BANK OF NEW ZEALAND SPECIAL MEETING. Auckland, October 11.

Te Aroha News, Volume VI, Issue 308, 17 October 1888, Page 4

BANK OF NEW ZEALAND SPECIAL MEETING. Auckland, October 11.

'\ A special general meeting of the share- * holders in tho Bank of New Zealand was -held at the banking hou? eat 2 o'clock this -- afternoon. Thero was a large attendance <-' of shareholders, and tho President, Mr j , George Buckley, occupied the chair. Amongst those present were Mr Justice \Gillies, Sir F. Whitaker, J. B. Whyte, M.H.8., P. Dignan, M.LC, \V. Aitken, A. Board man, W. S. WiUon, Jas. Russell, F. Chonv, J. H. Upton, E. Heaketh, R. C. Carr, F. L. Prime, Revs. P. Mason and R. Somnierville, J. - Newman, J. L. Wilson, J. Babgcr, H. N. Garland, J. Graham, T. Buddie, Fry, F. Battley, G. P. Pierce, J. B. Russell, F. G. "Bwington, Murdoch, Alexander, L. D. .Nathan, Rev. D. Bruce, McCullough, J. M. McLachlon, T. Peacock, M.H.R., Lusher, H. F. Anderson, Professor Thomas, Major George, S. Browning, Esam, Ttiorne, J. Y. Hough ton, Captain Braund, J. M. Clark, Dr. Campbell. A. K. Taylor, D. M. Scott, * T. Chins, W. Johnst n, J. Watson, \Y\ Frater, J. T. Julian, O'Neiil, J. C. Wil- , liamson, A. Bull, J. Winks, S. E. Hughes, T. J. Esam, T. Drummond, J. 'J . Oarlick. The general manager (Mr Murray) read the advertisement) convening the meeting, and also the minutes of last meeting, which latter were confirmed. The Chairman i-aid that it had been announced to him that the requisite number of shares was represented, so that they could proceed to business. Some of those present wished to remark on the Committee's report. A convenient oppoitunity would occur when he had moved the second resolution. The first resDlution was merely .confirming one passed at the last meeting, and he would move ils adoption. It was as follows :— * 1. That the Resolution passed at the Special General Meeting of Proprietors held on the third. day of October jast, altering Clause 13 o£ the Deed of Settlement, be, and the same is, . hereby confirmed. Mr C. E. Button seconded the resolution, which was put and carried without a dissentient. The Chairman then proceeded to say that the next resolution was of much more importance. It would commit the shareholders to the writing off of no less than £3 per share of their capital. Upon it he would offer some remarks. And first he would -ay that the Committee consider their work — unles? their j statements were seriously impugned, which he feared was not likely, because j their main conclusion wasfchat£3per share of j the capital of the bank was lost— was only too accurate. It might be neces . sary for him to say more on this head before the meeting terminated. What he had now to say was to be considered rather in the light of explanations from the chair, regarding the motion he would presently put, than as any fresh deliverance from the Committee. It had been suggested that the Committee had undervalued the securities in favour of the future at the expense of old shareholders —and it had, he believed, been suggested on the other hand that they had not cut deep enough. Such conflicting suggestions neutralised each other. The Committee did not, in fact, themselves N value at all in the first instance. They obtained independent valuations, and they carefully reviewed these, and they had certiuVd that in their opinion they might be •accepted with confidence, with the result already stated. There was accordingly really no alternative hut lo write off the lost capital, because otheiwise no dividends could be paid for years, and it was, he J believed, the intention of the Board to declare a dividend at the half-yearly meeting to be held on the 22nd. The Chairman then moved the second resolution :—: — 2. That SZ per share of the present paid-up Capital o" the Bank be, ;tnd the same is, hereby cancelled, such Capital having been lost or being uni by available Assets and thatheiiceforth dividends shall be paid on such shares as representing £7 each instead ot £10 each, the original amount thereof. But Buch reduction shall not interfere with or in any way alter the liability of Shareholders to contribute a further sum of £10 as provided by the Hanks Act and Deed of Settlement in the event of the Assets of tho Corporation being insumcient to meet its engagements. Mr C. E. Button seconded this resolution a 1 so. Mr Dingle, o; Taranaki, asked if this was the propei time to speak to the resolution. a<id being answered in the affirmative, -proceeded to address the meeting. They were all, he fcaid — the judge and the lawyers, and tho merchants and the farmers — they were all the shareholders in the Bank of New Zealand. They were in tact the Bank of New Zealand. They would have seen from the report of the Committee that the enormous sums of interest that had been pa : d to the shareholders were more than double the capital of the Bank. That was light enough. So - it was with the £15 shareholders. They had no right to q nmble. Now the directors had buoyed them up in .such glaring views that the public had been allured, and had bought the Bank of ftew Zealand shares to an enormous price. They had been led away by the directors. He believed himself that the Bank was all right, one of the besfcpro per ties that could be invested in. The directors paid "You have been paid so and so."' If he rernembeied aright, there had been onethird of the shares received which were allotted at £17. Since that time till the present, they had received fifteen per cent., and then they had come to the present when they did not know what. Now, he considered that the shaies he had bought had been paying the interest out of his own capital. Now the question came to this — "They paid £17 per share for the surplus shares, and now they wanted £3 more, and that would be £20 for those shares. There was £20 to pay for their shates. If the shareholders paid £3 they would have a dividend ; if they did not they would have no dividend at all. They would go on year after year till they would be in their graves, he supposed, and piobably they would be well got rid of. He did not believe in the 'report. He had no confidence in the Bank, and he never would have confidence in it again. He had been in New Zealand nearly half a century, and he intended to speak his mind to these gentlemen upon these topics. He was going to put a question, and he hoped it would be ans"j wered. They need not be afraid to ; answer ;if they could not finish to-day they ' could have another day. Let them '*\ have some debate on these questions, that was his opinion. It was all -very well for two or three to meet together ; one proposed and another \ seconded, and thus the Bank of New } Zealand was eoing to destruction, and the 'shareholders, they had not looked after £•_ their business. (Hear, hear.) What he was going to ask was this : At the last FirF 'i r meeting they were told that the capijjyffcal was one million and the reserve !%f»nd , half -a - million. Well, then, he the property tax paid on tjhe buil- | f 4ing3, etc. The property tax on the

