BANK OF NEW ZEALAND.

Star (Christchurch), Issue 5357, 7 September 1895, Page 7

BANK OF NEW ZEALAND.

MEETING OP SHAREHOLDERS. LPeb Pbebs Association. I WELLINGTON, Sept. 6. The adjonrned annual meeting of the Bank of New Zealand was held in the Chamber of Commerce this afternoon. Mr Watson, president of the bank, occupied the chair, and eJborft thirty shareholders were present. The President having explained the position of affairs, concluded by moving the adoption of the report and balancesheet. The Hoa W. W. Johnston seconded the motion. In answer to Mr Blanchard, the Chairman stated that the adoption of the report i bound them to writing off the bad debts i mentioned in the report. I The motion was put and carried withi one discussion. Major Messenger asked what the goodi will of the bank meant to shareholders, aB i they did not know what they had to look forward to. When he took' shares they i were in value, for which he gave over .£2O, and he understood that he had to , find £10 and no more. He wantnd also to i know, as the bank had been declared in Parliament to ba solvent, how it was : necessary to call on the reserve liability He noticed that Mr Ward, in the morning paper, stated that tho shareholders would ( have a reversionary interest in the property* It appeared to him that they as 1 shareholders were there Birnply as a matter of form, as Parliament controlled all they 1 did. [ The President aaid that the shareholders ' had active power, as they appointed their ' directors, but Parliament had a power of veto which was only right in consideration 1 of the guarantee. • Major Messenger explained that he was 1 nob antagonistic, but desired information. The President explained that tho goodwill was the reversionary interest iv the 1 bank, which would come back to the shareholders when the whole deficiency on the 1 Assets Company was cleared off. As to the reserve liability, what Major Messenger had said was true before tho Act of 1894 ' was passed, but the Acb of 1895 had ' altered the position. 1 . Mr Blanchard, in giving utterance to his 1 view 3, said that he thought that they were 1 those of others present. He had placed' these views on paper, and, in reply to a : remark by the President that he was not | talking to the motion, Baid that he would finish by moving a resolution, but if the shareholders did not desire to hear him he would sit down. The speaker cdmplained ■ bitterly of the action" of the Directors in retiring from the . position taken I up at. the last half-yearly meeting as -to i the Assets Company. When in February a number of the shareholders desired i investigation into the Assets Company, ■ they were sat on; yet they placed the . same information at the disposal of a . parliamentary committee. He aoknowi lodged that slight alterations were necessary in the Act of 1894, as the second million, was so placed as to have to be i invested at a loss. They knew that ' .£750,000 of debentures were only redeemed iv May, and no one expected that, with the low prices of staple products, the , bank would make a profit for the halfyear ending March 31. Yet they placed . the affairs before a Joint Committee of both Houses, not one of whom was a t shareholder in the Bank of New Zealand, i while one was president of an opposition bank and tili lately the employer of the President of the Bank of New Zealand. Though shareholders had asked for an investigation, thiß was refused, and now an attempt was made to show as darkly as possible the management of previous directors, in order to make their own look brighter. What; was tho . moaning of the sentence in the President's laßt year's speech, that "we are satisfied that when , this call is paid no further call will be necessary "? The President pointed out that Mr Blanchard had omitted to read the whole sentence, which said : " Provided we can work on the linea we have laid out for ouri aelveß." Mr Blanchard did not think it was necessary, and said that the position was that they could not trust the present Directors any more than their predecessors* He complained that at the previous meeting the Directors had refused to answer questions or give information, and compared this with their action in granting the information to a parliamentary committee. A short time ago he had called at the bank for information as to the land tax payable, and was asked by the President what he wanted it for. He was told then he would soon see legislation that would ease his mind. He Btated that the total savings of the bank would be £96,000, made up mainly as follows .—^16,000 in working expenses, .£13,000 in salaries and honorarium, jMO.OOQ in debentures paid off in May, and £IX,OOO by replacing 5J per cents for 4 per cents. Considering these savings, the action of the Directors could ; only be described as contrary to the interests , of the shareholder, whom they seemed to look on as so many wells, into which they were going to place foree-pumpa, co that every six months they would get a supply of, liquid gold. He called on the shareholders to defend their rights, while yet they had time, and not give proxies thoughtlessly. If shareholders would send him their proxies he would see that their interests were protected, and he dared the Directors to postpone the meeting till after the result of the London meeting wag known. It had been stated by one Legislative Councillor that he knew what Mr Ward had stated in London, but Mr . Andrews wsb the only man who knew that a huge altar had baen set up in regard to this matter, and the shareholders were to fave the colony. He asked why ehould the shareholders do so. It had been said that the Government would make a present of the two millions and he said, "Let them keep their word." He stated tbaton the strength of what the President had said, many of the shareholders had pledged their credit. This call meant ruin to them, and in their name he spoke of this. It had been said that if the shareholders did nob accept this position it would mean liquidation. It meant nothing of the kind. It was not for him to place an alternative before them, but he believed that one reeult would be that this bank would draw down the Government, and it would be a good thing if this body cf political .experimentalists and plungers were out of office. He concluded by moving—" That this meeting calls upon i tho Directors at present in London (Messrs Glyn, W. T. Holmes and another whose name he had forgotten) to resign their position on the Board of this bank." The President called for a seconder, but there being none, he declared the motion lapsed. He explained that the Directors j had either to come to the annual meeting j when they knew of a deficioncy, or take steps to make the position good, and this was what they had done. He had stated in his Bpeech that in February they had | probed into the position of the Estates i Company. If they allowed the bank to j i liquidate, the shareholders would have to I pay up their calls at once. I Mr Blanchard: We would have the 1 colony's two millions. ! The President had yet to learn that the

