THE COLONIAL BANK LIQUIDATION.

Otago Witness, Issue 2660, 8 March 1905, Page 13

THE COLONIAL BANK LIQUIDATION.

THE OFFICIAL REPORT

The following report on the liquidation of the Colonial Bank, by the Official Assignee in Bankruptcy (Mr C. C. Graham), has been forwarded to his Honor the Judge, in terms of "The Companies Act, 1903": — /

The agreement of sale executed on the 18th day of October, 1895, by the Colonial Bank of New Zealand as the selling bank and the Bank of New Zealand as the purchasing bank provides by clause 2 of that agreement that the balance sheet of the Colonial Bank of New Zealand- dated the 31st day of August, 1895, shall be considered as the basis of the contract entered into between the said uaxties. Subsections A, B, and C of section 25 of the said agreement provide as follows: — (a) That tfie balance sheet made up to the 81st day of May 'last in London, and up to the 31st day of August in New Zealand, contains a true statement of the position of the Belling bank at those dates, except as any variation thereof appears in this agreement. (b) That all items (not included in the *"A,"""3," and " G'' lists, and any securities held for the accounts therein) submitted to tha purchasing bank during the negotiations for the sale and purchase were of the value which, they were represented to be, but the landed property and bank premises appearing in such balance sheet shall be taken at the values appearing in the said balance sheet. The furniture and stationery mentioned in the said balance sheet, after deducting an allowance in respect of working the business in London, has been assessed at £6250.

(c) The accounts in the "A " and "B " lists, taken over by the purchasing bank, ■which have not in ths meantime been paid off or reduced, shall, at the time appointed for the transfer of the business, be in as safe or substantially gooc!i position, having regard to the nature of the accounts and the circumstances of tHe debtors, as they were respectively in on the 31st day of August last.

Tiie balance sheet shows the balance ofassehs over • liabilities to be £484,980, to •whioli was added £75,000 for goodwill and £6972 representing various items of adjustment — total, £566,852 ; but this was reduced in terms of the agreement by £3467 written off furniture and stationery, and £102,274-, the amount of the "D" list of accounts not included in the purchase. The cum thus deducted was £105,741, leaving 1 the amount of the face v*.lue of the consideration £461,211,- from which was deducted £327,305 as a reserve against accounts in the "B" and "C" lists, pending the. taking over, realisation, or adjustment of such accounts.

The balance, £133,906, was paid in cash by the Bank of New Zealand to the liquidators of the Colonial Bank, as provided by clause 3 of the agreement. From this sum must be- deducted £2113 9s Id, salaries due to Colonial Bank officers at date of Jiquidation ; £17,631 2s 7d, costs incidental to realisation and the liquidators' expenses ; and £2624- 8s lOd, out-paym&nts in excess ©f recoveries ; leaving £111,536 19s 6d for distribution to shareholders, who have received £111,454 Is 7d, in two dividends of 10s and Is l|d respectively. Against the 'balance (£B2 17s lid) now in hand there are claims for storage of books and accountancy ices. In aijdition to this there remains at, the credit of " dividend accounts" at the -ink the sum of £159 8s 9d, representing ' ! vid-ends due to several shareholders whose - ""o^bouts I b'vf !*■"■<» n unable to dis-

account in tlis "* (J " list which was mace the subject of special investigation — namely, the- Ward Farmers' Association of New Zealand (Limited), for which a separate liquidator was appointed, — calls for special remark. The amount owing to the Colonial Bank on the 20th June, 1896 (the day on •which the official liquidator took over this estate), was ' £86,757 (including debentures issued, £40,000). This dees not include two sums which were paid by the liquidators cf the Colonial Bank some considerable time

after the date of liquidation and debited to the association — one a sum of £5149 paid in respect of Brooks and Co., and the other a sum of £9800 in respect of Connell and Co- These sums were paid after litigation between the bank and Messrs Brooks and Connell, and were not paid by or through the liquidator of the association. Nor does the above-mentioned total include the sum of £2195 subsequently debited for past due bills. The total amount realised by the~ liquidator ofetfae association was £83,543 lls Id. The expenses of realisation and liquidator's costs amounted to £14,412 12e 3d, leaving a balance of £69,135 18s lOd. which •was paid to the liquidators of the Colonial Bank, and out of this sum the debentures for £40,000 were paid in full. Further recoveries from other sources increased the amount elf £69,135 18s lOd by £2752.

