Bank of New Zealand.

Stratford Evening Post, Volume XXXVII, Issue 92, 18 December 1913, Page 5

Bank of New Zealand.

THE CHAIRMAN’S ADDRESS

THE NEW LEGISLATION, (Special to “Stratford Post.”) Wellington, December 18. The half-yearly general meeting of the Bank of New Zealand was held this morning at the Head Office of the Lank, Mr Harold Beauchamp, Chairman of Directors, presiding. The Chairman, in the course of his address, said;—

Our “Half Year General Meeting,” at which, as you know, there is no statement of accounts to be submitted, usually takes.place early in the mouth of December. The lateness of the date fixed on this occasion was due to our desire to give ample time for the passage of legislation affecting the Bank which was in contemplation when last we met you. That legislation is now, as you are aware, an accomplished fact. Every shareholder will shortly be furnished with a print of the Act. 1 do not, therefore, propose to take tip your time by discussing the details of the measure. 1 will merely refer to the more salient features of it, which are, that the £1,000,000 4 per cent. Guaranteed Stock maturing on 19th July next will be renewed for a further period of 20 years with the Government guarantee; and the Board has authority, with the consent of the Minister ox Finance, to raise new capital for the Bank to the extent of £3,000,000, of which £1,000,000 is to be B Preference Shares which the Government is to have the option to take up; and £2,000,000 to be Ordinary Shares, which the Ordinary Shareholders are to have the option to take up in proportion to their existing holdings. Thus, the new legislation has satisfactorily defined and conserved the interests alike of the Bank, the Shareholders, and the State, and I congratulate you on this result of Partiamentarv action.

The Board proposes to issue, as soon as convenient, one-fourth of the £3,000,000 authorised, that is to say, £750,000, as follows:—£250,000 in 37,500 B Preference Shares of £8 13s 4d each, to the Crown; and £500,000 in 75,000 Ordinary Shares of £8 13s 4d each, to the Ordinary Shareholders, at a premium of 50 per cent, in each case. The B Preference Shares will be offered to the,Government in accordance with the provisions of the Statute. The 75,000 Ordinary Shares will be offered to the Ordinary Shareholders in tiie proportion of one new share for every two existing Ordinary Shares held, but no fractions of shares will be issued. The Capital and Premium will he payable in instalments follows: To be allocated. Amt. Oap’t’l Prem. £sd £sd £sd On application,

not later than

10 00 6 13 4 368 No rebate will be allowed any _ amounts paid before Rue date,' fmt

Shareholders will have the option of prepaying all or any of the above instalments in full on any of the dates prescribed, and the Capital amounts included in such prepayments will rank tor proportionate dividend as from the date of prepayment, provided that the proportionate amount of premium relating to such instalments, as mentioned above, be simultaneously paid; All arrangements will be completed so that the new capital may be subscribed as at the commencement of our succeeding financial year, viz., Ist April next, - and the amount then paid up will constitute additional capital as from that date. The necessary documents in connection with the subscription of the new capital will he furnished to Shareholders in due course. The Share Registers will b© closed some time in March next, and the Shareholders then upon the Registers will be those entitled to participate in the proposed new capital issue. To them the Application papers will be sent, which must be returned on or before Ist April next, together with application moneys as above mentioned. Arrangements will be made by which Proprietors who do not propose to take up their quota of shares may assign their “rights” to others. The prospects of the Bank are exceedingly good; and the settlement of the proprietary interests on what I believe to he a fair and equitable basis, constitutes in my opinion a substantial addition to the value of your property. THE MONEY MARKET.—When I last had the pleasure of addressing you, I reviewed at some length the financial situation and outlook, and remarked that I was not sanguine of an early return to easier monetary conditions,. The views 1 then expressed have been justified by events, and tho tightness in the market then prevailing still continues. The Bank of England rate, which had been reduced to 4i per cent., was raised again on 2nd October to 5 per cent., at which figure it still stands. The rate of the Imperial Bank of Germany is 54 per cent., and that of the Bank of France 4 per cent. You will thus see that the dearness of Capital is not confined to London alone; it is the condition of the whole commercial world, and it is safe to say that there is little present prospect of money becoming more accessible on easier terms. The enormous expenditure on armaments shows no sign of diminution, notwithstanding the drain on capital thereby created; hut one of the greatest causes of the continued dearness is the demand from all countries for development purposes. The moment there appears to he the least relaxation of tension, the market is flooded with applications for loans literally from every quarter of the globe. We cannot, therefore, expect to find a very free market for our municipal and other loans. This Bank has been entrusted with the negotiation of a large total of such, to be placed as soon as circumstances admit, but the prospects of favorable flotations, for the reasons already stated, do net seem at all encouraging. There is, however, little doubt that money in reasonable amounts can be obtained, provided that the borrower is prepared to pay the lender’s once. We shall have to choose the most favorable moment to approach the market ; and, as the unexpected sometimes happens, we may perhaps hope that it will occur in our near experience, in which case it will certainly bo (Continued on page 8.)

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