New Zealand Spectator AND COOK’S STRAIT GUARDIAN. Saturday, April 5, 1851.

New Zealand Spectator and Cook's Strait Guardian, Volume VII, Issue 592, 5 April 1851, Page 2

New Zealand Spectator AND COOK’S STRAIT GUARDIAN. Saturday, April 5, 1851.

In another part of our present number will be found -the heads of the Charter of Incorporation to be granted by the Government to the Banking Company now in progress of formation. The Charter of Incorporation is, in effect, based upon the Instructions issued to Governors of colonies relating to

the establishment and governance of joint stock Banks in the British colonies. The prospectus explains the principles on which the operations of the “ Union Bank of New Zealand” are to be conducted. One of the main features of the new Bank to which the attention of the public is carefully directed by its projectors, and for which they claim the confidence of the public, is that it will be strictly a Bank of deposit, discount, and exchange, its operations being based on the amount of its subscribed capital, the Bank using only the Government notes, which are immediately convertible on demand; and it is on this point the writer in the Independent dwells, in directing the attention of the public to the proposed Company, shewing the advantage to the public from the union of the new Company with the Government Bank of Issue. There can be no doubt that the use, by the ’new Banking Company of the notes of the Government Bank of Issue, (by the Paper Currency Ordinance, the use of all private paper money, except, for a limited time, that of the Union Bank of Australia, is prohibited),—a currency in which public confidence is fully established, as is proved by the daily increasing circulation ofits notes, —will tend materially to the security of the public and the stability of the new Bank, because these notes represent the specie which has been paid for them previous to their being issued, are a currency regulated by the wants of the public, and over which the public have a direct control, which would not be the case with the paper money of any private Company. Another advantage derived from the establishment of the Government Bank of Issue is, that it facilitates the formation of the new Banking Company, since they are ready to commence business as soon as thev have obtained in exchange for their specie the amount of notes necessary for their wants, instead of having to wait until their notes could be engraved in England. We are glad to find that the favourable opinion we have always expressed of tire Government currency as a safe and convenient medium of exchange, since the first publication in 1 847 of the draft of the Paper Currency Ordinance, has been borne out by experience; while whatever apprehensions may have been entertained at one time, before it was brought into operation, by some persons engaged in business, as to its “ being unsafe, and dangerous to the best interests of the colony,” we should imagine are by this time entirely removed. It is certainly amusing, however, to find the Independent, after so furiously denouncing the notes of the Government Bank “as a third series of debentures, as a debenture fraud,” &c., after trying on every occasion, and by any. means however unscrupulous, to depreciate them in the public estimation, now suddenly making the discovery that the use of these notes by the new Bank, “ will doubtless insure the entire confidence of the publicthat this writer should be at the pains to inform us that the proposed Union Bank of New Zealand and the existing Government Bank of Issue " together make one complete Banking establishment,” printing the latter part of the sentence in italics by way of particular emphasis, thereby intimating his belief that each Institution is in itself excellent, and that taken together they are complete, and "deserve the confidence of the entire community,” We may judge from this instance the honesty of the Independent’s opposition, (and 'limilav ...UT. _ . , . , v uiavanceo wiiHout ena mignt be given of the honesty and consistency of those who conduct that Journal, if we cared to collect them), while its readiness (to use a Persian saying) " to eat dirt,” the facility with which it reads its own recantation, and disavows its former opinions, shews, even in its own estimation, the utter worthlessness of those opinions.

Heads of the Charter of Incorporation to be •granted to the New Bank at Wellington under the style and title of the “Union Bank of New Zealand." The amount of capital of the Company to be fixed at £20,000, and the whole of such

amount to be subscribed for within al" • period, not exceeding eighteen the date of the Charter or Act of T n roit ration. . Cor P 5 > The Bank not to commence busi nes til the whole of the capital is subscribe/ a moiety at least of the up. W

