THE BANK BILL.

Gisborne Times, Volume X, Issue 1050, 18 November 1903, Page 3

THE BANK BILL.

(Official Message to Times.)

Wclliugtou, last night. I forward tho Bank Bill for public in- - formation. —JR. J. BwmoN. Bank of New Zealand, a Bill intituled an Act to malco further provision respecting tho Bank of Now Zealand. Whereas under tho powers in that bohalf conferred by tho Bank of Now Zealand Share Guarantee Act, 1894, and tho Bank of Now Zealand Share Guarantee * Act 1894 Amendment Act, 1894, tho directors created and issued guaranteed shares or stock to the extent of two million pounds sterling, which will mature on tho 19th day of July, 1904, and whereas under the powers in that bohalf conferred by tho Bank of New Zealand and Banking Act, 1895, tho Assots Board created and issued certain debentures which will mature on tho 81st day of March, 1904, and whereas tho said shares, or stock aud debentures, will at maturity bo redeemable at par at tho London oflico of tho bank, and whereas it is expedient that tho remaining liability of the proprietors of tho bank under section 21 of the New Zealand Bank Act, 1861, should rank as ordinary uncalled capital of the bank, and whereas tho preferred aharos roferrod to in section 4 of the Bank of Now Zealand and Banking Act, ld9j, were duly issued to Her Majosty tho Quoon aud repurchased by the bank, as provided by sections 7 and 8 respectively of tho last-mentioned Act, and it is expedient that such shares and tho capital represented tberoby should be cancelled, and that in lieu thereof fresh shares for tho samo nominal amount (to wit, five hundred thousand pounds) should bo issued to His Majesty, fully paid up, in oxchango for tho sum of fivei hundred thousand pounds, now hold by the Public Trustee, at the repurchase price of the said proforrod shares. And whereas it is expedient to make provision lor above mentioned matters, and to make certain other provisions in connootiou with the said Bank and Assets Board* be it therefore enacted by the General Assembly, of New Zealand in iiwjnt assembled, and by the authority, of the same, as follows : 1 The short title of the Act is “ The Bank of New Zealand Act, 4903.” * .... 2. In this Act,; if not inconsistent with the context, “ Assets Board " means the Assets Realisation Board, constituted under the Bank of New Zealand and Banking Act, 1395. ,•< Bank ” means the Bank of New Zealand established under the New Zealand Bank Act, 1801. “ Deed of Settlement ” means the deed or settlement of the Bank referred to m dhc New Zealand Bank Act, 1801, as such deed now. stands altered and amended, “ Directors ” means the Board of Directors of the Banla >' Guaranteed Stock ” means “ A

islijircs of the Bank issued and guaranteed under the Bank of New Zealand Share Guarantee Act, and includes the stock issued under the Bank of New Zealand Share Guarantee Act, 1894, Amendment Act,. 1804, “ Ordinary shares ” means all now subsisting shares in the Bank other than guaranteed stock and preferred shares referred to in section four of the Bank of New, Zealand and Banking Act, 18115. 3 Every ordinary share in the capital of the Bank shall he and he deemed to be a share of the nominal value of 118 13s dd, paid up to the extent but no further of *se amount actually paid on account of instalments of call directed to he made by section 1) of the Bans: of New Zealand and Banking Act, -iB'JS, in respect of such share, but witn a liability to payment of the balance of said instalments, and to payment as and when the same may be called up of a further sum of £3 Os Bd, with no further liability, cither in the event of the winding up of the Bank or otherwise. The dividend payable in respect of ordinary shares shall be computed ou' the -amount oi capital for the time being paid up thereon. d.j The liability of £0 3s 8d per share in the pound by section 3 hereof is and shall be deemed to be in substitution for liability to which the proprietor of such share is subjected under section .10 of the Bank of New Zealand and Banking Act, 1885, or under the Bank’s deed of settlement or otherwise with respect to the hitherto remaining one-third of liability of £lO provided for by section 21 of the New Zealand Bank Act, 1801. ' 5. The capital arising from the liability of £3 Os 8d per share, referred to in section 1 thereof shall be and remain security for deficiency referred to in section 20 of the Bank of New Zealand and Banking Act, 1895, and subsection 3 of the last-men-tioned section is hereby, modified accordingly. 0. While any, liability on the part .of the colony continues to subsist in respect of debentures issued by the Assets Board under the last-men-tioned Act, or this Act,, such capital shall not be called up, 1 by, the directors except by direction of the iColonial Treasurer (who shall., however, give the direction .when so requested by them), and thall bo called up as aud when the report of the Assets Board and Colonial Treasurer so requests. In the event of default by (he directors, in’ complying with the request, the Assets Board shall, in the name of the Bank and on the request of the Colonial Treasurer, make such call and enforce payment thereof direct to the Assets Board, •and for these purposes shall have, and may exercise, all powers and authorities of directors. So long as ■Assets Board is in evident, all proceeds of such call shall be paid by the Bank to that Board, which shall hold the same in trust for redemption and payment of debentures issued by that Board and outstanding ' and subject thereto, the same shall be held by the Bank fop such redemption, and thereafter shall be available for the ordinary purposes of the Bank.