two millions would stand between the colony and the shareholders. It would have been a liability of the shareholders, and would have had to bs paid up. Mr Blanchard had threatened to take the matter to the Supremo. Court nud obtain an inj auction to fore* the b*nk iuto liquidation. Mr Bianchard retorted that thu waa quite true, and if ho had had the money he would have carried it through. Mr Eiley (Dunedin) ssid that he had listened with pain to the tirade of Mr Blanchard It was unworthy of him, and would not damags the President of the bank. He was pleased that his motion was not seconded, and also was thankful that Mr Blanchard's motion last year to set tip a committee to investigate had bean lost, if bis Bpeeoh was any criterion o? what the result would have been. He would move— "That this meeting desires -to acoord a hearty vote of thanks to Parliament, and especially the Government, for tlio timely assistance rendered to the Bank of New Zealand and the colony at large, at a most critical period in their history, by the passing of the Banking Act of this week, and also to express its gratitude for the consideration shown to the poorer class of shareholders in spreading the call over two years ; further, the meeting cordially acknowledges its deep obligations to the President and Directors for the efforts they have made to conserve the interests of shareholders, and to put the bank on the solid foundation on which it now rests." He thought that this resolution would commend itself to the shareholders. They must not forget that the position was not due to the action of the Government or tho present Directors. It was due to those of the past, and should have been inquired into ten years ago by Mr Blanchard and others. He was not owing tho Bank of Ne n Zealand a panny, and could say that the Directors had done everything they conld to conserve the interests of shareholders, and he believed that they could look forward hopefully to tho future. I£ the bank had been allowed to close it 3 doors, it ■ would hava caused widespread ruin and disaster, !and paralysed trade and industry. The colony had b9en on the mouth of a volcano, and had it not been for the Government, which had shown great pluck and consideration, the colony would have been blown to atoms. If a committee of shareholders had bean appointed last year would the Governmeut have stepped in P Not a bit of it, and the result would have been simply ruinous. He granted that the call would be hard on some shareholders, but it would form the nucleus of future capital, and would return 5 per cent interest. They had every reason to look hopefully to the future. The fact was that the bank' had been greatly damaged by some of its own shareholders, and "had it not been for someof its patriotic friends, its position would have been worse. When people came to hint, he advised them to have faith in the old institution. The bank had been greatly mismanaged in the past, but he believed that they had now at the helm those who would tteer the good old ship safely into port. Four classes would be benefited by the Act just p&Bsed. Firat, struggling settlers who, if the bank ologed, wonJd be bound to be crushed, as other banks would not take their accounts. Second, working men who, he hoped, would realise that if the bank had closed, the whole community would have been in a state of panic, and labour could not have' been employed. The Government had shown intelligence and backbone, and he for one felt deeply grateful to it. Another class that would benefit would be the shareholders themselves: He believed that it would be the salvation of many of them, as supposing the bank had gone into liquidation all would have been called up at once. A Shareholder : There were assets as first call. Mr Eiley : The assets, on a forced sale, would not realise much. In answer to Mr Blanchard, he asked how conld the Directorß have given the information they had now at the last meeting? He waß thankful that the Directors had sufficient honesty to Bhow the real position, and he hoped that they would go on, as the bank now had a good future, especially if they secured the business of the Colonial Bank. It was monstrous to say that the Colonial Bank was in the same position as the Bank of New Zealand. He knew that it was doing a good business. Mr Tanner, solicitor, Wellington, seconded the motion. He pointed out that the two millions guaranteed by the Government belonged to the people of New Zealand, and it was absurd to talk of it ever being given up Jo the bank. In giving the guarantee the Government had aoted as statesmen. The present Directors had not assisted in bringing the bank into its present position, and those who had were greatly to blame. What had led to it occurred a decade or more ago. The shareholders had the call spread over a number of years, and that was come satisfaction, There was something in the goodwill and in getting their finances into good order, with a guarantee at their back to give them hope that they 'wo aid get their money back. Mr George Allen, as one of the original shareholders of the Bank of New Zealand, said that muoh as he had been opposed to some of the actions of the present Government, its action in connection with the bank had been the right thing in the right place. On thinking over the ramifioationß of the bank, be was convinced that it would have been a bad thing for the bank to have gone into liquidation. He did not see that, the present Directors could have done other than they had done, and he believed that the resolution just moved was right. Mr Charles Smith hopsd that the motion wonld not be passed in the form it was in, as it was absurd to say that they knew that the bank wae on a solid foundation. He thought that if sent to England in that form it might raise false hopes, and if put in that form, he would have to oppoße it. The President said that it was quite correct to say that the bank waa on a solid fonndation. Mr Martin Kennedy, as a shareholder in the bank, had pleasure in supporting the resolution. He, likeotherß, had suffered, having only bought in some six or seven years ago. He thought that thanks were due to Parliament for its action, not any particular party, for both sides of politics had assisted. They had been blamed aa Directors for approaching Parliament, but there waß an obligation by the deed of settlement, giving Parliament power to wind up the bank when half the capital was gone, and when the Directors went to the Government the capital was all gone. If liquidation had been forced, the first thing the Directors by the deed of settlement would have to do would have been to call cp the reserve liability at once. That was the poaition last year. Coming to this year, he said that tho Government waa giving them half a million, and if they got 5 per cent on their shares, they wcn)d (jet some of their money back. If they could not pay their calls they might be able to

