SHUT OUT

Poverty Bay Herald, Volume LXI, Issue 18323, 15 February 1934, Page 6

SHUT OUT

RESERVE BANK CAPITAL -1 BENEFIT FUND BARRED “NOT A BRITISH SUBJECT” In the rush of applications for shares in the New Zealand Reserve Bank there have developed some interesting sidelights, including one affecting a large number of applicants on behali of funds held in trust. A Gisborne case which illustrates this point will be of general interest, as it had the effect of causing the withdrawal of an application on behalf of a fund contributed to by a large number of employees in a local firm.

The fund is administered by three trustees, and is of a class which, presumably, would be especially acceptable to the Treasury as ait investing source. An application for the investment of a substantial amount on behalf of the fund was made’ to the Treasury, in the name of the fund, but yesterday a telegram , was received, from Wellington indicating that tile application could not be received, as the fund was not recognised as a British subject. The Treasury note included the following statement;— 1 ‘ Fund ineligible hold shares; allotment will be made only to British subjects, a term tjfiife inapplicable to a fund or other body." It was indicated,. however, that the application would be reinstated il made in the name of one individual. It. being considered inadvisable to name one of the trustees as the applicant, however, the application on liehalf of the fund was dropped; the trustees being influenced partly by the fact that so many applications are known to have been made that only n small proportion Qf the amount offered from their fund was likely to be accepted as share capital in the new bank.

While the conditions of application have been drawn with a view to the long-term investment of trust funds, it is laid down that applicants for shares must be British subjects who are ordinarily resident in Now Zealand, or who, having been so resident, may at the tirPe of allotment be temporarily out of New Zealand for the purpose of their business or for other sufficient reasons. It is further indicated that, in order that as many as possible may have a direct interest in the Reserve Bank as a national institution, nllotment of the share capital will he distributed as widely as possible over the Dominion, and to the greatest number of applicants. In consequence of the explicit interpretation of the condition as to British citizenship, however, the. possibility of at least 26 private individuals and wage-earners in Gisborne being interested in the bank has been lost.

Sharebrokers report. that the Reserve Bank shares are in exceptionally keen demand, and that it is unlikely that any individual applicant will receive the full number applied for, though possibly the smaller investors will be given some special consideration.