The Feilding Star. WEDNESDAY. JULY 12, 1893. N.Z.L. & M.A. Company

Feilding Star, Volume XV, Issue 10, 12 July 1893, Page 2

The Feilding Star. WEDNESDAY. JULY 12, 1893. N. Z.L. & M.A. Company

We were informed by telegram yesterday afternoon, but wbich only reached us after we bad gone to press, that owing to the bank crisis in Australia the New Zealand Loan and Mercantile Agency Company (Limited) had suspended payment, pending re construction. Immediately following this came a wire to tho effect tbat the Bank of New Zealand bad request od the Press Association to tttat-a tbat tho Bunk will not make any lota by the suspension of the New Zealand Loan and Mercantile Agency Company, tbe advances to the Company being not only much reduced, but amply covered by good realisable securities. The banking accounts of the Company have not been kept with tbe Bank of New Zealand. The latter ia very reassuring to those who are interested in the Bank of New Zealand, but, aa far as the customer* and shareholders of tbe New Zealand Loan and Mercantile Company are concerned, tbe effect wiil be very much the reverse. People are not very likely to forget the close relationship wbich for so many years has existed between tbe Bank of New Zealand and the New Zealand Loan and Mercantile Agency Co, and will, not unnaturally, wonder why the Press Association should be aaked to publish so vigorous a disclaimer of connection. Now, we always had a certain faith in the management of the New Zealand Loan aad Mercantile Agency Company, and, notwithstanding that the Company has been forced to ** reconstruct," we do not believe that people who have business connections with it will lose oue penny. Our reasons for holding this view are as follows, and tbey are substantial ones : The authorised capital of the Company is L 4,500,000, 500, 000 ; the paid-up capital and reserve fund, Ll, 192,64 3 ; uncalled capital, IA 137,357. We have before us the last balance-sheet of the Company, aud Report presented to the shareholders on February 3rd, 1893. From tbe latter we make tbe following extracts: In all the Australian colonies duriog the past year busiuess has suffered from tbe unsettled condition of the labour market, and ftom the financial difficulties of certain institutions iv Syduey and Melbourne, attributable for the most part to undue speculation in town and suburban property. This Company is not concerned in siich transactions, but tbe distrust thereby caused, and the lower prices obtainable for wool aud cereals, bave determined tbe Directors to make larger provision than usual for possible contingencies. New Zealand bas enjoyed un immunity from the financial difficulties by which the loading Australian colonies have been beset, and continues to exhibit satisfactory progress in ber exports of pastoral and agricultural produce. During the last six months a scheme was formulated by the Directors for the conversion ani consolidation of the various outstanding debentures and debenture stock of the Company into one uniform 4 per debenture stock. Tbe latter amounted to L 3,135,000., 135,000. To thismust be added guaranteed mortgages, L2o 1,000, bills for collection, &c., L 1,084,000,, 084,000, and bills payable, L 774.000, nnd amounts in transit, L 415,000. The assets were: cash, L 131,000, bills receivable, L 3 71,000, premises, L 35-4--000, stock and share investments, L 19.000, loans on mortgage, L 4.00-0-0-000, advances on wool, L 2,000,000, amounts in transit, L 179,000. It will be perceptible enough that the weak C>int in tbe balance-sheet is the 4,000,000 loans on mortgage. No doubt the failure of Goldsborough Mort and Co., did much harm to the New Zealand Loan and Mercantile Company, in as much as it would make the conversion scheme impossible. Tbat the Company is quite solvent is apparont by the figures we have just quoted, aud in its case reconstruction wiil be feasible within the shortest time. As regards residents in this colony who have surplus buluucos coming to them of the proceeds of wool or cereals consigned through the Company to England for sale, we have every reason to believe that they will receive their money in due course us the drafts must already be on tbe way. At any rate tbe only possible iuconvenience thoy can be put to is a I little unavoidable delay.