BANK AND STATE.

Dominion, Volume 6, Issue 1853, 12 September 1913, Page 6

BANK AND STATE.

The local shareholders of tho Bank of New Zealand who met here yesterday are to be complimented on the moderate nature of the proposals which they havo decided :to submit to Parliament in connection with the pending legislation which bears so vitally on tho future of the institution. We have made it quite clear in discussing the question of tho future relations of the State and the Bank of New Zealand that while in our view public opinion is opposed to the State relinquishing its' interest in tho Bank, it is also recognised that the shareholders havo just claim to bo placed in a more satisfactory position than has been their lot since the legislation of 1903. At the outset of tho controversy on this question the shareholders, through their representatives, unquestionably sought more than they were entitled to; but it can also be said that the Chairman of the Board of Directors, who no doubt was regarding the matter from the point of view of tho State, went to the other extreme, and did not do full justice to the claims of the shareholders. It was obviously a case for compromise —for the striking of a happy mean between these two extremes. The Bill introduced _by the Government to meet tho situation was presumably intended to serve this purpose, and > up to a certain point it did so. But as we showed a few. days ago there are several of the provisions of the measure which press harshly on the shareholders, and which Parliament should modify or eliminate. Some of the points we touched on have been included by the shareholders in their proposals for the amendment of tho Bill, while one or two additional claims, have been formulated. Summarised tho resolutions arrived at yesterday by tho local shareholders are as follow:— (1) The Stato and tho bank shareholders to have equal representation on tho hoard of directors—four directors each. (2) The Government of the day to nominate the chairman of directors, who shall have a deliberative as well as a casting voto. (3) Tho liability on the existing ordinary shares to b9 onlled up, and the new issue also to be fully called up. (4) The proprietors of the bank to have the power at general meetings to pass resolutions binding on the board of directors, but subject to the power of veto existing in the Minister of Finance. Tho State to havo the rigiht to voto at such meetings. (5) The power of the Government Auditor to remain unchanged, and he to bo ineligible for tho office of general manager. (6) Clause 5 of tho Bill, providing a sinking fund of .£50,000 a year (to bo invested in i per cent. Government securities) for the' redemption of tho million of guaranteed stock, is objected to as being injurions to tho bank. (7) That Clause 7 of the Bill, providing for the palyment by tho Government for its new shares with i per cent, stock or debentures, bo amended on the lines of tho Act of 1903. so that the bank shall not suffer los 3 should tho debentures or stock not rcaliso their face value. (8) That unless material modifications in the Bill aro conceded, shareholders may prefer to surrender their holdings at a fair actuarial value rather than continue in the helpless position in which, they Tiavo been placed. It will be seen from the above summary of the resolutions passed at yesterday's meeting that the shareholders have reached that reasonable frame of mind which, if taken advantage of, holds out hope of ari» amicable settlement of the matters in dispute on a basis satisfactory to both parties. The claims now put forward do not imperil the check which the State now holds in the matter of shaping and controlling the general policy of the Bank. The interests of the public would continue to bo well safeguarded, while the shareholders would be in a better position than they havo been for some years _ past to secure recognition of their views. Tho Government and Parliament we have no doubt are fully alive to the desirableness of having the question of the future relations of the State and the shareholders of the Bank settled, if possible, in an amicable fashion. It is most undesirable that there should exist any ground for suspicion that the State is not dealing fairly by the shareholders of the Bank; and tho opportunity _ now seems to have arrived for a satisfactory understanding being reached which will remove tho risk of any chance of future unpleasantness. The Government, we trust, will take advantage of the chance afforded of bringing what seemed likely to prove a very' troublesome matter to an agrecablo conclusion.