BANK OF NEW ZEALAND.

Star (Christchurch), Issue 5356, 6 September 1895, Page 2

BANK OF NEW ZEALAND.

THE LONDON SHAREHOLDERS.

STATEMENT BY THE COLONIAL

TREASURER.

In the course of an interview with a representative of this journal, the Hon J. G. Ward said that his attention had been called to the cable meßaage from London, published yesterday morning, stating that the London Shareholders' Committee demanded that the bank shall go into liquidation, and denounced the statements made by him in London.

On be,ing asked his opinion of the matter Mr Ward said : I sympathise very jrrently with the shareholders of the Bank of New Zealand, both in England And the colonies. My desire has been to snow them all the consideration that was possible in trying to put the position of the bank on a Bound basis. It U only natural that the London shareholders, who have not yet received the full scheme, Bhould feel aggrieved at being called upon to contribute further. Until they do receive the full scheme, however, they cannot be in a position to properly judge whether the proposals are in the general interest of the institution or not. As a matter of fact, the course suggested by them, of putting the bank into liquidation, is, on the face of it, absurd. Even if they could give effect to such a proposition (which I feel sure the common sense of the majority of the nhareholdera will be entirely against) it would eatail upon them 'he paying up of the whole cf the reserve liability without any advantage whatever to them; whereae now they have for the first time since the creation of the Globo assets a complete severance of the bank from the mills tone, that has hung around it for bo many years and haß bo fearfully handicapped itß general business. As the result of the legislation which haß just been passed, the shareholders will have, at any rate, the reversionary value of their property, and, that must be materially added to in consequence of the \ purgiug that has now taken place. Obviously the London shareholders cannot have considered the reeult of such a proposal as is indicated by the cable message. If their view were a correct one, and could be given effect to, it would mean the' com-' plete depreciation of the value*, not only of the Estates Company's properties, but of all the assets of the bank itself. It scarcely requires a second thought to demonstrate that the passing through a prooesß of liquidation of bucu an enormooi concern as this would deteriorate the value, not only of itß own properties, but that of those of every person in the country; and the natural result would b<v eb I said before, that the whole of its available capital would be required to be called up from the shareholders, and notbintr whatever would be gained 'by them* Regarding the portion of the cable'message which states that the shareholders condemn my statements in London,' I am not prepared to aqcepfc the necessarily brief outline of a cable message bb a fair indication of what may be the opinion of the London shareholders. I prefer to believe that they can trust me, as I know they would have me trust them, and consequently that they would await the receipt of the full scheme, and hear what my view is before arriving at hasty conclusions. As a matter of fact, I did not attempt to mislead them, or to make any jnisßtatements concerning the bank of New Zealand when I waß^in London. In an interview with the shareholders of the bank I was asked whether a further call would be made, and I informed them that it was impossible for me to say whether a call would be made or not, but that, in my opinion, it was unlikely. This was my distinct opinion at the time, and from the information then at my disposal I believed this to be true. The Directors themselves, had no idea thai a further call was probable, bb is to be Been from their report to their shareholders in February last; and it was upon the report of the Directors that I formed my opinion. Since that report was placed before the shareholders the position has materially changed.' The information since obtained was not obtainable by either ihe Directors of the bank or myself previous to my leaving London for New Zealand. In the interval, the report of two of the Directors of the bank, who have personally visited all the Estates Company's properties throughout this colony, haß been, received by the Directors. .The report of another Director, of, the Bank, who. was specially sent to Australia to personally investigate the position of affairs there has also been laid before the Directors. The head office of the Estates Company, with the whole of the books and documents, has been transferred from London to Wellington; and the General Manager of the bank has visited London and investigated the whole of the business of the institution there. The result of the investigations ' which have taken place, based upon the information furnished by the Dir? ctora and the General Manager, and of the investigation into the position of affairs since the transfer of the head offico of the Estates Company to Wellington, was the cause of the recent joint committee beipg set up to inquire into and report upon the position of tne Estates Company and the bank. >, It has token the Directors and the responsible onicera of the bank ■ very aearly twelve months' close and hard work to Ascertain the actual position, and lam quite Certain that the result of their inquiries' i was as great a surprise to them as it was to everyone else. While I sympathise sincerely with the shareholders of the bank, I decline to be placed in a false position by them, so far as any statement I made in London. I told the shareholders at the interview r had with them all that I possibly could. I v aß perfectly open and frank in every matter r discussed with them — which thoy one a. n <i all act knowledged at the time. Had I supposed there waß any probability of a further call being made I should not have hesitated to have told them so. Thefaot must not be lost sight of that the earning power of the Estateß Company has during the last year been seriously reduced, owing to the unprecedentedly low prices of the main products of this and every other country. To a large extent this is responsible for the heavy writing down that it has been found necessary to effect. The only true way to value the Estates Company is upon ita actual earning power— that is the basis upon which the Estates Company must now be valued. Naturally, I have had a very great deal of anxiety over the whole business. My natural desire is to have the best possible results obtained, and I believe the remedy proposed, which is the outcome of the labours of a representative committee of able and experienced men on both Bides of politics, will be effectual. It is beyond question that the result of this will make the bank itself one of the most powerful institutions in Australasia.