A BANK’S DEBT

Hokitika Guardian, 6 May 1929, Page 8

A BANK’S DEBT

to .ur.p. socTir/rv. ECHO or FINANCIAL CRISTS. SYDNEY. April 25. Afcmorics of Australia's great linanc'ijil crisis in 1801 were recalled to many the other day when at the annual meeting of tiie y.AI.P. Society Air ]>. .1. Parkiiisoti. of Melbourne, directed the attention of the policyholders ami the directors to the fact that the English, Scottish and Australian Rank owed the Society .XAOaX It was explained by Mr Parkinson that this amount was on deposit when the bank failed in the early ’nineties. The creditors of the bank had agreed to a reconstruction in 18013, by which (I ey were to receive 41 per cent., on their debt, converted into stock, and to a further reconstruction in 1890. by which the interest was reduced to :) per cent. Since that time the bank lias xrrown and flourished. However, according to Air Parkinson, it refused to accept the view that the depositors —of whom the society was one—were entitled to a refund of their deposit" in full,. The present shareholders o' tho bank were receiving Pit per cent, but tiie society, as the holder of the 1899 stock, was getting only 3 per cent, on its £IO.OOO which meant that tiie asset .was worth only onequarter of what it was originally. Air Parkinson said that he wmaware that various efforts had boon made to compel the bank to honour what was IHioved to lie its obligations, and that these had failed, and that the Federal Attorney-General lmd said that there was no redress for the old depositors. TTe pointed out. however, that a condition of the 1899 reconstruction was that “.Cls 0.0 was to be put into a special reserve to snpoort there stocks, ’ and that this reserve was in no circumstances to become the pronortv of the shareholder.” That £15,000 had grown into a fund worth £503.000. and lie argued that, as it clearly was not the proncrtv of the shareholders, it belonged 1 > those depositors who agreed to accent the 1896 stock;, and that they should bo repaid from this fund. ITe argued that the opinion of counsel si mul'd be secured, and the necessary steps taken to compel the bank to pay. The .fhairm-n H‘ ‘th« society 'Em Alfred Meeks) said that there seemed to lie no redress. The value of the stock was not shown at its face value —it had long since been written down to its actual value. lVnvevcr. Cm board would give the matter further ..consideration, and -opportunity vaiuki 1h» taken to make representations direct to the, bank in Tmndou in regard to the principle involved.