The Guardian (And Evening Star, with which is incorporated the West Coast Times.) THURSDAY, JUNE 21st, 1923.

Hokitika Guardian, 21 June 1923, Page 2

The Guardian (And Evening Star, with which is incorporated the West Coast Times.) THURSDAY, JUNE 21st, 1923.

BANK OF NEW ZEALAND. Tim decision of the directors of the Bank of Now Zealand to increase its capita) was the subject of much discussion in, Wellington (says the ‘'Post”). The increasing interest of the investing public in the shares of the hank showed that the announcement was not unexpected; all the same, it seemed to come as ;i surprise to many who were prest. 1 tit at the meeting. The bank has sent a circular to all shareholders, dated June 15, setting out what it is intended to do. In plain terms the Government is to he offered £375,000 of preference shares at £l, and the shareholders £750,000 shares at £l. The Government has the option ot taking up one-third of the new capital and is assured of a dividend of 10 per cent. It will have that dividend no matter what dividend, or if no dividend is paid to ordinary shareholders. Formally, the one third of new capital will he offered to “his Majesty the King,” and no doubt, lie will take up his proportion. The Government already has £1,125.000 invested in the bank, and the shares are preference shares. The ordinary shareholders have £2,250,000 invested in the institution. Of "the six directors of the hank the Government- appointees numi.-or four. There is also held £529,988 guaranteed stock on which 4 per cent is being paid. The hank is authorised to bring its capital up to £0,154,988. Already £3,904,988 in guaranteed stock. Government and ordinary shares has been paid up. By ihe addition of new capital the holding in preference) and ordinary shares with the guaranteed stock will be increased to £5,029.988. file new money is wanted for the expanding business of ihe hank and the general demand for more capital for iarmmg, manufacturing and commercial purposes. A point that ought not to need indication, hut is the cause of much misunderstanding, is the difference lretween the issue price and market price of a share The Bank of New Zealand ordinary shares, for instance, bought at £3, omitting commission and other charges connected with the sale of shnies, would return to the investor under 4J per cent., notwithstanding that the last dividend was 2s 8d per £1 share. Officially the hank is unconcerned with the market price of its shares. The shares are the property of shareholders, and at their disposal, to have and to hold, to sell or hypothecate, ns they i lease. Shareholders are not going to receive the lurthor issue of 750,000 shares for nothing. They will require to pay £1 each for them. and for every three they hold they will he entitled to buy one further share at that price. If they do not wish to huv, or cannot buy, into the new issue they will he able for a consideration to sell to others the right to buy. Information on the subject is not olstainable, nor is the Bank of New Zealand likely lo furnish it. but since the “democratising of the shares" (as the late chairman, Sir Harold Beauchamp, described it), the making of the £lO shares into shares of £1 has resulted in a wider spreading of the shareholding than ever before among people of quite moderate means. Many of them ninv be in the evening of life.