The total amount of the "A," "B." "C." and "D," lists amounted to £1,731,549, as follows: — "A" list £926.198 "B " list, comprising 141 accounts 604,695 ** C " list, comprising 3 accounts . . 98.382 *D" list, comprising 117 accounts 102,274

£1,731,549

The total loss on the 261 accounts in the "B," "C." and "D" lists and out-pay-ments under clause 25 (b and c) of agreement amounted to £432,206 8s lOd. This, with £*5113 9s Id salaries to Colonial Bank officers, £3467 Is 2d written off furniture and stationery account, £17,631 2s 7d costs of realisation and liquidators' expenses. makes a total deduction of £455,415 Is 8d from the face value of the consideration (£566,952 Is 2d), as per clause 3 of the agreement for sale, leaving . the sum of £111,536 19s 6d, previously referred to, and ■which has been dealt with in the manner al r eady described.

I find after careful consideration, that it iwould not be possible to give the results of ""losses on individual accounts without necessitating the investigation of some 261 separate accounts, and to point out the difficulty that such a, course -oresents I may state that 141 accounts in the "B" list, which were taken over nine years ago by the Bank of ?few Zealand, represented a loss of £268,933. This amount is made up of writings of? individual- accounts in sums varying from £6 to £20,000. To follow such operative accounts obviously presents many difficulties, end, in my opinion woxild serve no good piirpose. I attach a statement of accounts showing the .position*

C. C. Graham, Official Liquidator.

"A." THE COLONIAL. BANK OF NEW ZEALAND, IN LIQUIDATION. Assets as per Balance Sheet, 31st August, 1895.

STEWART JSLASP NOTES. (Fjiom Our Own Cokekspondext.) HALF MOON. February 22. We have had another *" Neck " dramatic entertainment, the comedietta "Borrowed Plumes " being played in a manner creditable to ' the plucky combination. Stage gearing was, virtually speaking, an unknown quantity, but by a variety of shifts and devices the d-afect was ■ overcome. D.ck Mizzle, a masher, was attired in a suit of jerseys striped and counter striped in all th« colours of the rainbow. The part was sustained by Mr R. N. Burns in excellent style. The other parts were all played" up to a creditable standard — the vi animous verdict being that since its first appearance the troupe had made a pronounced advance. The musical portion of t-he entertainment, consisting of songs, duets, etc., was likewise successful. " Killamey," •.■.s sung by Miss King, elicitedi an imperative encor-e. -The poi dance of the Maoris was i.eatly executed by Misses Fyfe and S. Wixon. These were the principal items of the programme, and, altogether, a happy eMi-ing was spent. The funds were devoted to th© purchase price of an organ for the Church of England and other services at The Neck It is satisfactory to learn that only a few shillings of the total required now remain unprovided for. ArT exceedingly healthy tone pervades trade on the island in all its drenches. The sawmills are as busy as they can be. A shipload of timber per vsek :s the average that goes out of the iiii t->fct ->fc alon-e since the first of the year, and yrt Mocks are accumulating. The carrying trade, po far, is confined to the s.s. Rose Casey. At the South Arm mill a goodly sized engined craft is in course of construction. It will, it is expected, be ready for next season's traffic. Fisher folks are doing an excellent stroke — "takes" amounting to a t-on and a ton and a -half per boat, in two days' work-, being named. At that rate there should be some excellent cheques to cash at the end of the month. The vs inds have been light, and the crafts have managed to keep moving around, and no great complaints are made on that score. The flaxmill at Mason's Bay is undergoing repairs. Its motive power has hitherto been derived from water. The

fluid itself is plentiful enough, but trouble and interruption have been experienced getting it stored up. The soil is largely composed of sand and non-adhesive substances, the result being ihat the dams are constantly getting washed out, and the work brought to a standstill. To remedy the evil a steam engine has been secured. It was sailed down to the bay .n the ketch Anna, ar.d, together with its accessory bearings, is now getting fitted up. The mill in other ways works we-11. and the locality being amply provided with the flax plant, the settled opinion prevails that Mason's district will in time become^ a flax mart of importance. Besides Mason's Bay. there are fine stretches of land-locked waters at Easy Harbour and other parts south from the bay. This 'season's tourist traffic has been most erratic. The abominable weather which prevailed more or le?s until the end ot January caused the season to be Ifcte in opening-. It was not until about the Chrjstmas holidays that it could be said to have made a move. The New Year visitors r- ere about an average lot — if anything, below the average. As soon as they were fairly disposed of the trade fell off lamentably, and for a time the island seemed all but denuded of summer visitors, and the up-talje of the weather revived things in that way. On Sunday a large party of mainlandors reached the inlet, followed by another large boating partj' on the Monday. Indeed, appearances go to show that, if the stason was late in opening, it is likely to be late in e'.osing ; so that in the long run onemay counterbalance the other. Meantime the steamer communication with the Bluff has been reduced to a single trip per week. Indeed, the island is far from being w*-ll served in this matter, and it is sincerely to be hoped some more effective arrangement will be made for the future.