Concern was £3,737 Is 3d. How kindly they pub down the Is 3d. (Laughter.) Was nob Is 3d a big thing? my goodness ! (Laeghter). He looked at the matter in this way. During the twolve months past, instead of £500,000 ie was £650,000. Well, he took it from the present time for a period of four years, and he brought it to three millions, or say two millions total. That was according to the calculations of the directors' two millions total. Now the question he was going to ask was this. It was about the property tax. The General Government would claim for two millions. "He would have the shareholders understand that for the last four years the Goneral Government had on the strength of the printed forms issued to everyone, really been paid property tax for all this enounous sum of money. Now, of course, there was only three - quarters of a million. He could not; understand how any institution could iivo and prosper while it paid such enormous taxation. All them premises they found weie overtaxed. Now what did thoy nnd occuried when a man discovered that he was over-taxed? There j had to be a repeal. These buildings were not worth as much as they were ten or fifteen } r ears ago. Probably they were worth a quarter less or more than that. What he Avanted to know was whether it was actual truth that they had been [•ying property tax for all these ! enormous sums of momy. He did nob mean to say that the directors were rogues (laughter), but he meant to say that the directors, and not only the directors but also the managers, ought to look like detectives after the management of the Bank. __ As for figures, well figures were nothing. "It was management they wanted ; and they wanted to know whether it was worth while to lend So and So money. They wanted to get men with heads and brains in the Bank of New Zealand ; not men with flimsy and dwarfed abilities. He had a great deal more to say yeb, only he needed a little time. Although he had been a public man he was all a-shake, but he would get over that in about half-an-hour if he could only speak that long. He knew that was lost, but lost like water that had been spilled upon the ground and could not be gathered up again. But it was the duty of the shareholders to now strengthen the hands of the directors for the iuture. He would tell them how the things had been managed at New Plymouth. There they had two banks. The first was good enough for New Plymouth for years to come, but down in the centre of the town there were three banics, the Colonial, the Bank of New South Wales and the National Bank. Well, they moved away down town to get amongst them. Yes, he could tell them about these things as he had come from the South, and he thuugcht it would do them good. Well they went and bought a piece of land off a Mr Frederick Carrington. They paid him £600, and set to work and pulled down the old buildings that were on the ground. The place Avould not have fetched £200 at auction, he believed. Then they built a place at a cost of £15,000. He was coming on to the retrenchment now. That was how they did it down there. Then the old bank was turned into a house for the new manager. What did they think of that? They actually took the beautiful bank and turned it into a dwelling-house for the manager. Then there was painting and decorating and after that balls, dancing and singing | and he was very friendly with all the i big shareholders. Well, that gentleman was a very big man, and he got too big for his boots. He was what they called a lah -de - dah. (Laughter.) He told them this just to show that there was plenty of room for retrenchment. That bank manager was just like a young horse that had got too much oats , he was a little fresh. He got so big that he could nob see a little shareholder. He held that the shareholders could nob afford such men for directors and managers He knew a poor widow whose husband had died, and all they were left had been invented in the bank by the trustees so as to give them a living, and now they were compelled to trust to their friends for a living, while those people who had wasted their money were living upon the fat of the land, and what was more, they were con?idered respectable. Their officials were men who had learned to read and write and to figure. They were splendid hands at h'gures, but they had falsified figures for the shareholders They wouldn't pub him down for a bib. He was red hot now. He had lost a bit of money by this, he could tell them. They were practical men in figureo, but not practical men in lending. He believed bhab they should have in all the bank^ in the colonies men who knew the value of land, of cattle, and of property. If the Bank of New Zealand had had such men she would now be worth £3,000,000. When lending the managers should have paid the two guineas or the live guineas to practical men to report befoie they invested. They went on Govern ment valuation. He asked if that wa^ a fair te.st. He knew men who were at very low water mark, and they had gone with their property to the Bank, and they had said, " Look at our security — Government valuation ;" and now these securities were nob worth a half — not worth a quarter of the Government valuation. He was a little bit of a money lender himself, but he went on no Government valuations — you had to get up early in the morning to catch him. If they had got the right men the bank would now have been worth its £3,000,000. He would like to know where the £600,000 had gone to. Someone had been living on the fat of the land. He had paid for his dividend and had no reason to thank anyone for it. " Oh, yes, they were to have a great washing boday,''so a friend had said bo him. Yes they wanted to begin again with a clean sheet. It was to be done in the interest of the public. They would say the " ayes "' had it, but he had seen boo much of this ayes having it. They had lent their money on leaseholds. He had received a circular to go in with the Loan and Mercantile. He was of opinion that the Loan a»id Mercantile had taken all the best deed a — all bho best property — they had taken the wheat and left the chaff for the Bank of New Zealand. He knew he spoke very loud, but it would not be &o bad when he had cooled clown. He could talk like a parson when he got up, and he did not care for all the pai-sons in the place. If he had done any dirty tricks, like what had been done to the shareholders of the Bank of New Zealand he would say to take him out into the street, erect a castle, and hang him up. The Bank of New Zealand had had the very best of the times, and the very best of the loans. If they went into any of the factories connected with the Bank of New Zealand — into the Frozen Meat Companies or any of them — they would see that managemeut was everything. Men who had no more brains than sparrows had been put into posibions. The i Bank of New Zealand should have i competed so in the past that they would have been able to bear the brunt of this time.' He did not know if he had said enough (cries No ! No ! Go on !) Ho v could talk from then until to-morrow about the Bank of New Zealand.

