ENGLISH INVESTMENTS IN NEW ZEALAND.

Ashburton Guardian, Volume V, Issue 1421, 20 May 1886, Page 3

ENGLISH INVESTMENTS IN NEW ZEALAND.

The following article from the “ Financial News ” of a recent date has excited a good deal of attention ; The New Zealand land mortgage and trading companies have also made a big dip into the pockets of Fnglish investors, and, while they have hitherto maintained an unimpaired credit, there are points connected with them whicl: might stand some inquiry. For ex ample, to lake the case of New Zea land alone, a very large sum ot money, amounting to no is practically entrusted to the management of seven gentlemen in six companies, apart from other enterprises in which they may be engaged. There may be found as directors of the companies whose capital, etc., is given, the following names ; H. J. Bristow —Director of Auckland Agricultural Company Commercial Bank of South Australia New Zealand Land Mortgage Company Waikato Land Association Bt. Hon. Sib James Ferguson, Bart. — Bank of New Zealand New Zealand Loan and Mercantile Agency Waikato Land Association F. Labkwobthy Bank of New Zealand New Zealand Land Mortgage Company New Zealand Loan and Mercantile Agency Bt. Hon. A. J. Mcndella, M.P.— Bank of New Zealand New Zealand Loan and Mercantile Agency Waikato Land Company Wellington & Manawatu Kailway Co, Thomas Bussell, C.M.G.— '' Bank of New Zealand New Zealand Land Mortgage Company New Zealand Loan and Mercantile Agency Auckland Agricultural Company Waikato Land Association Sir E. W. Stafford, K.C.M.G.— Auckland Agricultural Company New Zealand Land Mortgage Company New Zealand Loan and Mercantile Agency Wellington and Manawatu Kailway W. K. Graham— Auckland Agricultural Company. New Zealand Land Mortgage Company Waikato Land Association

Here is quite an influential little family party. The capital and resources controlled by these directors is to some extent set forth in the following table, which, however, does not include the deposits which these companies have the use of: — Bank of New Zealand— Capital .. .. £1,000,000 Reserve .. .. 620,000

£1,625,000 New Zealand Land and Mortgage Company — Capital .. .. £2,000,000 Debentures .. 474,800 2,474,800 New Zealand Loan and Mercantile Agency— Capital .. .. £3,500,000 Debentures <& fixed deposits .. 3,016,000 Guaranteed mortgages .. .. 406,600 6,022,600 Auckland Agricultural Company— Capital .. .. £BOO,OOO Debentures, loans, &o 587,000 1.387.000 Wellington and Manawatu Bailway— Capital .. .. £700,000 Debentures .. 560,000 1.260.000 Waikato Land Association Capital .. .. £600,000 Debentures • • 256,800 856,800 Total capital, &c. ... £14,526,000

Some L 16,000,000 to L 20,000,000 sterling of money are under the control of the little knot of directors whose names are given above. There are besides a number of other companies whose operations are a'most confined to New Zealand, and the aggregate capital and resources of these companies is certainly not less than 1.10.000. and much nearer 120.000. Of course these amounts are entirely distinct from the debt proper of New Zealand, which stands close at 130,000,000, and the various municipal and harbour loans that have been placed here. How these vast sums are employed, in what class of property they are invested, what returns they make to the investors, and how those returns are obtained, are points upon which we shall have something to say hereafter. Meanwhile it is interesting and instructive to note that seven gentlemen have succeeded in having themselves entrusted with no less than 114,000,000 sterling, the whole of which is invested in six companies, all practically under the same management, all having practically the same origin, and all more or less closely identified with the same class of business. The next issue of the “ Financial News ” contained this letter :

' In your artiole on this subject in your issue X/f to-day, you overlook four facts which have an important bearing on the inference wbioh you seek to draw from the data as presented by you. Permit me, therefore, as an old Australian colonist, to supply them as follows: —

(a) Each of the institutions named have colonial boards of directors, to whom is entrusted that management in the Australasian colonies which you seek to fix in London. (b) Both the Bank of New Zealand and New Zealand Loan and Mercantile Agency Company, Limited, are well known to conduct a large business in Australia as well as in New Zealand. The sum named by you, £14,526,000, is not, therefore, invested in the latter colony alone, as your remarks indicate. (c) Included in that sum is £1,525,000, representing the capital and reserve of the Bank of New Zealand, although in the article under notice it is expressly stated that the figures dealt with refer, not to the bank, but to land mortgages and trading companiest Furthermore, a more careful examination of. that bank’s returns would have shown that it is a colonial bank, having a branch in this country, and that therefore its total paid-up capital and reserve cannot be regarded as representing “ English money” lent in New Zealand or invested in that colony. A like examination of the balance-sheets or reports of the other institutions would have shown that they hold no deposits beyond those indicated in the list, although it is expressly stated by the writer of the article that the “ table” " does not include" such deposits. (d) The Wellington and Manawatu Eailway Company, which figures in the list to the extent of £1,260,000, is neither a land mortgage nor a trading company, but one of several originally undertaken by private enterprise in New Zealand, which gradually pass into the bands of the Government, and so become incorporated in the Government railway system of that colony.—Yours, &c., POiUNGOUBNA. And the editorial footnote was:— Our correspondent is hypercritical and incorrect. It was not expressly stated that the figures dealt only with land mortgage and trading companies, nor were _we wrong in allowing something for “ deposits,” In any case our article was not exhaustive, nor did it deal with details, as we may hereafter have occasion to do. We simply pointed out the large amount of English money handled, chiefly for investment in New Zealand by one knot p| step.