February 27.

The Land Commission, on tour in the south, visited the island, arriving at Halfmoon Bay. per s.s. Theresa Ward, on Saturday last. It held informal meetings during the afternoon and eiening, apparently with the ■view of sounding the opinion of residents and gaining information relating to objects of the commission. A stiong, perhaps unanimous, opinion was expressed 111 favour of the freehold, and local information was elicited as to settlement and the resources of the island. Reduced to a minimum the latter sums up as f ollows : — The island is, say, 42 miles jn length from north to south-west. Its area is estimated at 640 square miles. The eastern side of the coast is deeply indented by Paterson Inlet, penetrating halfway across the island, with outstretched arms, north, south, and south-west, so that the interior is rendered navigable in every direction by the magnificent waterway. At the head of the inlet a swamp valley, but slightly elevated above high-water mark, extends across the island to a point between Ruggedy (on the west coast) and Mount Anglem Ranges, where it is abruptly closed in by low hills. Six miles from the inlet head a break in the hills on the southern side of the valley leads into Mason's Bay. where a large extent of flat land of good quality is shcltei-ed from the sea by hills of blown sand, now more or less covered with a low forest, in some places advancing inland. Fiom Mason's Bay a, considerable extent of undulating tablelands extends southwards to Pega«\is at an elevation of 1200 ft to 1700 ft. Northwards the country is much broken and rugged, culminating' in the lofty Mount Anglem, 3200 ft high. In its lower part the valley is traversed from east to west by low ranges of sandhills from 3ft to 6ft high, which, in many cases, run parallel with et>ch other for two or three miles, and are covered with a scanty vegetation. With the exception of the valleys mentioned and the elevated tablelands south of Mason's there are no tracts of level land. The country is more or less broken and covered with forest. Much of the soil is peaty, and not by any means well suited for general cultivation. Where the peat is mixed with sand introduced grasses have boon grown with little trouble. At Halfmoon, Hor£e.-hce, and Port William the soil is feitile, and introduced grasses are easily grown. South of Paterson's Inlet, at The Neck, a large acreage of excellent land lias been cultivated from time to time by the Maori population. The steamer lemained overnight at Half moon. Early pext morning the commission started on an inspection tour up the inlet. At 7 a.m. the steamer was sighted off the north shore, at Ulva Isle. E\idently the commissioners must have been deeply impressed with the aspects of this romantic island, as a few hours later they were seen retracing their course of the early morning, and again making their way round by the north shore. I am not the least astonished at this seeming preference for these picturesque parts. Its off-shore rock -norks are perfect in the fantastical, and its numerous small bays and inlets beautifully encircled with sand beaches. Nothing grander in the seascape line could be desired. With reasonable concession made in the way of communication these cnarmin<r retreats could be brought as it were to the doors of Dunedin "and Invercargill residents, besides being made perfectly accessible to the world at large. It was views analogous to these which induced Professor Kirk to wrjte as far back as the year 1884 : " The equitable character of the climate, especially in sheltered inlets of the sea. is so conducive to health that in a few years it will doubtless attract many residents from amongst the -wealthy merchants of Dunodin and Invercargill. The shores ot Paterson Inlet, Pom William, Horseshoe Bay, and similar localities, will be dotted v, ",th villas, relieved by the crimson glory ot the rata and the pale racemes of the aicanai." Welcome intelligence has been received that lapsed votes amounting to £2400 have been replaced, works representing the amount to be undertaken not later than the 31*t prox. Under reasonably good auspices that expenditure can be made of immen=e service to the island. A great deal of doubt, however, appears to exist as to how far past expenditure has been quite judicious. I have heard a good deal about a system of drainage at the head of the inlet, the utility of which is, to say the least, doubtful. * The execution of the work is likewise impugned, and altogether it seems the reverse of a popular undertaking. I am ignorant of the myself, and am only speaking from the be-t information I am able to glean at second hand. Still, I can understand these complaints are not without foundation. Apart from its utility, it is work in an outlandish place, which under the be<4 of circumstances can only be made available to the very limited population resident at Mason's Bay. More pressing works are to be found, and this

