BANK CHAIRMAN

Waikato Times, Volume 106, Issue 22762, 10 November 1945, Page 4

BANK CHAIRMAN

REASONS FOR DECISION REPLY MADE TO MR GOOSMAX (By Telegraph.— Tress Association) CHRISTCHURCH, Saturday The reasons for his decision to continue serving as a director of the Bank of New Zealand have been given by the chairman of directors, Mr A. T. Donnelly, n reply to a letter from Mr W. S. Goosman, M.P. “Mr Goosman appears misinformed as to what has happened and why it happened,” said Mr Donnelly. “Mr Chalmers and Mr Porter approve of my reply. lam sure my colleagues would do the same, but they have not seen it. Mr Gooctnan has not replied nor communicated with me. Mr Goosman’s letter and my reply are set out below.”

Mr Goosman’s letter to Mr Donnelly was as follows:—“ As one who was pleased to congratulate you on the very fine statement that you made to the last annual meeting of shareholders of the Bank of New Zealand, I now feel that it is my duty to let you know that I deplore the action you have seen fit to take in connection with the acquisition of the bank by the Government, and I feel it would be the right thing for me to do to let you know that I intend to denounce your action in the strongest terms at the first available opportunity.” Statement Not Retracted In reply, Mr Donnelly says, inter alia:— “ There are some matters which I should ask you to consider when you speak in the House. I have not retracted in any respect from any statement I made in the annual address. I was of opinion then, and am of the same opinion now, that there is no national need, necessity or 'V benefit, so far as I can see, for the acquisition of the shares by the Government. I said that I had informed the Government that I should like to be relieved of my appointment when the bank is taken over. With great reluctance I was persuaded to change my mind about retiring from the board. If I consulted my own wishes and personal interests I would certainly be glad to go. During the last five years I have spent most of my time in national work, because I was physically unable to give any per- • sonal service during this war. Now that the war is over I am anxious to return to my own business again. Reluctance to Carry On “The Government, my colleagues and the executive of the bank know that I was reluctant to carry on, and I have told them all so over and over again. I agreed to remain for these reasons, among others:—(l) If the whole board retired, public confidence in the bank would have been shaken to a serious extent and much of the best business of the bank would 1 have been lost, without influencing the course or decision of the Government. (2) The Bank of New Zealand is the only New Zealand bank, and preservation of its business and integrity is a matter of public importance. “(3) The bank is a national asset and its wreck would destroy a public utility, for which the directors could be blamed if the Government submitted a reasonable scheme of control. (4) As the National Party, if elected to office, has said that it will try to reverse the Government’s action and restore the shareholders’ interest in the bank, it was important that the business should be kept intact. The proposed scheme for exchanging shares for Government stock retained the identity of shareholders, and there was, therefore, every reason to carry on if that was possible.

Preserving Principles “(5) If the bank was wrecked the damage would not have been confined to the bank, but must have spread—how deep or how far no one could tell. (6) The Government undertook that in all administrative matters the bank would remain under its present management, and the day-to-day conduct of the business of the bank will be governed by the same principles as in the past. “(7) The board remains as at present, strengthened by the certain appointment of Mr Chalmers and by the probable appointment of Mr Ashwin. (8) If at any time there is any disagreement in principle between the board and the Government, the board is entitled to retire.

“You will, therefore, see that my decision to carry on was not based on any selfish reason, and I was only prevailed upon with very great difficulty to agree to do it. Nothing that we have done has deprived the National party, or the opponents of the bill, of any weapon of criticism or attack which was available before we made our decision. Nevertheless, I say plainly that, placed as we we felt that just now there are some things higher or better than party or politics.”