THE SECRET WELL KEPT.

Otago Witness, Issue 2106, 5 July 1894, Page 21

THE SECRET WELL KEPT.

THE CAUSE OF THE CRISIS.

Wellington, June 29.

The secret about the Bank of New Zealand was well kept, and it was late in the afternoon before anything could be ascertained with any accuracy, but afc 6 o'clock, however, the name of the bank affected was being freely used. Even local officials in the bank were in the dark as to what was about to happen, and heard it for the first time from outsiders. At night the galleries in tbe House were crowded by people eiger to hear what the Government intended to propose.

Mr Murray has furnished the following memorandum to the Press Afsociation : — "A variity of adverse conditions which have in the last year or two, more especially in the last year, iujuriously affected the producing interests of the colony, have of necessity reflected on its chief banking institution. Sbares in the Bank of New Zealand became greatly depreciated in the market, and rumours were persistently put about which, however baseless, had a prejudicial effect. The situation was unsatisfactory and might at any time have become dangerously accentuated. Under these circumstances I recommended to the directors that the Government be consulted. To this they agreed, and. asked me to represent them,

The Government at once recognised the importance of placing the" bank upon a thoroughly substantial footing, and it was determined to ask the Legislature to authorise a colonial guarantee to an issue of £2,000,000 of fresh capital, all to be paid up. This will give a total paid-up capital of £2,900,000, besides one million of reserve liability still to fall back on, making the Bank of New Zealand one of the strongest banks in the colonies. Shareholders may rely upon it that the measure is in their best interests, as well as in those of the colony. Their shares are now much depreciated, and had the bank been left to drift, worse would have followed. I cannot foresee prices and seasons, nor conditions which make for prosperity, but I am perßuaded that better times must come. The operation now arranged preserves to shareholders the entire goodwill of their business which an ordinary issue of shares would not have done, and while some sacrifices are for the present inevitable I am confident that the ultimate outcome will be reinstatement of shares not merely to par value but to a premium, whereby these sacrifices will be in a good measure recouped.