The Evening Star. THURSDAY, AUGUST 15, 1872.

Evening Star, Issue 2961, 15 August 1872, Page 2

The Evening Star. THURSDAY, AUGUST 15, 1872.

The “ National CuiTency and Bank ” Bill, introduced by Mr Bathgate, readied ns yesterday; and as it is a subject of the utmost importance to the whole community, we will give an account of its provisions, reserving any remarks upon them for another time. The preamble states that it is expedient to make provision for a “ national currency and for the regulation of banking in the Colony of New Zealand.” Then follows the interpretation danse ; and in the 3rd clause it is provided that five or more persons, by signature to a memorandum of Association and. complying with other provisions of the Act, shall on registration become an Incorporated Banking Company. The 4th clause prescribes the facts to be recited in the memorandum, which are, the name of the Association, the Province and town where the head office is situated, the amount of capital, the number of shares, with the names and residences of the shareholders, and the shares held by each. The “ name” is to be subject to the approval of the Colonial Treasurer. By the sth clause the articles of association “ may be ” attached to the memorandum. By the 6tli clause, “ no Association ” shall have a capital of less than £25,000 ; and should it be organised in a city with a population exceeding 20,000, the capital is to be £35,000. This minimum is, however, not to be the minimum should the Colonial Treasurer approve of the establishment of a bank in “ any place ” where the population is not more than 5,000. He is authorised to give a bank a start in such a spot with £12,500. The 7th clause requires that Banking Associations shall be incorporated. The Bth empowers the Corporations to appoint directors and officers, and somewhat unnecessarily defines the duties they may perform. Clause 9 requires that there shall be not fewer than five directors. The 10th section fixes the value of shares at £2O each, and each shareholder is to become liable to twice the value of his shares—at least that is what we understand by the somewhat clumsy form of words employed. By the 11th clause capital may be increased or reduced within the limits prescribed. By the Pith fifty per cent, of the capital must be paid up before the Association will be allowed to commence business, and the remainder must be paid in instalments of not less than 10 per cent, of the capital at intervals of two months from the commencement of business. . The 13th clause provides for the sale by auction of the stock of defaulting shareholders, and the forfeiture of their shares should no bidder offer a sura equal to the amount due. By the 14th clause, Associations before commencing business arc required to deposit not less than one-third of the capital paid up with the Treasury, to bo invested in Colonial securities. On receipt of these the Treasurer is to issue debentures at the same rate of interest, and having the same time to run. As capital increases, the deposit is to be increased, so that always one-third of the capital is to be in the hands of the Treasury. By the IGth section these securities are to be held for the redemption of the notes in circulation. By the 17th section those notes are to be issued from the Treasury to the value of 90 per cent, on the “ current value” of the securities. Clause 18 authorises the Treasurer to issue notes in a specified form, but requires that they shall he made payable “ on demand.” Clause 19 makes the notes a legal tender for all purposes excepting payment of duties on imports, interest on the public debt, and redemption of the national currency. Clause 20 provides for replacing worn notes, or issuing notes in lieu of any destroyed, on proof being given to that effect. Clause 21 provides for comparison of security account with the Treasury. Clause 22 provides for the payment of interest on securities to the Banks so long as their promissory notes are redeemed and for the Treasury receiving additional security when the mar ket value of securities deposited falls below the rate at which they were accepted. Clause 23 prohibits Associations purchasing or holding real estate except for business accommodation, security for debts previously contracted, conveyance to them in satisfaction of previous debts, or purchases under judgment, decrees, or mortgages to secure debts owing, nor under these conditions is

real estate to be held longer than five years. By clause 24 no person or firm is to owe more to a Banking Association than one-tenth of its paidup capital, but bills under discount where value has been given are not to be considered as money borrowed. By clause 25, every association is required to hold 15 per cent, of its circulation, and deposits in gold coin ; and whenever its amount of coin falls below that, no further advances are to be made, nor bill discounted, excepting that bills payable at sight may be purchased, nor is any division of profits to be made, until the proportion of gold to circulation and deposits is restored ; but the certificate of a “clearing house” representing money “ specially deposited for any clearing house association” is to be deemed “ current coin.” By clause 20, the Colonial Treasurer is authorised to wind up an Association not keeping up the required reserve. Clause 27 requires an Association to select an Association in Auckland, Wellington, Christchurch, or Dunedin, at which its notes may be redeemed at par; but the appointment of such an agency is not to be a bar to redeeming its notes over its own counter. By the 28th clause one tenth of the profits are to be set aside as a surplus fund. By the 29th, periodical statements are to be published of assets and liabilities. By the 30th, no loan can be granted on security of shares, nor may an Associa tion purchase its own shares, except to prevent loss on a prior debt. By the 31st, no Association is to become indebted beyond the amount of its actual capital, except on account of notes in circulation, on account of deposits or collections, on account of bills drawn against deposits, or on account of liabilities to its shareholders for dividends and reserve profits. There are twenty-six clauses more, of which some are important. We shall therefore give a resume of them on a future occasion.