BANK OF NEW ZEALAND.

Otago Witness, Issue 2179, 28 November 1895, Page 61

BANK OF NEW ZEALAND.

A SPECIAL MEETING. Wellington, November 19. A special general meeting of the shareholders of the Bank of New Zealand was held this afternoon. Mr Watson, president of the baDk, said the meeting had been called for the purpose of altering the deed cf Settlement of the bank, so as to make it con'orm to the provisions of " The Bank of New Zealand and Banking Act 1895." These alterations were considered by the directors to be beneficial to the interests of shareholders. The board had learned with regret that aome^unknown per=on or persons had sent circulars to shareholders asking forp:oxies to be used in opposing the carrying of these alterations. The board were quite aware that the response to this anonymous invitation bad not been such as to cause anxiety in the minds of those who had the best iutu'egts of the bank at heart, but they thought ifc well that he should there state the difference between the footir.g upon which the bank now ttood and that upon which it would have stood had not the Br.nking Acts of last session been passed. There could hardly be ony doubt in the mind of any one that had the directors in the first in3tauce, and without taking any steps to obtain the assistance of the Legislature, made public the actual state of affairs found by them after balancing the accounts at the 31st March last, the bank would have had to btop payment, and probably to wind up its affairs. Neither could there be any doubt in s tho casa of the bank having had to wind up that shareholders would have had promptly to pay the last farthing of the reserve liability. Happily the appeal to Parliament avettod all this. It had been a noble feature of the politics of all EngJi-h-speakiug countries that when public danger* had threatened the members of the Legislatures had risen superior to considerations of party. That was the case in the crwis which it fell to the New Zealand Legislature to deal with last session. The leader of the Opposition and several of his followers in Parliament were as earnest in supporting the banking .measures as were the Premier of the colony and others on the Ministerial side. Iv the .-Upper •House there were only four difSbutien's to the measure, and it might therefore be said the Parliament of. the colony on that occasion had pub .aside all party spirit and acted, after due deliberation, iv the manner which appeared to them beet in the interests of the colony. The Legislature, by contributing fresh capital to the bank and separating from the bauk the landed properties in New Zealand, had enabled provision to be innde for all bad and doubtful debts, had strengthened and established the bank's credit, and placed it— as regards facilities for the transaction of business — in a position equal, if not superior, to that of any other bank. The second call on the reserve liability of £3 6a 8d was to be spread over 18 months from the 30th June 1896, and there was every probability that on account of this call sha.reh< lders would receive interest. No further call could be made on the reserve liability until after the 31st December 1898, and unless the prices of produce declined to such an extent as to make a loss on the Assets Board unavoidable, it was extremely improbable that any further call would be made. With regard to the veto of the president, it was simply intended to set aside any resolution which would damage the large interests which the colony now held in the bank. He thought it would be admitted that the Legislature, in making this provision, were only safeguarding to a reasonable extent the interests of the colony. The shareholders, having a majority on the board of directors, continued to hold the actual management of the bank in their own hands. No advance could be made and no policy adopted if a majority of the board opposed it. Therefore 'the interests of shareholders were in every way conserved. He then moved the first resolution, namely — " That the deed of settlement of the Bank of New Zealand be altered so as to make it in contormity with the act of the General Assembly of New Z. aland called ' The Bank of New Zealand and Banking Act 1895.' " The Hon. W. W. Johnston seconded the motion. Mr R. Allen (Nelson) moved as an amendment — " That in the opinion of shareholders it is not desirable to alter the deed of settlement in the manner proposed." He said the alteration meant that they were giving into th& hands of one man the sole control of the institution, and they would be forever prevented from having any voice in its mauagement. The conditions were exceedingly degrading and humiliating to shareholders, and one could scarcely conceive them to exist outside of Russia. Shareholders had received ne consideration, and if these proposals were carried they would have to pay up every penny of the reserve liability, and would at last be kicked out without receiving a fatthing benefit. Wich regard to the bait held out by the directors that they would receive 5 per cent, on the second call, it was sheer moonshine, as the bank could not earn the amount. He wished to impress upon shareholders that if they rejected these proposals the second call need not and could not be made — at least for the purpose mentioned, — and they could put themselves into the position of exacting some consideration from their newlyacquired partner. They might be told, as they had been on previous cccasions, that the directors were very hopeful ; but it had been repeatedly proved that their utterances had to be taken with a very large grain of salt. Mr W. Weir seconded the amendment. Mr Paul Coffey endorsed the remarks of the mover of the amendment. The whole thing from end to end was a perfect faree — a delusion and a snire for the unwary. The colony did not stand in the slightest danger from the Bank of New Zealand. It was the poor unfortunate shareholders who were losing every penny of their money. A lot of bosh had been h talked about what would have happened if the bank had closed its doors. Had this occurred, shareholders would have been liable for every penny, but as against that they would have had the assets of the bank. He strongly objected to the new arrangements iv regard to the utxSL of the combined banks.

Mr Watson, in reply to Mr Allen, said that the mere passing or not passing of the alteration would not sffecb the call being levied. As to what Mr Coffey had said about, the st<»ff being increased, he pointed out that a lo 1 ; more business would now be done by the Bank of New Zealand. None of the Colonial Bank staff had been provided with positions except where it was absolutely necessary. Mr B. Hallenstein could not see what purpose would be served by carrying the amendment. He sympathisod with the supporter of the amendment in many thioga, but it would be as well to bury the past. If the Government had not come to tb^e as-ist»nce of the bank, it would have rno&nt ruin to many of the shareholders, aud caused great trouble throughout the colony. With the present upward tendency for most of our productions the downward course had been arresUd, and the result to the Bank of New Zealaud was likely to turn out better than they had expected. A shareholder had remarked that a great many of the Colonial Bank's servsuts had been takon on. Ho thought it was a wise p9licy, independent of whether they were required or not, to keep on tho leading men in the Colonial Bank. It would enable them to carry on the business betUr and carry iniluencß with the customers of tho Colouial Bauk, which they hoped would add to the earning pjwer of the Bank of New Zealand. He thought the B^nk of New Zealand directors had acted rightly throughout the amalgamation negotiations. The eolojiy was now on the eve of better times, and ho had great hope for the future. Mr Coffey explaiued thafc in referring to the i tiff of the Colonial B;idlc he merely wished to point out that it was a striking proof of the system of .economy which the Bunk of New Zsaland was about to enter upon. A ballot" was then taken, with the following result : — For the amendment, 4349 votes ; against, 17,54-1 votes. The amendment was lost, and the motion put and carried on Ihe voices. Mr Watson thrn moved— "That the capital of the said bank, confisMtij? of £900,0C0 in 100,000 ordinary shares of £5 5% each paid up and 50,000 ordinary shares of £7 10a each paid up, and also the pioceedd of the call of £3 6t 8d made by the directors of the said bank on the 29bh day ~6f November 1894, be dealt with by the directors as pcoyided in the said act and be cancelled." He said the resolution was only to bring the" deed of settlement in line with the act Mr Coffey asked what amount of the March and July calls was defaulted, and had any steps been taken to recover the amounts from the defaulters ? Mr Watson said the last time he had looked into the matter he found thafc about 95 per cent, had been paid, and quite recently he had looked at it a second time, and found that it was coming in pretty satisfactorily. Steps had been taken in some cases. As a rule those who could pay the call had done so. Some people were unable to pay, and it was no use ruining people, and they bad not been too hard. The motion was then pnt and carried, there being one or two dissentients. The meeting then concluded.