THE ASSETS BOARD.

Gisborne Times, Volume IX, Issue 882, 5 May 1903, Page 1

THE ASSETS BOARD.

Mr W. S. Aiekin thus criticises the Assets’ Board management, through the Now Zealand Herald :

Sir,—l agree with your leader on the Assets Realisation Board as far as it goes, but it does not touch the real evil. In 1895 the Assets Board was formed to relievo the Bank of Now Zealand so that its usual business might be carried on in tho ordinary way. To put the matter in business language, theso assets were tho unrealised capital of tho Bank, but, not being liquid enough fo sell readily, were placed in the form of a company, so that they might be disposed of as opportunity offered. Tho book estimate was £2,'730,000, and they may bo regarded as tho security for two millions sterling, Government guaranteed, bearing interest at 4 per cent., the advance taking tho form of bank stock created to that amount. The Bank's stock or shares have a life of 10 years and the Assets Board’s debentures nine, so that both expire about a year hence. One would naturally think the business of a realisation board would ho to realise: let us see what progress has been made. Tho latest Year Book says from 1895 to 1902 (seven years) of tho two millious and threo-quarters assets only 1-825,000, little more than one-third, had been realised upou. Of this 1:825,000 only £405,000 has been fully disposed of, tho remaining 11420,000 boiDg only partially realised, whatever that may mean. Now, as to loss. Of the assets finally closed, the book cost was £604,000, deducting from which the amount actually realised (26405,000), the loss on full realisation in the seven years may be caliod 11200,000. The report kindly informs us that the deficiency includes realisation expenses. Tak* ing the form in which tho Board sots forth its figures, the inference must bo that the loss on realising 11405,000 was 11200,000. No guide is given us as to what the deficiency on the 11420,000 partially realised will be. Surely this is the mountain in travail with a vengeance ! That tho deficiency is so groat need cause no surprise, considering that it includes tho salaries of Mr Foster and other officials, likewise tho handsome honorarium of Mr E. J, Seddon, as dictator-general, and the salaries and commissions of various agents throughout the colony. And all this over a period of seven years ! Only £400,000 to show for seven years realisation, and tho Board with scarcely two years’ life left to realise the remaining two millions 1 What have Mr Seddon and his subordinates been doing ? What have they been nursing—the assets or their salaries —which ? There are certain matters which the public is as likely to form a correct opinion about as the managers of the Assets Board. I have expressed an opinion recently in your columns that present prices are probably inflated. The demand tor the Cape and Australia is probably ephemeral, and the very fact of the Government spending millions in purchasing big estates—the seller always having the best of the bargain—is calculated to create an abnormal standard of values. A mild depression is probable, a cataclysm unlikely because our prosperity is on a solid basis. But the best of good things can be overdone, and probably that is what is happening now. Tho Assets Board was launched on tho flowing tide, and seven years is a long time for prosperity’s tide to flow in any country, therefore the Assets Board would probably have been prudent to have had realised two millions sterling by this time. Tho course adopted by tUe Board is contrary to the usual practice of financial institutions, which generally realise as quickly as possible, making a loss and having done with the estate. Opportunity may pass, and the Bank of New Zealand, like Lord Ullin, “left lamenting,” as the waters wild wash o’er its child. Had realisation proceeded at what-, by that Hue of reasoning would have been a reasonable rate, the Bank would have had its two millious to meet the 4 per cent, shares falling due. There would have been no necessity for fresh legislation, no need for the colony as a predominant partner in the Bank, and the colonists would have been spared the humiliating apprehension that the Premier would flood the country with unlimited nreeubacks by means of a busy Government printing press. Mr Foster says the assets in process of realisation are the Bank’s. The sooner they are handed back to the Bank or given to someone who will realise the better,—l am. etc., W:-i. S. Aickix,