The whole amount of the capital t i paid up within four years from the e l the Charter or Act of Incorporation. 6 ° f | The debts and engagements of the C I pany upon promisory notes, or other/ 5 not to exceed at any time thrice the am of the paid up capital, with the addition the amount of such deposits as may be rr ji with the Company’s establishment byU I vi duals in specie or Government paper. In event of the assets of the Compj. being insufficient to meet its JI the shareholders are to be responsible to J extent of twice the amount of tbeir s u h.| scribed shares (that is for the amount s a p scribed and paid up, and for an additjnJ amount equal thereto.) ‘“'i

The Company shall not hold J own stock, nor make advances on the seen.l rity of those shares. j

The discount or advances by the Cod pany on securities bearing the name of d Director in office thereof, as drawer, J ceptor, or endorser, shall not at any tij exceed one-third of the total advances ad discounts of the Bank.

The Company shall not advance mo-J’' upon the security of lands or houses.S ships, or on pledge of merchandise, orb,' ' lands or houses except for the transaction® its business, nor own ships, or be engajjj g in trade except as dealers in bullion orbM of exchange, but shall confine its transs.H tions to discounting commercial paper, negotiable securities and other legitiniiM banking business. r The dividends to shareholders aretofeg made out of profits only, and not out of tag capital of the Company. f." The Company to make up and pubbig periodical statements of its assets andlia-H bilities (half yearly or yearly) shewing« der the heads specified in the form pr&ffi cribed for that purpose, the average ofthfi amount of its notes in circulation and otbfi liabilities, at the termination of each wen® or month during the period to which tig statement refers, and the average amount o specie or other assets that were available ti meet the same. Copies of these swatm are to be submitted to the Government, an: the Company to be prepared, if called upon to verify such statements by the production as confidential documents, of the weekly a monthly balance sheets from which thesis are compiled. No bye law of the Company shall berr pugnant to the Charter or Act of Incorp: ration, or to the law of the colony. The Charter or Act of Incorporation w provide for an addition to the capital oftz Company within specified limits, with th sanction of the Governor-in-Chief in Cot? cil, such additional capital, and the shirs and subscriptions that may constituted same being subject in every other respect from and after the date of the above-me tioned sanction, to conditions and regal? tions similar to those applying to the orif nal capital. In all cases in which shares in the C® pany’s stock are transferred between thep riod of the grant of the Charter or Adj Incorporation, and the actual commence of business by the Bank, the response of the original holders of the transfers shares shall continue for six months ail® after the date of the transfer.

Proposals for establishing a Bank in lington, to be called “ The Union Bank New Zealand.” Capital to be raised by Subscription--2000 shares of £lO each=£2o,ooo- - per cent of each to be paid The general principles upon which 1 - Bank will be conducted are those of a * of deposit, discount, and exchange. i no paper of its own, but based upo n subscribed capital and using the cur reK now legally established in the colonyLocal Bills will be discounted at the 1 * of 8 per cent, per annum. , 7Vo per cent interest will be all Deposit Accounts of £IOO and up"/j remaining in the Bank for a period ot less than six months. . Bills will be granted upon London cn other colonies, and also purchased, without security of bills of lading. ftt - corresponding with the demand fr olfl 1 to time. i Bills exceeding three months charged a discount of £lO per cent- . ’ Two-thirds of the profits will be 1 1 annually among the Proprietors, |

maining one-third will be reserved as an annual rest. His Excellency the Governor-in-Chief has promised to introduce an Ordinance at the next sitting of the General Council, to enable the new Bank to commence operations; one of the main provisions of which will be that the liability of each shareholder or proprietor will be restricted to twice the amount of his subscribed capital; the Company will be incorporated, but required to pay up the remaining £IO,OOO of its capital within a period of four years. Quarterly Accounts of the affairs of the Bank will be published for the information of the Government and the public. As soon as the capital is subscribed, a meeting of the Proprietors will be held, to frame regulations for conducting the Bank, and elect Directors, Manager, &c. Proprietors of 1 share to have 1 vote, ~ 5 shares „ 2 votes, „ 10 „ „ 3 „ „ 20 „ „ 4 „ .. 30 „ „ 5 „ but no proprietor to be entitled to a larger number of votes than five, whatever number of shares he may hold. A notice will be given of at least four months from the time of the passing of the |Act of Incorporation, before any deposit will be called for.