THE BANK MEETINGS.

Timaru Herald, Volume LVII, Issue 6066, 27 September 1894, Page 3

THE BANK MEETINGS.

THE BAHK OF HEW ZHALAND. (Bl TBIBftBA7E.iI WELLINGTON, September 26. A speoial meeting of shareholders of tbo Bank of Kew Zealand was bdd to-day to eleot five directors, About fifty shareholders were present. Mr Murray presided. Ihe chairman said that this was net the time to say anything about the bank's affairs, and tie not being a director or an offloial.they conld not oipeot him to. Ho had simply undertakes a epesial mission with regard to tho guarantee of £3,000,000, which would add strength and stability to the bank. Next, as to tbe right and duty of the Government to. appoint the president and auditor; Home people thought that; political appoint, menu would be made. He felt* confident that the Government would mako a good selection. The Government would know no more of the effuirje of the customers of the bank than they had dan^ m the p*st. It was quite erroneous to sup> pese that the Government; could know any. thing about confidential affairs. The president would only interfere to stop improper buoincsi. As to proposed amalgamation with tbe Colonial Bank, tbe ohief motive m pro moting the project was to add largely to tho ljuoinets and therefore to the profits of the bank. He believed that at first the Govern' ment were favourable to the scheme, and that some circumstances must have arisen to change their views; He proposed that tbe Hon W W Johnttan, and Messrs W Booth M Kennedy, T G Ma#o*rthy, and Biohard H Glyn, be elected new djregtors. He explained that the London. Board h^dl re« sigaed. Mr Lodder moved that the number be increased to eight. Ihe motion was not seconded. Tbe chairman Bsid that; the shareholders were liable to tbe Government for £10. Mr MoKenzio said that the shareholders of tjje bank had been very roughly treated by tbe Goyarnment. Tbe bank had formerly rendered the Government great service, and had now a right 19 expeot every consideration m return: Be failed to Be,e how the bank had drifted into its present; position, when not long since the butineis was reported to be sound. Mr Murray said that the necessity af having to apply for the Government guarantee arose from a fall m the profits not to much of the bank as of the Estates Company. There had been & fall m values, and trade was bad $ therefore £he directors found themselves UDable to pay a dfvdend, Other shareholders thought |tha£ greater information should be given. The ohairmau repeated that he w#s not there to disouss the bank's affairs. All the branohes of the bank were paying, but the position was that they were not paying enough. The bank could do twioe th« amount of business without any appreciable addition to the expense. No bank m the colonies bad faced a position such as this bank had on two occasions. He bad fixed on five as the number of chiefly on the ground of economy, and beoaux* Jarge directorate* were .undesirable. Mr Bylejr, of JDunedin, deprecated fa,ulfc« finding, bi thote who had been the cause of the bank's position wire not present. Circumstances had been operating lately which bad brought down values, and the bank was among the sufferers. He trusted that no undue hardship would bo plaood on the shareholders m the w&y of calls. He supported the power given to the Govern* ment to appoint the president tmd auditor, As the result of inquiries, he would support the board nominated by Mr Murray. Th 4 motion wan put and oarried. The Hon W W Johnßton, replying on behalf of the da-fetors, said that they accepted office determined to indict np hardship on tho shareholders. The meetiog then dosed;

| THE COLONIAL BANK. j

jDUNEDIN, Beptbmbeb 26. The half .yearly *&eeti#|j; of the Oolouial Bank was held to-day and ya» largely attended. [ The Eon George Motean presided. i . The report recommending a dividend of 7 per cent was taken as read. ' The chairman m moving its adoption said that although tho ontlook was not too pro* ■ mising, it waa pot deemed necessary to reduce I the 1 per oent dividend^ whioh had been paid , for the past 13 years, but wfeon jtljey thought of how other institutions had to i'eAuc.9 from 18 to 6 per cent, a note of warning was hardly necessary. The voluma of buainots had been fairly maintained. He then proceeded to explain the circumstances whioh ■ Jed to the proposal to amalgamate with the Baak of New Zealand. Whea the Government guaranteed tho Bank of Hew Zealand it was felt that a cruel blow was bsiog struck i at a looal institution yn providing the Bank • of New Zealand with mon^y at c, cheaper c rate than the Colonial Bank could oyp.eot to c get it at. The bank's position had been : ateadily strengthened m London and it now held there £350,000 of deposits, the due dsige of wbiou extended over five years. e < When ifce gj^rantea was given the bank wai q| exceptionally strong The Governmoot badi r been applied to for $ shore of the banking a a'coaunt.Bnd t})9 gencyal waafleer'i Jitter wib

