PROPOSED SCHEME OP THE HON J. G. WABD.

Star (Christchurch), Issue 5349, 29 August 1895, Page 2

PROPOSED SCHEME OP THE HON J. G. WABD.

i. resent state of B*nk of New Zealand. "A" stock, -82,000,000} shareholders* capital, .£900,000; reserve fund, -846,000; shortage of the bank, apart from the Estates Company, .6425,000. Present state of the Estates Company :— lndebted to the Bank of New Zealand in current account, -61,426,781$ indebted to the Bank of New Zealand in shares, .£1,850,000} indebted fcr debentures and bonus, £1,073,500 ; indebted for debenture interest, £26,225; total, £4,376,427. Value of Estates Company's property, allowing a further writing down of £148,110 (company's shares owned by Estates Company) from already reduced value., £2,580,746, leaving £1,795,681, say, £1,800,000. Apply to this the estimated part proceeds of call, the' balanoe of £200,000 to be applied fco contingenoy aocount against doubtful debts in the bank £150,000, leaving an ultimate shortage of £1,550,000. To provide for the defloienoy in the bank, write down tb e£6 5s shareß £3, and tlie £8 lOa shares to £_ sa. This will give, available from capital £387,500, and trom the reserve fund the balance of (reserve fund to profit and losb account) £87,500; total £425,000. Creata preference shares, £500,000, to be subscribed by the Government in fully paid-up shares of £10 each, and to be paid for by Government securities bearing 3£ per cent interest; the dividend on the preference shares to be 3} per cent cumulative. The capital then will be £2,000,000, preference shares £500,000, ordinary shares £512,500; total £3,012,600. Purchaee the business of another bank, whioh can be readily done with the funds now available. Institute an Assets Board as provided in the former soheme, for working the Assets Company. Debentures to be issued by the Assets Board to tbe bank, bearing 3_ per cent interest, and the Government to guarantee the deficiency, whatever it may be, bnt which is now estimated at £1,650,000, and for such guarantee to have security over (a) ordinary share capital £512,500, (6) reserve liability £1,000,000, (c) the profits of the bank farmed at five years, which may be estimated at £250,000; total, £1,762, 503. Parliament to further (1) revoke the Bank JJote Aot Beisßue and give the sole issue of notes in the colony to the Bank of Hew Zealand. (2) Give the bank the entire agency of the Government in London, inoluding the inscription of stock, payment of interest, _-.. (3) Give power to all local bodies to inscribe their stock with the Bank of New Zealand. (4) Prohibit the Bank ot New Zealand shareholders from winding up the bank uutil the £2,000,000 borrowed under the guarantee be repaid. J. G. Wabd. SIB B. STOUT'S PBOPOSALS. That the colony grant assistance to the maintenance of the bank, and the following be the terms and conditions, viz. :— (a) That the Government should take £500,000 worth of preference shares, bearing 34 per cent dividends, to be paid by issuing £500.000 3i per cent stock ; (b) That the shareholders pay £500,000 in calls of the reserve liability ; (c) That ths share capital of the bank be written off the deficit, that is, £1,350,000; (c.) That the balance of the ascertained deficiency, namely £176,500, plus £376,000, equals £2,141,000, lees £1,350,000 (say, to allows margin of £59,000), £850,000 to be guaranteed by the Government, on condition that the reserve liability (£500,000) and the shares (£500,000) be held as security for the guarantee, (c) That the Government business iv London be granted to the bank. (J) That no dividends be paid on tke share capital for at least two years, and not until at least a reserve fund of £200,000 has been formed, (g) That the £1,000,000 of guaranteed stock be handed to the bank for use. (h) That the bank be allowed to amalgamate, or to purohase the business of another bank, provided that no cash passes for suoh amalgamation or purohase, but that only shares be issued, and then only if the Governor in Counoil approves, (t) That the shares of the bank taken by tbe Government be recoverable by the shareholders, and that, as soon as possible, a sinking fund be oreated to repurchase the Bhares.