Every ordinary share in capital of the Bank now or hereafter forfeited, and every share vested in-ilie Bank by virtue of Section 25 of the Bank of New Zealand and Banking Act Amendment Act, 18US, may he reissued as ordinary shajss hy the directors as and when they think fit, hut shall be disposed of by, public auction or public tender at the best prices obtainable, being in no case less than'-par and subject ,to conditions as to the Bank’s approval of the purchaser, and otherwise as the Bank thinks fit to. impose preference shares. On 31st March, 1901, preferrej

shares now held unissued by the ißank (being all the preferred shares, with the capital represented thereby, shall be deemed to be cancelled, and in liou thereof the Bank shall then issue to Ilis Majesty, as the absolute property of the colony. 73,000 fully paid-up .shares to he called preference shares, and to be of the nominal amount of £6 13s Id each, thus representing a total paidup capital of £500,000..- In payment of capital represented hy preference shares the sum of .£500,000 now held by the Public Trustee (being the purchasing price of preferred shares), with the securities in which the same is invested, shall, on the 31st March, 1901, he deemed to he discharged from the trusts heretofore affecting the same, and in lieu thereof the following provisions shall then apply • The Public Trustee shall forthwith transfer the said securilic.s to the Bank ; in so far as the net capital produced from the sale of the said securities by the Bank is less than the full capital . sum of £500,000 and interest- received hy the Bank n respect of the said securities up to date of sale is less than the apportioned part of the. dividend payable to the Crown in respect of preference shares.- Up to that date deficiency shall he forthwith paid hy tho Colonial Treasurer to the. Bank out of the Consolidated Fund without further appropriation than this Act, provided that in order to recoup. the Consolidated Fund all the sums so paid the Bank or provide funds Jo enable such payments Jo be

'made, the Colonial .Treasurer may raise such sums of money, as lie thinks necessary by the creation, issue, and sale of debentures, scrip, or inscribed stock, and for that' purpose Sections 2 to 13 of tiie Aid to Public Works and Land Land Settlement Act, 1903, shall be deemed to be incorporated herewith, but shall he read and construed as applying to moneys authorised to he raised under this section in lieu of those authorised to bo raised under that Act. The capital represented by the pre-

ference shares slfali he deemed to be paid up as on the said 31sfc March,

1901, and accruing income on aforesaid securities shall he apportioned between tbc Crown aud Bank up to that date accordingly. 10. With respect to prcforenco shares the following provisions shall apply : (it) Shall bo issued as on the said Slat Marph, 1904, and scrip certificates therefore shall on that day bo delivered to the Colonial Treasurer, who may exercise all His Majesty’s rights as proprietor of the

shares ; (b) they shall bo subject to no liability whether in the event of winding-

up or otherwise, and shall confer no voting power ; (e) in respect of capital tboy shall rauk in priority to ordinary shares ; (d) in respect of dividends they shall rank in priority to ordinary shares to the extent of £5 per cent, per annum (non-cuinula-live), and (subject to paragraphs o and f heroof) equally with ordinary shares for any excess abovo £5 per cent ; (g) in declaring dividends in excess of £5 por cant, tbon with respect to excess (but to excess only) ordinary shares shall bo entitled to dividends at twice tbo rate of dividends on preference shares, and a dividend on each class of shares shall be payable accord-

