THE BANKING QUESTION.

Otago Witness, Issue 2170, 26 September 1895, Page 18

THE BANKING QUESTION.

AGREEMENT BELIEVED UNCERTAIN

ALLEGED ULTIMATUM.

(Fbom Oub Own Correspondent. ) Wellington, September 23. In quarters that I cannot disregard, it is stated that the banks agreement upon which so largely hinged the recent resolutions of the Banks Committee of both Houses, and the subsequent legislation in the interest of tho Bank of New Zealand is far from consumma'ion, aud that it is now far more than possible that it will not be accomplished. It is about a fortnight ago that I indicated what I then aud still have reason to believe was the altitude of the Bank of New Zealand directors as to the general terms of purchase. I understand that they have boeu insistent upon a condition precedent tbat none but assets of unquestioned value and unMsailably sound accounts should be taken over, together with such business premises as could be tut nrd to profitable account by th« State-aided institution, and thtit after this the, value of the goodwill of the Colonial Bank would b8 mutually agreed upon. Thiß would mean that the Bank of New Zealand would not assume ths liability of the Colonial Bank to its shareholders, which is £2 per share paid up on 200,000 shares ; bat as against this there would be to credit the amount of the agteed-updn value of the goodwill of the bu;ine&B. Further, such of tbe atsets of the Colonial Bink in the nature of stocks or advances as are not of a readily realisable character would not under such agreement be taken over, and to dispose of these and wind up tbe business the concern would necessarily go into voluctary liquidation. In plain phrase it is understood that the directors of the Bank of New Zealand decline certain accountf, reject certain assets, and will not consider a valuation of the share capital, but are prepared to pay for the value of the goodwill. On the other aide there ia alleged to be much difference of opinion as to the assets and current accounts that ahould be taken over by the Bank of New Zealand, while some of the directors of the Colonial Bank are said to appraise their share stock as high as 37s 6d per share, which is 2s 6d below the amount paid up, while their market value to-day may be put at 20s. Last week they were held for 235, but to-day I believe they have receded, coaaequout upon uncertainty as to the agreement. And as to tbe prospects of the agreement, I fear they are the reverse of roseate, for I am told to-day, upon what seems to me good authority, that the directors of the Colonial Bank have finally declined the terms proposed by the Bank of New Zealand, and at the same time have made a counter offer, with an intimation th&t if it is not accepted on or before Wednesday next negotiations will be broken off. If this be ttue, ac seems likely, or it would not

be here sot down, and the directors of the Bank of New Zanlaud stand firm to this point, thoy have apparently considered tho bust to be done ia the interests of the taxpayers, then in such event it needs no prophet to say that there will be no bank Rgrecinent, aud all tho diplomacy, lobbying, intrigue, svud political machinations that have been emplijod to bring it about will have been in vain. On (he other hand I am assured a majority of tho directors of the Colonial Bank are not by any means anxious that the institutiou they govern should be effaced, that they have the strongest conviction of its assured future prosperity, and that they will be gratified at disagreement rather thin agreement.