drainage scheme might without serious inconvenience be left for the present. Seeing that the expenditure comes out of public money, apart altogether from local taxation, it would be well that a schedule v works showing- the. utility of each undertaking should bo furnished to, and, after careful consideration, approved of by, tho Government. I have no wish to see tho functions of local government abridged, but it is well known that in isolated places like Stewart Island these administrations are apt to drop into grooves not at all beneficial to the public interest. One work shorn I not under any eircumsranco be omitted — the erection of a" shelter shed on the wharf at Halfmoon Bay At present there is no place where goods or personal effects can be stored for the briefest space of time. Everything is huddled out on the wharf, where it lies exposed to all kinds of weather, until the owners find time and convenience to carry it away. In a place like Halfmoon Bay, where porterage and vehicular hires are not to be had, delay of this nature becomes most vexatious — indeed, they have given rise to a system of petty pilfering which is becoming well-nigh unbearable. The arrest of the birth rate may possibly turn out to be of wider range than we have been made aware of. I am not sufficiently versed \o go into the- question scientifically. All I profess to do is to state facts brought under my own observation. Generation in the rarest of our native flora is proving an absolute failure, and their seedlings are- " duffcring out." They flower in a way, but it is all mere fluff, with hardly a grain of seed to the handful. These deficits are more particularly applicable to the olearias, but other plants after their kind are making similar default. The hardy, robust rata, never previously known to shirk duty, has this year been making a very poor show— indeed, it would be quite fair to say it has made no show at all. A few faint blushes of no extent have sprinkled the .bush inland, but the fine blaze of crimson which was wont to arras the most magnificent cliff scenery of the foreshores has been conspicuous by its absence. _ The famed Ulva Isle, the rockwork of which is quite up to the highest standard of rock cobbling-s, has hardly produced a crimson blade, and so far as is known its numerous faces are in the same position. Heretofore, at this time of year, these " faoc= " have been simply a glory in creative power so the disappointment will he readily grasped. One result is that the lcakas, which follow these blooms, have given the place " wide berth," although it was noted that the few captured specimens were fairly well in condition Against the aforementioned back-dray the flax bush, falls to be named. It has bloomed to perfection, a thing it has never been known to- do within memory of the oldest resident. "The tainui, .transplanted from the North Island, after what indicated a promising start, has completely died out. What renders this more remarkable is, that transplants from the island are reported as healthy. Olearias have also been transplanted to the mainland with but indifferent success. They thrive best in positions exposed to the ocean, and it is thought a little salt used in watering ~them might prove beneficial.

Cash— Coin, bullion, and cash balances at bankers Government securities, consols, etc Notes of and balances due by other banks Remittances in transitu and awaiting maturity . . . f Money with London bankers at cr^ 1 and short notice . . Landed property anci bank premises Bank furniture and stationery Bi'ls discounted and all other debts due to the bank comprised in " A," '" iJ," " C," and "D " lists £363,087 7 168,131 1 9,589 14 548,762 4 45,000 0 125,399 15 9,717 1 1,731,549 8 Total £3,001,236 12 Liabilities. Cash— Notes in circulation . . £ 107,367 0 0 Bills payable and other securities 457,887 14 7 Deposits .. 1,947,921 13 5 Balance due other banks 3,080 1 7 Balance of liabilities Add : Goodwill paid by Bank of New Zealand Differences adjusted) assets over £75,000 0 0 6,971 18 4 £484,980 2 ll L 0 81.971 18 '. 4 £566,952 1 Less : Amount written off ■ furniture and stationery as per agreement £ 3,467 Amount of "D " list not taken over by Bank of New Zealand „ .. 102,274 1 0 3 0 £105,741 1 2 'ace value of consideration as per agreement of sale, 18th October, 1895, Clause 3 £461,211 0 0 Amount of reserve on "B " and "C lists for doubtful debts, as per agreement . . 327,305 0 . 0 Amount of cash paid by Bank of New Zealand, as per ■ agreement £133,906 0 Recoveries on " B," " C," and " D " lists, and receipts from other sources 125,335 13 0 1 £259,241 IS 1 Disbursements by Liquidators of the Bank and Official Assignee. Salaries to Colonial Bank officers up to date of liquidation . . £ 2,113 9 1 Liquidator of Ward .Farmers' Association, for stipervision . . 400 0 0 Law costs 5,918 11 Travelling expenses '433 5 5 Bank of New Zealand, adjustment of rates on properties .. 521 4 1 Advertising 39 13 6 Unclaimed balances, per Bank of New Zealand 27 1 8 Cables and charges 7 0 0 Petty cash, stamps, telegrams, etc 143 0 0 Office and bond rents, and sundries 752 1 S Liquidators' remuneration . . 8,069 1 3 Do clerks and wages 1,320 13 6 Payments with respect to " B," " C," " D," and other accounts, and items covered by clause 25 (b and c) of agreement . . . . 127,960 611 £147,704 18 Salance available for distribution £111,536 39 6 'o first dividend of 10s per share £100,000 0 0 !o second dividend of Is l|d per share .. .. " 11,454 1 7 'o cash in hand 82 17 11 £111,536 19