Did they know that the Bank of New Zealand had been in a general way helping the small farmers with small loans of £200, or £300, or £500— men who were as good and whose property « as as good as the Bank of England ? And all along the coast; they had been putting the screw on them, saying that they must draw their their money in. They could not set it | from the big ones, and they proterred to take it from the little ones — they would fall upon the little ones becau&e the big one? would not pay. Was that for the prosperity of the country ? was it for the prosperity of the Bank ? Then they had driven away good securities— men who had come and told him of it - and these men had gono to the other banks— the Bank, of Now South Wales and the others — and there was plenty of room for retrenchment and room for improvement. It was thoir place he held to strengthen tho hands of the new directors — to do 'everything in their power to holp them. He trusted he had said something, though he could always give more about the Bank or New Zoaland. Mr Francis Cherry said that there seemed to be an idea in Auckland and other cities that the large shareholders should have all the say in the management ot these institutions. He thought, they should have a good share in it. He knew that there were shareholders to whom the losing of £100 meant quite as much as the losing of £1,000 or more did to others. He thought that there were tome things that the Committee had not told them that they should have definite information about. They should be informed what were the securities and what they were worth. They had been kept in the dark too long about these things. They had been led, as it were, to the brink of a precipice, and now blindfold they were to bo a^ked to jump over. lie dirt not pay he had no confidence in the present directors. There were good and practical men among them, but he was not piepaied to take in all they said without knowing the reason why. He had shown his confidence in these directors in a practical manner— not by passing fulsome votes of thanks, etc., but by sticking to his interest in the Bank. He was not prepared to swallow all that was put before him by them. They should be told something more about the losses they had suffered — losses in Sydney, Auckland and elsewhere. With respect to anothet itcmin the report - and now he referred to the £160,000 amongst the director? — the shareholders ought to know something more about that. Even if he stood alone, he would not swallow that. He would propose, as an amendment, "That bctore agreeing to the proposal to write off the £3 per share, equal to 461 pncent, of the actual cash paid into the Bank by the shateholclers, it is desirable that further and more full information should be supplied." He would deal with that question now. For shares that were only nominally wotth £10, they had paid a premium of £3 per sharo, so that they had really paid £13 on each of these shares. The average payment, therefore, cost them £13 per share, and yet they were asked to wipe out £3 off the £10, so that out of the £13 they would only stand at £7. That newshareholderssbouldbeaskedtocomeinut par was monstrous. It was not right that this should be allowed unless things were much worse than they anticipated. The Bank had had a capital chance from the beginning, and had made money right and left from the beginning ; aad, in fact, if it had not made money largely then, it must have been absurdly managed, for everything made money in those days. The Bank would have been prosperous now if they had had as directors respectable, honest men of good judgment. But if they were lending money at the prices that weie going two years ago, or anything neai that, [ they were acting recklessly, and he claimed to know something of the matter, because he had some experience from his connection with another local institution. If they had been doing as he sdid, they were acting worse than recklessly ; they were wasting and squandering all they had got. With regard to that question of loss, two years ago they had £250,000 reserved, besides their capital. As the last gentleman had told them, ib had been customary to write off ten per cent, per annum on the Bank furniture, and this had been done for year after year, so ,that it represented a much larger sum in value. He wished to say another thing with respect to the management. They had been assured again and again from the directors' table that the Bank was not djing a risky business, but rather a safe one. And this wa^ what they called safe ! Nearly a million pounds had been lost. The directors had achieved what had never been achieved before on this side ot the Line. There was not a ring on all tlm side of the Line that had managed to lo^e ;i million a-* they had done. He hoped that those gentlemen who had been backing the directors up and crushing anybody dared to express an opinion, would ptopose a vote of thanks to the directors for what they had done. They had made themselves famous. The directois ought to give them a balance-sheet showing what things were. The writing off of capital was very serious, but it would not be so much so it they were not inviting fresh capital. If in n riting shares dow n to £7 they asked others t j come in at £10 it was not fail". He proposed the amendment he had read, and left it to anyone who chose to second it. He had at least done his duty. Mr Dingle : I shall not propose anything. I shall leave it to those who ate here. Mr Caleb Wallis was the next speaker. He thought they had a right to canvass not only the actions of the directors, but also of those who had assisted them. There were points that ought to be brought before that meeting that had not been geneialiy noted. In tho first place, they had been told by a leport— and a graver charge could not be brought against honourable men - that the business had been carried on so utterly recklessly that they had incurred the gravcot censure even if more specific means should not be taken. One thing this meeting should know was whether the Committee were satisfied with what the late directors had done with the £160,000 which they had pocketfced and squandered. Then, again, if the auditors had looked at the securities they should havo known something of the state of the Bank. It seemed that the auditors had merely appended their names bo the accounts without a spark of judgment. The auditors were the men who stood between the directors and shareholders, and if they found that they had simply come in and signed their names without inquiry, such action called for more eericus measures*. The position of the shareholders was a very serious one. They were called upon to give up a good business to" a number ot new shareholders. There was no account of the goodwill. They were supposed to take £7 for shares for which some of them had unfortunately paid as high as £24, although fortunately he did not do so. They were, in a word, to play second fiddle to the new shareholders, and he and others of tha smaller fellows were not to know anything more about it. There were those who said that those appointed

