NOTES OF THE DAY

Dominion, Volume 14, Issue 29, 29 October 1920, Page 6

NOTES OF THE DAY

The Government appears to have made a very fair arrangement with the Bank of New Zealand for tho capitalising of a portion of tho Bank's reserve fund. At'first-sight the increase in tho State's interest in the Bank appears to bo disproportionate to iits "B" share interest in the reserve funds, but the ordinary shareholders should be well satisfied with the new proposals as a whole. At the present time the State's share interest, which consists of "A" and "B" preference 6hares, compares with the shareholders' interest as under:— £■ "A" preference shares 500,000 "IS" preference shares 250,000 Shareholders' interest 1,500,000 Total .£2,250,000 Under tho proposals outlined in tho Bill tho position will be readjusted as follows £ "A" preference shares 500,000 • "B" preference shares 625,000 Shareholders' interest 2,250,000 Total £3,375,000 Tho increase in the respective slinro interests is to be brought about by transferring from the reserve fund of £2,500,000 a sum of <£1,125,000., Of this sum tho State "B" shares will be credited with £375,000, while the ordinary shareholders' shares will be credited with <£750,000. ■At the present lime tho ordinary shareholders' shares aro fully paid up at £6 13s. 4d. and tho .£750,000 means that each share will benefit to tlie extent of £3 Ss. Bd. Tho Government's "B" preference shares each benefit to the extent of £10. In other words, for every £6 13s. id. paid up by ordinary shareholders it is proposed to issue ten £1 shares, while for every £G 13s. Id. paid up by tho Government .on its "B". shares it is proposed to issuo shares equivalent to £16 13s. 4<L in face value. It will be noted that the Government "A" preforemee shares do not participate in this capitalising- of reserve profits; this no doubt being duo to tlie fact that they carry a, special preference both as to capital and dividend. » * » « In the distribution of profits proposed under the Bill account is taken of tho readjustment of share interests. A 6chemo lias been devised under which

in effect the Bank's profits up to tho amount distributed last year, i.e., ,£356,250, shall be distributed in the same proportions as on that occasion. The Government "A" preference shares tnen earned their maximum dividend of 10 per cent., or .£50,000. Tho "B" preference shares earned 174 per cent., or £43,750, and the ordinary shares, earned 17J- per cent., or .£262,500. It is now proposed to give 'the "A" shares ft ferential claim of the first £50,000 earned, and • tho next ,£306,250. of profits available for distribution are to bo divided between tho Government "B" shares and the ordinary elMToholflere in the respective proportions of one-sevonth (£43,750) and six-sevenths (£202,500). It will bo on profits beyond this that tho Government will secure its chief bonefit. Of- all sums above the. £806,250 distributed in dividends the Government

"B" shares will receive one-third instead of one-seventh, thi9, of course, being proportionate to the increase in tho Government's "B" share interest. Tlie arrangement appears to be h, reasonable one, the benefits both to the Government and to the ordinary shareholders being well balanced.

It is in vain to deny .that relations beEween Britain and France have drifted fnto an unsatisfactory position. The French entertain' the idea that'the British have come out of the war vastly better in the peace terms than they have. • 'German industrial and maritime rivalrv has been destroyed. Tho German Fleet no longer exists.. Most of the German colonies have gone to Britain in the form'of mandates. France argues tint she has obtained very little, except Alsace-Lorraine; which was hers, and tli6 Ruhr Basin coal concessions. Instead of receiving substantial guarantees against future German aggression 6he was in-' dnced by the American President, sunported bv the British Prime Minister, to accept the protection supposed to be afforded her by the League of Nations, and it now looks as if she will come empty-handed out of this doubtful birgain. In order to get on her feet again she has the utmmjt-ne.ed of the full reparations provided for in the Treaty of Versailles, and she now suspects Britain of willingness to Telax its terms for the benefit of Germany at her expense. Mr. Lloyd George is a master of compromise, and if ho were not the situation in Europe would be very much worlsc than it is to-day. The position is an extraordinarily difficult one. Our sympathies in principle are with France in her efforts to insist on the fullest satisfaction from Germany, and her determination to have no shilly-shallying in carrying out the.peace terms. At the] ijamo time there iB a tendency among the French, or sections of them/ to clamoul for the full pound of German flesh, and to insist on the performance of impossibilities. British compromises may be temporarily annoying to French extremism, but we must hope that in the end France will see that a spirit of give and tako Is' necessary if tho amity oi Europo is to be restored.

There lias been much speculation in Britain as to how long the trades unions could hold out in event of a general stoppage. Up-to-date figures showing tilttrades union fmids are. not available, the latest issued being those of 1!I17. These showed 579 union's, with 4,3116,271' members, and of accumulated funds. If th« whole of this eum

woro available it would amount, roughly, to £3 a head—about half a week's wages on the present scale. After all locked-u|, funds have been deducted, the actual cash balance on the 1917 figures is stated to be less than 255. a hdad. These figures are three years old, and the position may, of course, have changed materially in the meantime. The Labour Council ol Action is stated recently to have devised a scheme whereby tho workers may b* rationed through the co-operative societies, which now have their own factories, bakeries, dairy farms, and a network of supply branches covering all the industrial districts. At first it was desired to acquire control of the societies, but this was resisted. An arrangement appears finally to have been reached, however, by which the unions would hand over their entire funds as security to the co-operative supply societies for supplies on credit to trades unionists on a ration basis in case of a general stoppage throughout the country. In conjunction with this scheme a rent strike was also contemplated. Such an arrangement foi the feeding of strikers would enable a general stoppage to last until tho cooperative societies tired of it, or exhausted their resources. In the eiul it would be they and not the Council oi Action who would be the final arbiters of the issue.

Mr. Parr's new Education Bill makes no revolutionary changes, but promiset to effect. numbers of useful reforms, in the Dominion's education system. Parents in rural districts will be pleased to note the inducements to 1m given to teachers to spend at least twoi years in country schools and so obtain preference in advancement. This and the increased pay for country teachers should do something to relieve the serious undeistatfing of the rural schools and counteract the drift to the towns, a thing unfortunately not confined to teachers. The raising of the school leaving age from 14. to 11 years should ' excite little opposition. There are 20,000 children affected by it; but as 15,000 of them are already attending school, the net result will only Ije an addition of 5000 scholars to"the quarter of a million at present under instruction' in the Dominion. Of this 5000 about 3000 have not passed the Sixth Standard, and would therefore benefit by another twelve months at school, and a year's extra schooling would .also do no harm to the 2000 who leave at fourteen, aftei having passed Standard "VI. Tho change will give the children a better start without adding materially to the existing shortage, of juvenile labour.