The Timaru Herald. WEDNESDAY, SEPTEMBER 26, 1894.

Timaru Herald, Volume LVII, Issue 6065, 26 September 1894, Page 2

The Timaru Herald. WEDNESDAY, SEPTEMBER 26, 1894.

liT length the country has definite inprmation as to what the Government think of the bank amalgamation proposals which were contained ia the joint letter of the Hon. George McLean and Mr John Murray, dated the 11th instant. The Government have been pressed by members of the House to declare themselves earlier, bat considering the magnitude of the interests involved, we do not think that there was unnecessary delay. The letter of the 11th was answered on the 22nd ; then there was some further correspondence, and the whole of the letters were laid on the table of the House on the night of the 24th. We mention the dates aB the short interval between the first and the last of them is sufficient to relieve the Government from charges of procrastination and a desire to keep back important information from Farliamect. Our first impression was that the proposed amalgamation would be a good thing for the colony, but it was, of conrae.impossible for us to thoroughly investigate the subject, or to say at a glance that the details of the scheme proposed by the representatives of the two banks concerned should be acoepted without modification.' Opinions on that puiuu aixcuica vnj i.id^lj, U^.v it t o worthy of remark that newspapers of such acknowledged standing as the New Zealand Bcrald and the Auckland Evening Star both favourably criticised the scheme as formulated by Messrs McLean and Murray. The first-named paper expressed the opinion that, as far as the interests of the colony were concerned, the scheme would be advantageous : — " The colony's liability is not augmented, but is rather decreased. In regard to the details of the scheme, as between the two inetitu. tions, they seem fair and equitable." Oar other Auckland contemporary spoke highly of the scheme, bat thought that the responsibility of the State would be increased. Some of the other large newspapers alsa favourably criticised the scheme. On the other hand, there was a good deal of hostile criticism, and within the walls of Parliament the feeling against the scheme gradually grew stronger, and it was feared that the Government might hastily commit the country to a compact which could apt well be rescinded, and would not stand the test of time. Now that the correspondence has been published, it is no more than bare justice to admit frankly that such fears were without foundation; that, at all events, is our deliberate judgment. The Colonial Treasurer's letter of the 22nd instant proves that the Government gave the scheme the most earnest careful consideration ; and the statement which he made when asking leave to lay the correspondence on the table will probably be endorsed by a large majority of the more intelligent portion, of the community. In short, it is self-evident that the scheme was earnestly considered (as far as information was available), and that the conclusions of the Government were arrived at solely with a view to safeguarding the interests of the colony. Instead of accepting the scheme jest aB it came from the hands of Messrs McLean and Murray, the Government insisted on some moßt important modifications, all embodied m the Colonial Treasurer's letter of the 22nd September. Firstly, such legislation as might be undertaken to enable effect to be given to the scheme was to be of a purely permissive character. Parliament was not to be asked to take any final step, bat simply to sanction the scheme contingently on the fullest investigation into the accounts and assets of the two banks showing that amalgamation would be safe and advantageous to the colony. Secondly, that investigation waß to be conducted by a special representative or representatives of the Government, independent of either bank. Thirdly, the shareholders of each bank were to be responsible for, and to make good all losses arising from existing business not passed by the colony's representatives. Fourthly, a most important modification was introduced with a view to protecting the colony from loss m connection with the winding up of the Estates Company. Fifthly the Government were to nominate the chairman and two directors of the Estates Company, and the Bank of New Zealand to nominate two other directors, the board so constituted having fall control over the £1,500,000 Qf uncalled capital of the Bank of New Zealand shareholders. Lastly, a modi-

fication was introduced by which the Government would appoint one director E to the combined bank, m addition to n .having the appointment of the presi- p dent and auditor of the Bank of New a Zealand, the latter arrangement being amongst the provisions of the Bank of New Zealand Share Guarantee Act, c 1894. Such were the modifications introduced by the Government into the scheme submitted to them, and it is hard " to see how they could have gone further l m their anxiety to safeguard the colony. They at least went bo far that neither c Mr Murray, on behalf of the Bank of New Zealand, nor the Hon. George McLean, on behalf of the Colonial Bank, would consent to recommend to the shareholders of their respective institutions the whole of the Government modifications, though each was willing to yield to a certain extent. The Colonial Treasurer, however, m his final communications declined, on behalf of the Ministry to draw back m the smallest degree. Thus the correspondence closed. The two meetings of shareholders will be held to-day, and the result of their proceedings will be looked for with the keenest interest. The general impresBion appears to be that neither body of shareholders will accept the Government modiications m their entirety. We regard it as certain that the Government will give up no point m the Colonial Treasurer's letter of the 22nd instant. We believe that all the parties to the negotiations have spoken their true and final intentions. There has been an honest effort at agreement, and it has failed. If that is really the situation, all thought of amalgamation must for the present be abandoned, m which case it is much to be regretted that the question was raised at all. There have been rumours and even direct statements that strong disagreements took place m the Cabinet over the proposals for amalgamation — that the Colonial Treasurer would have accepted the scheme as it was formulated by Meßsrs MoLean and Murray, but that the Premier, being alarmed at the hostility displayed m so many quarters, insisted on the chief modifications m order that the affair might drop through. Against all such talking there is the emphatic statement of the Colonial Treasurer when he laid the correspondence on the table, that there had been no strained relations between members of the Cabinet, no difference of opinion between himself and the Premier, " but they bad been m absolute accord m what was done by the Government." We see not the smallest reason for doubting his word.