by the shareholders to investigate the accounts had, in tenderness to the directors, overlooked something. If this £160,000 which it was said the directors had quietly put in their pockets had gone, they ought to know who had had it. (Hear, hear.) There were honourable men who were supposed fco be honourable citizens all on the directorate. How were the shareholders to know who had the money ? A voice boside him asked "Who robbed the widow V" If they went through the list of shaioholders they would &cc many widows — that was true enough. Here were investments made for the support of widows and for other parties. JNow, how were the shareholders to know who were able men and who weio not? In this liquidation proposed — he did nob know whether he was exceeding his rijjht in going into this matter now — but he wished to speak with regard to the liquidation which had been l-ecommended — that these bad thingsfhould bepul.into aseparateiund. It came in with the proposal to strike oil' *3. They should have a separate luncl, m order that the thing might be kept out of the regular account. How were they to know otherwise on which side the balance was going ? The Chairman : When that resolution comes on 1 will explain, and you will get the lnlormation. Mr vVallis said that they wanted to have a lair and a good stock-taking. They wore to join partnership with sotnebocty el-c, and they wanted an honest and honoiuable stock-taking. They did not want either an overvaluing or undeivaluing ot their estate. The good, will of such an institution was surely worth something. He thought that boloio they gave up this great sum further information should be obtained, in order to ensure a real stock taking. He would second Mr Cheny's amendment, and he would &ay t.hat before the resolution was passed there bhould be further information given with regard to the leal estate. Mr Dingle said there was one other thing which lie wished to mention. There was £373,705 Is 3d set down — that \va» the landed property ol the Bank. The Committee told taem that about a quarter ot a million or about a third ol a million was gone, and. he now asked was it light or fail tha; the new shareholder should come in tnd receive the benefit ot this. They would pay their £10, and the old shaieholdeis, &oino of whom had paid JL2O, would have \o go back. Ho thought that the present shareholders should receivo some beneht in pioporlion with the new shareholders. It would be his view that they stiould go back to the £7. The new ishuc ought to bo ,t7, and let Lhom begin a new bank afresh. The Chahman said that, with respect to the new issue, the shares would bo ollcied first to the pie&ent sharcholde/s, and those not taken by present t-hareholceis would be otlered to tho public at a ,10 per cent premium. / Mr Dingle : I know that, />ut I don't believe they will take them Thoy may be taken up, it we see some/good directuis. Mr F. G. Ewington said ,that a lady who could not be present lad given him some questions to ask./ He thought it necebbctry to say a wor£ on otic or two points. Theie seemed to' be a disposition on the part ot feoinot-pealirs to impeach not only the Committee whqhad prepared this report, but they had ijso impeached the auditors and director/ Now, it waa very easy to impeach b/t it was sometimes \ery difficult to prov/ the impeachment. He thought that pc Committee who prepared this report vere deserving of the thanks ot the shareholders, and he had mo\cd a vote of thaiKS to them at the last meeting. That was the only vote of thanks he had ever mo\ed at the meetings of this Bank, buL turn the way m which Mr Cherry &milecj one would have supposed that he (Mr Ewington) had proposed every vote of thiiiks that had ever been proposed at the half - yearly meetings. (Mr Cherry demec the soit impeachment.) Those gentlemen i^io prepaied that leport must each ha\e D'Jo hundred shares m the Bank, and aceordiigtothe deed of settlement, auditois who undd took to audit their books were liable to a hife of £100. 'Che Chairman :|£'2oo each. Mr Ewmgton idded that fche^e gentlemen had consequently a great deal at btake, and that they mist, in their own interests, have looked carefully intomatteis. Therefore, on the lowe»iM'ounds, the shareholder might inter that tie Committee had given a tair statement of (lie condition of the Bank. It was a question 'or the meeting whether they c-juld give oo the shareholders any better infoimation than tint atloided by the report of the Committee. iVhen they bigned that bond they bound themselves body and soul to those men. Thej had given them lull powei, and tho Conmittee had gone tearlessly and caretully into the matter and they (the shareholces) ueie bound by hhat report. With regad to the auditors, well they all knew that a* a rule uuditoiV leports were a taice. r Jhcy simply went through the documents; handed to them They knew that the auntoro had not been over the hundiedt- of agencies ot the Bank all >\er the colonies. It would 'uve been quite impossible for Messrs '(. Y. Pierce and J. L. Wil&on to do that if they had taken the whole year foi that purpose. Therefore they must nt depend so much upon the auditors' reports as upon the returns ot the lispector's Department. He should c very sorry to bay one word agaiist the directors, and it was their dub, to bear in mind a lew facts. They all, knew of the great wave of depression whih had been lelt all over the woild and whih justified many of the losses of the Bank Wheat was now about half the price- i had been. Wool was considerably losVr than it was some years ago. Kent& .hcl come down also, frour yeais ago the Bak had refused £16 per week for pioperty i, Queen-btreet which was now let for £4 12s, 6d, while another place for which they hd received £7 10s per week was now' let for £1 10s. Under such exception!, circumstances it would have been one d the greatest wonders in the world lit the directors had not mad 6 some tnistakes. But it would be bebter for jthe (shareholders, inbtead of recrimiating, to see what they could .dc to make tilings better in the fub'ire. now the questions which a lady bharehokjr had put in his hand to ask were : — first " Was it a uecessary part of the arrangement with the English capitalistb, that th old shareholders should submit to a los of £3 per share ? She thin Us it very hard mt they) the new shareholders) should ha this advantage." The second question was" If thesecuiities on which the alleged- lo is made recoups the loss, will the oldshanolders have their £3, or any part of it re-i stated out of the realisation of the secures." He thought that if they could promo the interests ot tho old shareholders, tly should do so. (Applause.) The Chairman said thajwith reference to the first question he migjj say at once that of course in making re arrangements at Home, these pai 2s were made fully aware of the osition of the Bank just as they wore o here. They had *<had this report bei:e them and were cognibant of ul the facts. They were made awfi that £800,000

would have to be, written off, the whole reserve funoV together with £30,000 of the capital ot the shareholders. Tho resolution wos made bhat the original shareholders shall have the right to pay up, at somo future time, their £3 per share. With regard to the second question, he might say that the assets would all be paid into one account, and when the liquidation was finally completed all would share alike, whether it was profit or loss. Mr Reader Wood and others spoke at great length. Tlio Chairman, in the course of some remaiks, stated that, legal proceedings would probably have to be instituted with reference to fche transfer of certain shares to the London register. Mr Cherry's amendment was lost by a large majority, and the second resolution was earned on a show of hands, Mr Cherry be ne tho only dissentient. Mr Dingle said that ho thought all that was realised should go to the Reserve Fund. The Chairman said that the object was to keep them distinct. J!r Dingle asked whethor the General Government had been paid the enormous property tax upon property which the Bank really never possessed. The Chairman said that the Government made the claim, and the Bank could not help but pay it. Mr Dingle expressed his opinion that it was the duty of the shareholders