finance them. Aa to the profits, they believed that the bank would earn what the Directors had put forward. The proprietors of any commercial institution ahoald hare some consideration for their creditors, and the bank depositors deserved this. Ib would sot have been right for the Directors to have taken a etep that would expose them to losa. Ultimately the colony might lose something, but they hoped not. It had been asked what waa the goodwill. In the first place there was this half-million, and if things looked up they could buy back the .£500,000 worth of shares. That waß possible, and it might be to the interest of the bank to try and redeem this other half of the goodwill. When full particulars reached the shareholders in London they would join in this resolution, that Parliament had done a thing for' which they, aa shareholders, had every reason to be thankful. Mr Riley, in reply to Mr Smith, said that there was no bank in the colonies in such an impregnable position. The assets had been written down, and it had a trading oapital of three millions. He had great faith, not for large dividends of IS per cent,, but of reasonable profits, and as a- larga shareholder himself, he had great sympathy for the shareholders in general. If the bank had olosed the colony would have suffered, fresh taxation would have had . to be levied, and every colonial; would have suffered. ' On being pat to the meeting, the motion was declared carried unanimously. The President returned thanks for him* flelf and the other Directors. They had had a trying time, and had done their beat for the shareholders. Mr Martin Kennedy stated that there was, perhaps, a feeling that because the Government had appointed the President, auditor and directors of the bank, the business of trading firms would be disclosed. He stated that nothing of tna kind was possible, as the Directors all took a pledge of secrecy, and he, for one, would not occupy a seat on the Board it' anything of the kind was possible. Ho expressed the highest opinion of tU-3 President and Auditor of the bank. Mr Allen moved a vote of thanks to the officers o£ the bank for their services in the past year. The motion was seconded by Mr Barry and carried. ' , . ■ Mr Andrews, the auditor, responded for the offioers. In reply to Mr Blanohard, the President stated that the next half-yearly meeting would be held in February, as provided by theAot. The meeting then terminated. - '