BANK OF NEW ZEALAND.

Southland Times, Volume 2, Issue 83, 21 August 1863, Page 5 (Supplement)

BANK OF NEW ZEALAND.

At a special general meeting of the shareholders of the New Zealand Bank,' held at the Bank Offices, at Auckland, for the purpose of considering the propriety of authorising the directors to make further calls under the eighth clause of the Deed of Settlement. About twenty-one shareholders were present, James Williamson, Esq., President, occupying the chair. The advertisement convening the meeting having been read, the Secretary read the minutes of the previous half-yearly meeting, which were confirmed. The Chairman said the advertisement told them what the object of the meeting was, and he would just read the clause under which the proposed authority was to be given. Clause 8 : "That the several persons parties to to these presents, shall and will severally contribute to the said original capital in proportion to the number of shares set against their respective names in manner following, that is to say, a deposit of one pound upon every share of capital shall be paid on or before the execution of the deed, and the remaining sum of L 9 shall be paid in instalments of not more than I A upon every share, at such time and place as the same may be called for in pursuance of the power vested by these presents in the Board of Directors hereinafter constituted, save as hereinafter excepted, that is to say, in no case shall more than LoO per cent, on the subscribed capital he required, except with the concurrence of three fourths in value of the | proprietors at a general meeting to be called for that special purpose ; but. if any further call or calls be determined on at such meeting, then all powers and regulations for making and enforcing the same, may be given to the directors at such meeting and at any subsequent meeting or meetings to be called for such purpose.'' Mr Buckland asked if circumstances had occurred making it necessary to make fresh calls ? The Chairman said it was the opinion of the Board of Directors, and the manager also, that a larger capital th m they were at present possessed of could be very profitably applied. No doubt the bank could go on with its present capital, but if it aspired to be really "The Bank of New Zealand," it certainly required a larger capital. Business could be very much increased in the Southern Provinces, as well as in Auckland. In fact, for some time past they had not been anxious for accounts which required accommodation, although perfectly safe, That was the only reason they had for asking for more capital. Mr D.-ildy asked the Board of Directors (0 give the meeting information as to what amount they rcccommended should be called up, and the meeting would take the recommendation of those "who were so intimately acj quaiuted with the affairs of the comi pany. Of course the calls must be by LI at the time ; but the directors should give the meeting their views as to amount of increase desirable, and the manner in which it was made, in accordance with which a motiou might [ then he made. After a pause, Mi- Lignan inquired if it was the intention of the directors to call for the i remainder of the contemplated capital or merely an instalment. If the former were the case, unless the directors exercised the discretionary power which the Act gave them, it might cause embarrassment to some shareholders under the present circumstances of thecountry So far as he himself was concerned it mattered little, but the matter should be dealt with at the discretionary power of the Directors according to the present circumstances of the county. If only one or two calls were wanted, they might be made with a proper interval between them, so as not much to afteel anyone of the small proprietors; but otherwise it might tend seriously to their disadvantage, for it was in the power of the directors to charge fifteen per cent, interest after the call became due, and if unpaid in six months to confiscate defaulter's property in the bank. Mr Nathan said those who found it needful might sell out at a profit ; but a certain notice must be given before making each call, so that none need be much affected. What he wanted to know was the amount that was required. The Chairman said the opinion of the Board was to call in as little capital as the position of the Bank Would allow. They would not like to see the Bank fall behind other Banks, when an increase of capital would maintain its position. Two or three calls, they believed, would be as much as was required, and they were not anxious to oall this in rapidly. If they made a first call in three months, six months might be given between any further cases that might be required ; but if the meeting thought three months too little, he would submit to an extension of .the time. Perhaps some gentleman would make a proposition that something be done. Mr Daly moved— "That the Directors be empowered to call up the remainder of the capital of the Bank at I not less than six mouths notice." He made this motion because he had heard what he thought very erroneous opinions expressed as to the effect the call would have on many people. It was said that many small shareholders would be compelled to sell out. That was very likely to be the case, but it must be membered that they were capitalising money on which they received no interest now. If a man sold half his shares, he would still represent the same amount of capital which he did now in the whole of his shares. He trusted,