to strengthen the hands (if the Committee. The Chairman remarked that while he wished to allow every latitude he muf-t tell Mr Dingle fiat what he was speaking about was not referred to in the resolution. Mr Dingle : Evidently the money has been paid. Mr J. M. Clark said that he intended to \ oto against Mr Cheiry's amendment, although he sympathised with a good deal that he had paid. He should support the motion, and he should do so because he thought that the motion was the best thing that the shareholders could do. The Committee had said m their icport that £300,000 of the capital and tho whole of the reserve iund inubt be wiped off to make the Bank shares worth 20s in the £• Such being the case, ho thought it would bo wiser to act in accoidance with the Committee's suggestions; and further, looking at the roport they would see that it was necessary to wipe oil £3 to get the new capital. To get new capital they must give capitalists something that v>as worth the price that was a-ked of them. Mr Cherry asked them to defer passing the lesolutions until lull information ab to the losses was laid before the shareholders. Well, the report stated that the losses in the Auckland district were about £400,000, but did not give the amount of loss in the Southern distiicts and Australia. lie did not suppose that the shareholders wished to have a balance-sheet showing everything that the Bank had done, together with a list of the mortgages and piobable losses thereon. That would be an action utterly opposed to banking piinciples, and also an injustice to the customcis of the Bank. At the same time ho did sympathieo with Mr Cheny and the remarks ol another speaker with regard to the clause in the report where it was stated that the losses through directors had amounted to £160,000. As one critic in the newspaper had said, the Committee went either too tar or not far enough. He did think that the Committee ought to specify those particular directors who had obtained the £160,000, and not to allow the chaiges to rest on the whole of them. They might then see whether the defence of the directois might not show that their action was justibed at the time. Another thing was that there were very graA r e and distinct charges in the report, made in a way that they rested upon the directors and management. One of them referred to the managers in Sydney and Adelaide, where it said, " that the selection of managers was in each case, to say the least, unfortunate." That implied that the Committee could have said much moie if they had wished. (Applause.) He should have thought that was quite enough. He questioned, in one instance, whether the appointment ot the manager in Sydney was unfortunate. They were not to suppose that he was in favour of appointing fast men as managers. But this he would say, that before the defalcations were found out it io had been asked who was their most enterprising manager, that one would have been pointed out. It was true that they had lo&t by him, but his energy and populaiity had built up a business which still remained. And it might be that the returns from that business in the future would make them look upon the loss as a kind ot bonus paid to obtain business. Howo\er,he felt satisfied that tho most that could be said upon that matter was that the selections were unfortunate, fie would now refer to another clause, that one referring to the £160,000 lost to directors. It was the end ot the clause that he wished to speak about. It was as follows : — "While certain transactions have comeunder our notice calling tor the gravest censuie, if not for more specitic action." The question was, what were those charges? His opinion was that specitic charges ought to be made (applause) in these mattei, or else these innuendoes ought to be withdrawn. But he would move no amendment, for he considered that it ouarht to havo been done at the meeting when the report was presented. He believed that the suggestions of the Committee were the best things that the shareholder^ could do. Mr Reader Wood said that he thought that it was only due to the members of the Committee that something specific should tako place with regard to the report rather than merely to put them in a formal manner as resolutions. He should have thought that the proper course to adopt would be bhat the report itself should be adopted by the shareholders. Id would then have been competent for Mr Clark or any other shareholder to have made any amendment which they chose. Now it was quite impossible to make amendments to clauses in the Committee's roport which were not referred to in the resolutions before theui. He thought they all agreed with the Committee in considering: that this loss had taken place. There was no use whatever on their part in crying over spilt milk, and he thought it was absolutely necessary that this t3 should bo written oft. He thought, and he believed the public at large did also, that they could accept the valuation put by the Committee on the securities as fair valuation, and that they placed the affairs of the Bank before them in a clear, fair, and business like way. But there were other parts of the report that were nob clear, fair, and business-like in so far as those to whom they referred were concerned. He would refer to the points to which he alluded. After stating what they considered the losses were, the report went on to say — "It is obvious to us that for years past the Bank has been paying a rate of dividend which ought not to have been paid. Securities have been held, and accounts kept going; in the vain hope ot a recovery of "the values placed upon them in what was, in fact, a period of inflation." That was a very grave charge indeed, and it reminded him of tho charge made ten years ago against the directors of the

Glasgow Bank. In paragraph 8, in reference to the business in Auckland, the report said: "The general character of much of the business carded on has been most objectionable and the policy pursued open to gravo censure." Well, when he read the report he was surprised that at this meeting gome resolution was nob proposed by the directors asking the shareholders to censure those directors. What was the meaning of this clause if it was not carried further and some resolution, confirming the report and censuihiß the directors, agreed to ? There were many things oi this class that should not be there at all, or being there, further action should be taken. Then, again, going further, in clause 12 they rend : — ''As regards the responsibility for this stateof things, the directors ms your nominees entrusted with full power ovei alltheoiliciales, are no doubt pumarily responsible ;" and then a few words? fiirthe 1 ", the name of the general manager is connected with that lesponsibility. What was the meaning ol that word "responsible" in the connection in which it was used V Did it mean something, or did it mean nothing? In his opinion, it meant nothing, for when lie looked at the language and then looked at the acts of the Committee, he saw the strongest contrast. He saw the directors blamed in language almost without measure, and at the same time he siw the majority of the Commiotee turned into directors and sitting alongside those whom they so strongly impugned. How was timt to be reconciled? Surely men of bu-ine-^s would say that if these directors had been so culpable, so careless, so unbusinesslike, or wh itever they liked to call it, ar* the Committee said they had— busine s men would s?ay at once, " While we thatnc you for your pa&t services, for the future we decline to have anything furth' 1 to do with your management ? ' Yet they were taking counsel with those very gentlemen whose counsel