PROPRIETORS OF BANK OF N.Z.

Southland Times, Issue 25548, 16 December 1944, Page 7

PROPRIETORS OF BANK OF N.Z.

OPPOSITION TO STATE ACQUISITION (P.A.) WELLINGTON, December 15. More details have been made available of the proceedings of the meeting of the proprietors of the Bank of New Zealand held recently in Wellington to discuss the resolution of the Labour Party Conference which urged the Government to promote. a State trading bank by acquiring the privatelyheld shares of the Bank of New Zealand. Speakers at the meeting pointed out how entirely contrary to the public interest such an action would be. Reference was made to what happened after the Government of Germany took complete control of the main trading banks in 1931 and made commercial banking a Government monopoly. It was found that the German Government could not successfully run the commercial banking business and collapse and disaster were impending. The German Government then proceeded to sell its banking interests and extricated itself from the commercial banking business by 1938, except for one relatively small bank founded by the Government during the 1914-18 war to act as a banker to German industries. Was there any reason to expect that the result would be any different in New Zealand? Government acquisition of the Bank of New Zealand would destroy the business of the bank and whatever price the Government paid for privately-owned shares it would soon find that it had sacrificed the fine investment the country possessed today. BIG BANKING BUSINESS Speakers reminded the meeting that the bank had played a worthy part in the development of the Dominion, its operations being identified with land settlement, freezing companies and the dairy industry. It was one of the principal banks of the Empire and carried practically half the banking business of New Zealand. No good reason had been put forward why the Government should have greater control over the bank than at the present time. Already it held a controlling interest | and the right to appoint four directors I out of the six. It had not been shown that the bank had failed to serve the public and neither the financial stability nor efficiency of the bank had been questioned. Therefore, the only reason for the agitation for complete Government ownership was that inexperienced men were using votecatching nostrums in an endeavour to gain power and influence at the cost of dislocating the major portion of New Zealand’s banking trade and practice. It was also pointed out that the Government had no mandate for what it proposed to do and the suggested step could only result in increased confusion and harm to both business and the bank and further inflation. BANK’S BIG ASSETS Method Of Reaching Fair Price (P.A.) DUNEDIN, December 15 In an address at the annual meeting of the Dunedin Stock Exchange Mr Harman Reeves, the retiring president, referred to the proposal for the State to take over the Bank of New Zealand, which would ,be the largest and most important business transaction in the country’s history with farreaching effects. “The bank has been in business upwards of 80 years, has large reserve funds and freeholds of immense value throughout New Zealand, Australia and in London,” he stated. “If the bank went into voluntary liquidation it is estimated ordinary shareholders would receive anything from £3 to £4 a share from the disposal of the assets, apart from any value contained in the goodwill and banking, business.” Surely the only way to arrive at a fair price for the shares was to appoint a committee to decide the price and it was to be hoped some such arrangement would be come to should it be decided to take over the bank.