ingly, so that where for example the dividend on ordinary shares is at the rato of 6 per cent, the dividend on preference shares shall bo at the rate of 51- per cent, and so on ; the maximum rato of dividend payablo in respect of the preference shares shall not exceed £lO per cent, per annum.; (g) dividends paid thereon shall bo paid into the public account, and shall (orm part of tho consolidated fund ; (b) subject as aforosuid they shall confer tho sumo rights aud privileges as ordinary sharos in new guaranteed stock. 11. The Bank shall redeem guaranteed stock at maturity thereof, and in order to onable tho same to bo done, the following provisions shall apply, notwithstanding anything to tho contrary in tho New Zealand Bank Act, 1861, or any other Act, or in the deed of settlement of the Bank, (a) The Bank is horeby empowered to create aud issue further capital stock to tho extent of ono million pounds sterling, having a currency not exceeding ten years from the 19th July, 1904, carrying a dividond at a rate not exceeding £4 per centum per annum, payablo half-yearly; (b) such stock may be issued in the form of, or so as to be represented by stock certificates or warrants, to tho bearer of such amount as the directors may determine, with dividend coupons attached, and such stock shall be negotiable and transferable by delivery of certificates or warrants representing tho same ; (c) such certificates or warrants shall be conntor-signed by the controller and auditor general, or by any audit officor appointed for that purpose by tho controller and auditor-general, provided that the fact that any audit officer countersigns shall ho conclusive ovidonca of his authority to do so; (d) holders of such certificates or warrants shall have the op-

tion of exchanging the same for registered stock, which shall bo transferable in such amounts and subject to such regulations as tho directors may prescribe ; (o) there shall be no limit to tho amount of such stock which any person may subscribe for or hold, provided that tho total face value of the stock issued under this sootion shall not exceed one million pounds sterling; (f) the holder of any such stock shall not as such holder be entitlod to take part in or vote in respect thereof at any meeting of the proprietors of the Bank ; (g) holders of any such stock or certificates or warrants shall not bo concerned to see or inquire whethor or to what extent tho powers conferred by this Act havo been previously exercised, or are intended to bo exorcised, and all stock or certificates or warrants issued Blrall so far as concerns the holdor and his security be deemed to have been lawfully issued within the powers conferred by this Act; (h) for the purpose of guaranteeing the full and duo payment of principal and dividends of such stock, the same shall be a charge upon, and in event of default in payment by tho Bank, shall bo payable out of the consolidated fund of the colony of _ New Zealand, without further appropriation than this Act.

12. All Btoek redeemod under the provisions of section 11 hereof shall be do-

livered by the Bank to the Colonial Treasurer for cancellation, 13. All moneys paid out of the consolidated fund under the aforesaid guarantee shall be deemed to be moneys advanced by the Crown to the Bank. All assets and real and porsoual property of the Bank shall be deemed to be, and shall be, security for the repayment of all such advances, together with interest thereon at tho rato of 4 per cont por annum. 14. If default is made by the Bank in tho payment to tho Crown of any such advance or interest tho Colonial Treasurer may at any tnno thereafter appoint a receiver, and shall thereupon have and exerciso all the powers and authorities which might bo exercised by a liquidator appointed by the Supreme Court under the Companies Act, 1882, without tho necessity of applying to the said court for such appointment or power ; provided always that tho proceeds of such liquidation shall he applied by such receiver, first in payment of moneys duo to tho Crown in respect of liabilities or payments other than paymonts made under tho aforesaid I guarantee, noxt in payment or satisfaction of claims of other creditors of the Bankj and thereafter in repayment of all moneys , paid by tho Crown under the aforesaid guarantee with interest thcroon as aforosaid. , . VT 15. Section 11 of “ The Bank oi New Zealand and Banking Act, 1895.” is heicby repealed.and in liou thereof it is hereby provided that so long as any liability on the part of tho colony continues to subsist in respect of debentures issued by the ilssots Board under Tho Bank of New Zealand Share Guarantee Act, 1894, the Bank of Now Zealand and Banking Act, 1895, or this Act, the balance of tho net profits of the Bank for the year ending on the 81st of March, 1904, and for each subsequent year ending the 31st day of March, shall, after providing for the amount of dividends payablo in each of such years on guaranteed stock and stock issued pursuant to section 11 hereof respectively, be applied in the manner following, that is to eay in the first place in paying a fixed cumulative sum oi .£50,000, which shall bo transferred and paid to the Assets Board, if then in existence ; or, if not, then shall be held by the Bank in trust for the redemption of debentures of that Board. In the . next

place in paying to proprietors of preference shares and ordinary shares a dividend at a rate not exceeding £5 per cent, per annum on amounts for the time being paid up in respect of such shapes, subject, however, in caso of preference shares to provisions for priority contained in paragraph D of section 10 hereof, and the residue, if any, of such balanco shall bo paid and applied in tbo same manner as in tho above mentioned fifty thousand pounds. [Tho foregoing is the main portion of the Bill, the other sections providing tho machinery for giving effect to it.]