they say is worthies", and worse than worthless. How could these things be reconciled ? No wonder further information was asked for. Ec thought further information was required. He would go to that paragraph that had been referred to s-o often, had been referred to by Dr. Campbell in his letter to the "Herald"' that morning, and by Mi Claik in his speech: — "And, finally, wo find that advances have been made to ,-orae of the directors upon insufficient <-ecuiiby, and from these advances heavy loss has arisen, estimated by us as over £160,000, while certain transactions have come under our notice calling for the gravest censme." (Cries of " Read on — read on.") No; he would read on attev wards. He would like to know how they \\ ere bo censure those whose names they did not know, and how were they to censure for a transaction whoae nature they were not told V Then it was left to go all over the world that the director^ of the Bank of New Zealand had taken £160,000 and divided io amongst them, when he knew that there weie diiectors who had never hail a tingle sixpence ot the Bank's money, and by whom the Bank had never lost a shilling-. AA hj should this vote of censure be allowed to rest on them all '? It should bo passed on the li^ht one..-. They should have the fullest iniormation and a full explanation. What were the names ot those director on whom they were to pas= a vote of censure ? Then to continuo with the paragraph he was reading, "If not for more specific action." If woids meant anything those woids meant that certain directors had incurred legal responsibility ; in that case pioceedings should be taken against them. ("Hear, hear !") In the interests of truth, in the interests of justice, these pi oceedingsshouM be taken. Lei the challenge thrown down by Dr. Campbell in that morning's " Herald " be taken up. If a legal responsibility had been incuned let proceedings bo taken that this should not be bi ought before shareholders smarting under the loss of their money, but before a tribunal careful and impartial. The Chairman had said that the work of the Committee was clone, but he (the speakei ) thought they would luue to cro further. Justice demanded that they should go further. Then he came to what was to him the most incomprehensible portion of the Committee's report: — "Theconncction between the Bank and the New Zealand Loan and Mercantile Agency Company, by the chief and other officials of the Bank acting for (he Loan Company, and being interested in the working of both, has not. for many reasons, been advantageous to the Bank, and should on no account be allow to continue, as we consider it has been unduly favoured by the Bank." Were they to accept that upon tho//>se dixil of the Committee, when they had not a single fact in .support of this allegation '! They said they had reasons, and he was reminded of Falstaff, " For if leasoiiH weie as plentiful as blackberries, yet would they have none of them." Justice demanded that teaoons should be given, and if thi^ statement was not supported by iactfe, they had a ptoper light to dismiss it as unwoithyof consideration. He did not know what it refenedto. He was a shareholder in the Loan and Mercantile, and had been at great pains to see what theie really was in this allegation. He would tell them something that would show that this statement was very considerably exaggerated if not altogether unfounded. The factw as the Bank had never lost a single sixpence by its connection with the Loan Company The Loan Company had never received any undue favour of any kind in its business with the Bank. It had been placed by the Bank on precisely the same footing as large business firms in the city, as Nathan and Company, and others of that kind. The Company had no advantage over them, while at the close of the last half year it was in credit with the Bank. It was quite true that some years ago the Loaii Company was under considerable obligation to the Bank. But the Bank had loaned its money as to a large company with a large amount of uncalled-up capital, and on valuable securities deposited with the Bank against the overdraft. Well, that was banking ; and if every transaction that the Bank had had with its customer^ had turned out as well for the Bank as its transactions with the Loan Company they should not be to-day mourning over the loss of a million of money, but on the other hand they should be anticipating in a few days to come large and hand&ome dividends. (Heai*, hear.) It seemed to him to be a most extra ordinary and inexplicable thing that the only customer of the Bank mentioned in this report should be the Loan Company, by which the Bank has never lost anything at all, whilst the names of gentlem< n who had had the squandering of the Bank's money to any imaginable extent were carefully withheld. In the last paragraph of this report there was a sort cf attempt to draw a parallel between the Australian colonies and New Zealand. It was not the first time that such a parallel had been attempted to be drawn. Two or three years ago, when Dr. Campbell was President, he drew a parallel of the same kind, and he said that the depression in Australia was rather worse than the depression in New Zealand, whilst at the same time he noticed that the presidents of the Australian banks said that the depression and the state of aflairs in New Zealand were worse than they were in Australia ; so that, perhaps, balancing the two, we

r might say they were pretty much on a par. The main cause of the depression in Australia was the unprecedented continuance for years of a very heavy drought ; bub, as soon as the rain from heaven fell upon that soil, grass sprang up in every direction, cattle fattened, and an amount of prosperity almost immediately came over Australia that is now the astonishment of everybody. Did New Zealand rise? Theie had been rain enough here, Heaven knew. (Laughter.) We had not suffered from drought, but still we were suffering from this depression, and nobody could tell when it would lift. Now, there mutt be a causo for this difference. The causes of tho depression in New Zealand were various ; some of them, no doubt, would be removed. There was, first of all, the fall in agricultural produce. That is in course ot removal, and no doubt some relief will be felt in consequence He supposed a stop would be put to the system which had been carried on for a long while by various financial corporations allowing people to play at the game of heads I win, tails you lose, with other people's money. (Hear, hear.) That would be removed, he had no doubt, and there would be some relief iclt in consequence ot that. There would not be so much inflation ; but the real causo of the depression in JSew Zealand was the monstrous debt that was hanging over v«, and the reckless manner in which that money had been expended. (Hear, heui.) It had been spent in such away tl.at it had brought almost no interest at all for the capital that had been disposed 01, and necessitated a heavy taxation upon the people of this country to enable them to meet tho liabilities that the Government had imposed upon them. They had to lemit out of the earnings ot the people of this country 1J millions ayeur to pay the bondholders in England. . A million and a-halt a-year went away from 600,000 people — trom their earnings. That money which ought to go to improve the condition of the people, and to improve the circumstances ot this country, was sent away to be spent elsewhere, without a ghost of a hope of any of it being returned. His opinion was that for years to come New Zealand would be heavily handicapped by this enormous debt, in the stiuggle ior piosperity with other countiies who.