The Colonial Bank.

Feilding Star, Volume XVI, Issue 79, 27 September 1894, Page 2

The Colonial Bank.

■ "O (Per Press Association.) Dunbdih, Sept. 26. At the Colonial Bank meeting held to-day, Mr MeLean, Chairman, reviewed the Bank's history at considerable length in connection with the amalgamation negotiation* No representatives had ever met with more earnest desire to produce a scheme which would be fair to both parties and at Bame time conserve the interests of the colony. On the whole they were not disappointed with the result. Ho said although the present attitudo of the Government may prevent us from seeking to carry it out it is now on record, and seeing the position Government occupies with the Bank of New Zealand, time will determine whether the proposals made were not only in the interests of shareholders of both banks, but in those of the public, and and were such as would have freed the colony from the position of embarrassment which its recently assumed responsibility seem to be tikely to entail upon it. We have virtually withdrawn from the negotiations for two reasons. First, because we cannot permit our shareholders' interests in any way to be adversely effected by the liquidation of the Assets Company, and secondly, because Government influence is already provided for. In the suggested agreement the appointment of president and auditors ought not in our opinion to be increased by direct representation on the Board; such direct interference with its ordinary business being Ukely to detrimentally affect the Bank and lead to the withdrawal of many of its most valuable accounts. This latter point might possibly have been modified by negotiations — for example, by such Government nominee being sworn to secrecy ; but the first stipulation, was in our opinion, fatal to the scheme. When the Government guaranteed the Bank of New Zealand, it was felt a cruel blow was heing struck at the local institution in providing it with money at a cheaper rate than the Colonial Bank could expect to get it at. The Bank'sr position had been steadily strengthened in London. There were £350,000 deposits due, dates pf which extended over five years. When the guarantee was given the Bank was exceptionally strong. The Government had been applied to for a share of the banking account, and blio General Manager's letter was read, in which it was stated that there was do objection to the appointment, of an auditor from time to tune to report on the condition of the Bank, but would indeed be glad if such were done. The scheme for amalgamation was then prepared to effect the building up of a strong bank and the separating of the lead assets. He proceeded to show the Dffect of the scheme. The difficulties of the Bank of New Zealand and the crisis in Australia had thrown suspicion on all the banks. It was foreseen that the guarantee might act prejudicially and a policy of prudence had to be adopted. Some hundreds of thousands of the best business in the Colony had to be refused because the Bank had to pursue a conservative pqlicy. There was no di^guising the fact thuf the augmentation of thtj lank's capital could now be most advantigeously employed in increasing one} jonsolfdatiuj; the valuable business Th§ proposals were in the interests of ' the iharehblders of. both banks and thepublio, Utbough the present attitude of the Govirnuient may prevent its being carried tut the amalgamation scheme is on word, Correspondence with the Xrejuj.

urer was read, and the Chairman continued that the Colonial had virtually withdrawn, because the shareholdera should not be adversely affected by the liquidation of the Assets Company. Mr J. W. Bain said he had come prepared to speak and cast a large number of votea against . the amalgamation. The Bank of New Zealand might become a State Bank, but the Colonial would always be the people's bank. The report and balance-sheet were adopted. The Chairman, in replying, said the Colonial Bank was the strongest in the colony. The shareholders would understand that the figures were the capital and reserve fund put together and taken in proportion to each bank's liabilities The Bank of New South Wale's proportion of capital and reserve fund to liabilities was 18*48 ; the Union Bank, 12-18 ; the Bank of Australasia, 1564; the Bank of New Zealand, 9-48; the Colonial Bank, 17-88 — (applause) — and the National Bank, 12 81. Those figures were taken from their own published balance-sheets. If, said the Chairman, you take our position therefore as a matter of strength we are the strongest bank in the Colony. — (Hear, hear.) _____