however, that none would need to do it: but he Wished to show that it was no injury to them, but rather that they capitalised property now dormant. He did not know any more about the affairs of the Bank than others, but with an institution of this character they could not stop at a certain line and say, " we will do no more business." With the colony the bank must go ou or it would retrogade, for a bank was of such a nature that as each customer was added he gathered others. It has been found that 1/2.50,000 was already too small a capital in proportion to the trade and capital nOwin New Zealand ; what then must it be two ov three years hence ? and these calls would extend over two years and six months. At the rate at which business was increasing, the proprietors of the Bank must make up their minds either to have more capital or to lose business, for in his opinion they could not even maintain the same business on the same capital. Whatever it might do in England> it could not remain stationery iv a young colony ; and the proprietors were this daj' not so much to decide the amount of the capital to be drawn vp — for that would come from a variety of sources — but whether the bank should progress in the colony or standstill. Under all the circumstances he thought and trusted the meeting would think so too, that this bank was not to be bound to remain in any thing like a stationary position, but to a;o onwards with the increasing popu latioi), wealth, and commerce of the country. Mr Digan seconded Air Daldy's motion. Mr E. King thought the meeting oujjht not to pass hastily over this matter, because they were only a few of the shareholders. There were shareholders in every other Province of New Zealand, and the question was whether steps had been tcken to watch the into ests of these shareholders in other provinces. (The chai r man said that due notice had been given.) But the question was whether their views had been ascertained, because iv the original prospectus it had been set forth that not more than 45 would be called up. Great numbers of people had invested on the faith that they would not be called on for more than that amount. At Nelson, indeed, they had been told that not more than Lj would be required. Undoubtedly business had increased. They anticipated that, but he anticipated that deposits would also increase. The capital employed by the Union Bank in tin's colony had been very small. It had principally depended upon the deposits of capitalists in this country, and this meeting should be very cautious before they forced people to sell out their shares. There was nothing in the accounts to show that the 13ank had nor. sufficient capital. By calling up the rest ot the capital the profits would be diminished one half, and the business would not be likely to be much increased, two other banks were coming here, and no doubt would get their share of the business. It was true there would be long intervals, and the people here were prepared, but they must watch the interests of the other shareholders, at Taranaki for instance, where many would be forced to sell out, and most probably forced away as customers. No figures had been sho'vn to prove the necessity of the call. Business was not sufficient to warrant the step. Great numbers, through want of means, would be obliged to sell out, and lie thought they should be cautious in taking such a step, especially in a thin meeting like this, though individually lie was prepared to accept of the resolution. Mr Daldy said it had never been anticipated when the bank was started that the dividends and the reserve fund would be such as they were at the present time. From a variety of unforeseen circumstances the bank had been prosperous beyond the idea of any who originally invested in it ; and this was a full answer to the assertion that people were led to believe that L 5 only would oe called up. Suppose a man had ten shares in this bank, on which he had paid;Lso, he might come into the market and sell part at a high premium, and by reducing his shares have a larger amount of money invested in the bank than before, and receive interest on a larger amount. So he did not see that it pressed hardly on any one, as sufficient notice would be given, and before the first call another dividend would be declared. Many persons were desirous, he believed, of investing in this form, as safe and negotiable property, and would make every effort to pay these calls up, rather than dispose of shares so profitable as these were likely to be. It was true that the Union Bank carried on business in this colony without much capital, an I that was what created the Bank of New Zealand. But the Union Bank had large capital in other countries; and both it and the Bank of Australasia had found it necessary within the last three years to increase their capital. The Bank oujjht not to be carried on without sufficient capital; and Mr Kin_ r would find on examining the amount of discounts, cSrc, in the pist two years, that a great deal more capital would be required in the next two or three years. If they desired confidence, and desired to take hold' of chances of doing business, nothing would be more detrimenta I to the Bank than to have it said that it was without adequate capital. Mr Buckland said the shareholders had much cause to be dissatisfied with the directors for not placing before them requisite information as to what they desired. He would like to have seen a scheme laid before them, and a resolution asking what was found necessary. The Chairman said the substance*, of the resolution had been agreed upon

between Captain Daldy and himself before it was proposed. Mr Buckland did not know anything about, that agreement. He had tinderstood that what was to be proposed was a scheme for increasing the number of shares, aud not calling upon the present shareholders for more capital. He did not much value the objections raised by Mr King, as a shareholder having L'ooo in the Bank, could, if he wished, sell out part, so as to have just LIOOO invested. (A shareholder remarked that the profits would be lessened.) He was sure the proprietors would soon have more money than they knew what to do with, for their business would be increased while the country settlers would be impoverished. He held, however, that the affairs of particular shareholders ought not to interfere with the general prosperity of the concern — (hear, hear) — and if the directors required more capital to carry on business with, the shareholders should throw no obstacles in their way. The only question was as to amount and time. The Chairman had said he believed that only L 2 or Lo would be required, but Mr Daldy'e motion included the whole amount. Mr Daldy said it was thought that the reserve fund would pay up the last £2. Mr D. Graham did not think the call would be productive of any hardship. The next dividend would pay half of the first instalment. They wished to have this bank the Bauk of New Zealand. Another bank was being formed in London, with a capital of L50(),000 and of course they wanted to be on equal footing with it, and would be so with an increased capital. Most people would know that if they could invest a larger capital in their ] own business the profits would be increased, and so they would of the Bank. An expensive stalf took up a large portion of the profits, and an increase of capital would add to their profits without increasing their staff, so that if with L 25.000 they made twenty per cent profit will) L 50,000 they might expect 40 per cent. Two calls would be all that would be necessary, and a third might be taken out of the accumulated reserve fund, and then they would be capitalising instead of calling up; so that he thought the thing was not only practicable but would induce others to buy when they got the chance. The Chairman said that the directors would have been attempting to set. aside the 13t.1i clause of the deed of settlement in calling for an increase in the number of shares, as desired by Mr Buckland ; and what was that clause put in the deed for if they intended to bind themselves to Lo ? lie would ask Mr Kins: if he had had any expression of opinion from the South against the proposed measure. He himself held proxies from the South, representing 0000 shares, in favor of the increase. Instead of a disadvantage it would be a great boon to Taranaki, as it would enable the Tarannki people to capitalise to the fullest extent the money which they had now lying idle. The capital of the Union Bank had, within the last two or three years, b^ en increa>ed from LBOO,OOO to L 1,000,000., 000,000. The resolution was put and carried ncm. con. The draft minutes having been read, the meeting separated.