-c finances had not been ot such a reck less character, and which were placed by nature under more favourable circumstances. It was not his intention to move any amendment in tbe direction in which he bad been speaking — viz., with legard to further information with reference to all those votob ot censure, and insinuations, and innuendoes that he had referred to ; and he would e\en go so far as to ask Mr Cherry to withdraw his amendment, because he knew perfectly well that it was impossible tor any shareholder with any hope of success to light against the strength of a duectorate where the directors held numbers of shares and many pioxies, aud had large influence. It was no use putting these things to the vote. Ail he could hope to do, and all Mr Chciry could hope to do, was to try and get the uiieebors themselves willingly to give the nfoimabion that they asked. Whether they would, or whether they would not, he did not know ; but he did know this, that if they did noi. in the opinion of mat:y shareholders, and in the opinion of a large part of the outside public, it would be thought that the Committee had not taken the shareholders into their confidence as they promised to do, and as the shareholders themselves had a right to expect. (Applause.) The Chairman : I may point out that in order to supply full information as to the causes of the loss of this tBOO,OOO, it would take days and weeks. It took us months to go through it. We can merely give you totals. I may say, however, that for instance, in the North Island the loss has been almost entirely in Auckland, The amount lost in other parts of the North Island is a mere fraction. There was a considerible loss in the South Island, and the remainder is in Sydney and Adelaide. Taking the whole million— £Boo,ooo now— and the previous sums written off during the last few years, the losses are made up in this way. The loss* in Auckland is nearly £500,000,and in the rest of the North Inland it is practically nil, In the South Island it is about £250,000, and in Adelaide and Sydney it is £250,000 more. Mr Cherry: Distinguish between Adelaide and Sydney. The Chairman : I am only speaking from memory 1 think they are about equal sums. A Shareholder : When you speak of Auckland, do you mean the Province of Auckland ? The Chairman : Yes, Auckland generally, In the remarks which Mr Reader Wood made with respect to the Committee, as one who had had so much experience in commitees of this kind and work generally, he must have been aw are that if we had gone into everything — for instance, it we had gone into eveiy specific item in a large business such as the Bank's, it would have meant an immense report. I may say that it was in the interests of the Bank and the shareholders that the Committee kept their teport down to as moderate dimensions as they possibly could. They said as little as possible, and it was in the interests of the Bank that they did so. If the Committee had said less than they did, the shareholders present would perhaps have been the first to say that the Committee had attempted to shield those who have had bfce management of the Bank for the last twenty years. Mr Reader Wood also referred to the directors who were censured and who are still on the Board. He made a distinction between new and old directors. Well, if the old directors have not that respect for themselves under the circumstances to resign, and appeal to you again, we have no power to remove them. Then with respect to the Loan Company, the Committee have not said anything more than that — in fact, they have been very mild indeed in that respect. You must nob forget that the great evil of this connection has been that managers in different places have been acting for the Loan Company and for the Bank at the same time ; that is where the mischief has been done. And as to saying that the Bank has not lost but has gained by the Loan Company, 1 give you my own opinion that the Loan Company has been a curse to the Bank, and it can be proved. (Hear, hear.) The managers of the Bank have been made use !of in every possible way. I may mention one case, which occurred some years ago, to show you what has been done in that way. The managers of the Bank, who were acting for the Loan Company were asked to sell shares for the Loan Company, and in order to induce people to buy these shares they advanced the Bank's money for the shares, and held them as security, and when the individuals who bought these shares, and who were also doing business with the Loan Company, got indebted to the Loan Company, the Loan Company turned round and claimed a lien upon those shares, and they hold them at this, moment. I can go further than that in speaking of the Holt frauds in Sydney. The manager at Sydney first robbed the Loan Company of £10,000, and he held it for a considerable time, and when the Loan Company pressed him for the money, he took the money out of the Bank's

coffers to pay the Loan Company. In tact, he committed a fraud on the Bank, because he deceived the officials," who did nob know whether he was acting as manager of the Bank or of the Loan Corhpany. When this question came up you would naturally expect, whore a manager was acting in a sort of dual position, if he did not take the part of the Bank, at any rate he would have remained neutral. What did our late general manager do? He turned round and said the Bank must pay this £10,000, and we paid it. That is how tho Loan Company affected the Bank. I will go further, and say that in their dealings in financial matters they have had very great advantages at the expen&e of the Bank, and the Committee are quite ready to prove it. (Applause. ) Mr U. L. Murdoch : Statements have just been made which I think are just as far from the trubh as the t-tateraents on which I have already commented. Holtieceived a cheque from the Loan Company for transmission to a customer of the Bank in Melbourne, and pocketed it as manager of the Bank. TheChaiiman ; He received this cheque as manager of the Loan Company. Mr Murdoch : He, at, manager of the Bank, received from there presentativesof the Loan Company a cheque for £10,000 for transmission to Melbourne, and in his capacity as manager of the Bank he pocketed that £10,000, and is it fair, is it honourable,' to turn round now and say that in consequence of the connection between the Loan Company and the Bank that J ordered the payment of that £10,000? The Chairman : I did not say you " ordered " the payment. I said that you took the part of the Loan Co)r>pany against the Bank. Mr Murdoch : You did, sir. The Chairman : I said you took the parb of the Loan Company as against the Bank. Mr Murdoch: l r ou said that I ordeied the payment. I utterly deny it. I expressed my opinion in regard to the liability of the Bank, but I defy anyone bo say that I "ordered" the payment of that £10,000. The Chairman : Captain Colbeck, who sits by me, says I did nob say you gave an " order. " All I said was that Holt took the money out of the Bank, and he was enabled to take it out of the Bank in consequence of hi 3 holding a dual position. I said, when the question came to be settled as to who were to bear the responsibility, you took the part of the Loan Company as against the bank. Mr Murdoch : I am quite willing to accept your intention not to have said so, but I will go further, and say that I have seen the correspondence which took place be tween the managers in Melbourne and Sydney as to the transmission of this £10,000. and it was on that that I expressed my opinion as to the liability of the Bank. Application was made by the gentleman to whom this £10,000 belonged, bo the Loan Company to accept the money as a deposit, and the manager