read m whioh it was stated that there was m objection to appoint an auditor from time tc tituo to report on the condition of the bunk but they would indeed be glad if suoh wen I done* It would be Been that the bank court c ' the fullest inquiry. The tcheme for amalgamation was then prepared $ desigued to effoot the building up of a strong bank, and tha separating of doad asiets He proceeded to show the effoofc of the Bobeme, and reviewed the earning power of the Colonial Bank, The difficulties of the Bank of New Zealand and the onus m Australia, had thrown Buspioion on ull the banks. It was further foreseen that a guarantee mipht act prejudicially, and a polioy of prudence bad to be adopted. Some hundredo of thousands of the be:t business m the colony had to be refuted beoausa the bank had to puwue a conservative policy. There was no disguising the fact that tbe augmentation of the bank's oapital could now bo most advsntßgeously employed m increasing and consolidating valuable business. 'I ho proposals wore m the interests of the shareholders of both the banks end the public, Although the present sttitudo of the Government might pr6v<snt its boing carried out, the amalgamation eoheme is on record. The correspondence with the Colonial Treasurer was then read, and the chairman continued bis remarks by stating that the Colonial Bank had virtually withdrawn beoause the shareholders should Dot be adversely affected by the liquidation of tha Assets Company, and because the Government influence already provided ought not to bo increased. Mr Keith Bamsay seconded tbe adoption of the report, and expressed the opinion that the proposed amalgamation was politically bad and morally wrong. He had been glad indeed tbat the Government had put an end to the matter. Mr Watßon also spoke against amalgamation. Mr J W Bain (Invorcargill) ssid that he had come prepared to speak and oast a large number of votes against; amalgamation. 'The Bank of New Zealand might beootae the State Bank, but the Colonial Bank would always be the people's bank. The report and balance sheet were adopted. Votoa of thanks were paised to the direo* tore and officers. The chairman m replying said that the bank was the strongest iv the colony. The Bank of Now South Wales' proportion of capital and reserve fund to liabilities was 13.48 ; the Union Bank, 12.18 ; the Bank of Australasia, 15.61 ; the Bank of New Zealand, 9.43 ; tbe Colonial Bank, 17.33 (applause), and the National Bank, 12 31. Another version of Mr MoLean's speeeb,also supplied by the Press Association, is as follows : Mr McLean, m his speech, reviewed ths history o? the bank at considerable length. He explained that his directors courted the fullest oearohing enquiry, feelisg that the effect of suoh by a oompetent officer would only have the effect of materially strengthening the bank's position m connection with the amalgamation negotiations. No representatives had ever met with a more earnest desire to produce a soheme that would be fair to both parties and at the aaim time conceive the interests of .the colony, m producing a scheme whioh they were well aware would have to run the gauntlet of jealousy, party tactics and other influences' On thd whole they wero not disappointed with tho result. The scheme had been generally accepted ai giving the colony some guidance as to how difficult was the position m which late events had placed the Government, and that this might be turned to acoount by placing the Bunk of New Zealand oa a substantial foundation by giving the colony relief through tho Assets Company being taken m hand with a view to judicious liquidation, and to give the shareholders ot the Bank of Now Zealand an opportunity of putting their institution on a sound footing. The scheme wbb designed to build up a strong bank and the separation of dead assete, co that tho latter could bs handled wishout injuring the Bank's credit, Having reviewed the earning power of the Colonial Bank for the past seven years, and traced the history of tbe negotiations for a share of the colony's banking account, he said that tho negotiations for amalgamation had been broken off by the attitude of tbe Government. He said m coaolujsion that although tha present Attitude of the Govorninent might prevent tbem from geekiDff to carry it out, it was now on record, and seeing the position the Government was to occupy with the Bank of New JJjaland time wonld determine whether the proposals made were not only m the interests of the shareholders of both banks, but m those of the public, and were suoh as would have freed tho colony from the position of embarrassment which its recently assumed responsibility seemed to be likely to entail upon it. The attitude sow taken up by the Government m regard to the soheme rendered it impossible for them to invite shareholders to express their approval on this occaiion. Top directors had virtually withdrawn from the negotiations for two reasons -first because l hey could npt permit shareholders' interest* m any way to be adyersely affected by the liquidation of the Assets Company } and sfoondly beoause the Government in* fluenoo already provided for m the suggested agreement, m the appointment of president and auditors, ought not, m the directors' own opinion, to be increased by direot representation on the board,BUoh direot interference with its ordinary business being likely to affect the bank and lead to tho withdrawal of many of its most valuable acoounts. This JajStor point might possibly have been modified by negotiation— for example, by suoh a Government nominee being sworn to secrecy ; but the first stipulation was m their opinion fatal to the scheme. OHBISTOHURQH, Septbmbee 26. The Canterbury Progressive Liberal Association have passed a resolution trusting that tl\p Government will stand firm on the position tasen n» on the question of the amalga matjon of the Coloojal Bank and Bank of New Zealand, and protesting against the Government undertaking under any oiraum> stances any liability on behalf of tke Assets Company of the Bank of New Zsaland.