware. It cannot be reasonably supposed, however, that, under the conditions that have prevailed, it has met with much success. In the meantime, as our correspondent this morning informs us, the shareholders, whom we judge to be persons who have not ample means, are being threatened with summonses for the amount of their calls that are in arrear. All the circumstances seem to point to the desirability of the company being wound up with the least possible delay. If those' who are directing its affairs do not realise that there is no sufficient warrant for its continued existence, a petition to the court on behalf of the harassed shareholders for a compulsory liquidation of the concern may become necessary. ■--.■"