of the Loan Company in Melbourne referred to the manager of the Bank in Melbourne to see whether this £10,000 had been received or not. The manager in Melbourne wiote to the manager in Sydney that this constituent of the Loan Company had expected the transmission of this £10,000. The manager of the Bank in Sydney wrote back, stating that the money had been received, and would be transmitted on a certain date ; and then you coolly inform the shai-eholders that it was in consequence of my connection with the Loan Company that this £10,000 had been lost to the Bank. I think it is a most tinwarrantable conclusion. The Chairman : If you A\ill excuse me again, I do not think you are fair to me. What I said wa>* when the question came to be settled with the Company, who should bear the loss, you book the part of the Loan Company against the Bank. Mr Murdoch : I think I can appeal to the shareholders thab this is not what you said. I give you credit for having- intended to s<sy something else, bub you didn't say it. As to your further charge against the managers of the Bank representing the Loan Company advancing the funds of the Bank to take up shares, is that a most wonderful transaction? A company intends to issue shares ccustomer of the Bank would be very glad to take up some shares, and he goes to the manager of the Bank and asks if he will favour him with an advance to enable him to take up shares. The manager does so, and holds a lien upon these shaies until the advance is paid. Is that a very remarkable transaction, or one which is the least deserving of censure ? The Chairman : 1 referred bo the manager of a bank, who was also acting as agent for the Loan Company, inducing people to take up shares in the Company by advancing money to buy them. Mr Murdoch : I cannot speak of any manager having induced people to take shares ; but I can only say it is a most reasonable transaction that if a gentleman — a customer of the Bank — wants to take up shares in any company, that he should go to hi& banker and ask him to supply him with the money if he has not it by him at the time. The Chairman : My cause of complaint is that a manager of the Bank should act as agent for the sale of these shares, and induce people to buy shares from the Loan Company, and advance them money to do so. A shareholder : Was the money lost ? Mr Murdoch : I think thab is a very reasonable quesbion to ask. The Chairman : The same parties were doing business with the Loan Company. All the shares were held by the Bank, but the Bank has not at the present moment full possession of those shares, because the Loan Company said they had a lien on them. Mr Murdoch : And a very reasonable thing too. I think you are mixing up complicated questions that only confuse most of the shareholders without accurate information. Exception has been taken to the connection between the Loan Company and the Bank. Thab is a mere matter of opinion. I may say when I came to New Zealand in charge of the Bank of New Zealand, I found that the Bank was most lamentably deficient in ibs squatting connection. 1 found also that the agents who had possession of this squatting connecbion were most unpopular with the squatters, and that the rates of business were as high as from 17 to 20 per cent. ; that these unfortunatesquatters were mulcted in that. It struck me at once thab it was a good opportunity not only to form a connection with a new company which was bound to be successful, but that it wouldalsobe a valuableally to the Bank, and I drew out a prospectus and forwarded it to London for the consideration of the Board there. It was done, and the company at once floated into a successful business, a business that was of very material use to the Bank, and of very material profit to it. Very large exchange operations resulted, and the Bank got the benefit of them. It may have been that latterly the connection has not been so benefical, but I can say that the connection generally, from the year the Company was started, has been of very material benefit to the Bank. Ido not for a moment dispute that individual , cases may not be quoted in which tbat connection may have been a disadvantage. j do not for a moment dispute it, but I say

i advisedly that the general connection with > the Company has been most advantageous j to the Bank. Ido not know that there is i any other point in connection with the i statement made from the chair that I need ' now refer to. >' JMr Cherry: I put a question at a pre- » vious meeting about the lossos caused by ■ the manager at Sydney, and I was in- • formed that at the very outside they wculd amount to £12,000. Now we are informed that the loss was £125,000. The Chairman : I must correct Mr Cherry. I said the whole of the losses at Sydney amounted to about £120,000. I did nob say the whole of them were connected with Holt. Of course, it was while ho was manager there. Mr Cherry : In asking the question I did not refer to his personal losses only. Mr J. M. Clark : The question was, what the Bank had lost by the defalcations of the manager at Sydney, and it was to that question he received the answer " about £12,000." Mr Cherry: I do not wi&h to dispute with Mr Clark about the words?.. Mr Holt was manager at the timo, and I did not simply wish to know what he had appropriated to himself. The Chairman : His personal defalcations were, of course, very much over C 12,000. There is the one item I have reicrred to today of £10,000 alone. The Chairman asked Mr Cherry if he would withdraw his amendmont, and Mr Cherry declined to do so. Mr Cherry's amendment was then put, and negathed by a larse majority, only some ten hands being held up in support of it. The Chairman then said : The Committee, obviously, could not be prepared with a reply to all that might be said at this meeting. But, as I havo already told you, they predetermined to consider their commission closed. They have been at great pains to arrive at con ect conclusions, and they have been at equal pains to state these conclusions fully and explicitly. Nothing set down in the report was passed without mature consideration, full discussion, and, I would add. the evidence of Board minutesand other records. As the Chairman, Mr Justice Gillies, told you in a pointed manner, the report was unanimous. The men whose names are appended to it nve not nobodies, or persons without experience of affairs. They are representative of all parts of the colony. They took up this Bank when it was in grave danger of falling to pieces, and they have already done much to rehabilitate it. They therefore decline to open contro\ ersy with anyone unless the statements of fact in the report are challenged seriously. For the opinions they express and the conclasions they arrived at, that i& on their responsibility, you may accept them or not, but thejr are not matters for dispute. On the other hand, the\ considet they haA T e claims to be heard by you, when they recommend, in the interests of the Bank as j a whole, that having received the ComI mittee's report and expressed your own views, you now let the matter rest with the Board of Directors to take such further action in legaid to the past as may seem proper. One part of our report has especially challenged comment : that in which we allude to losses by directors. We did not say that these directors took your money, or that the others permitted it to be advanced in any corrupt manner : and we respectfully decline to publi&h names. The phrase about more specific action had refeience to dealings by the Bank in its own shares, which we consider illegal and prohibited by Act. and improper, and as to which the Board ma\ take moie specific action. In connection with adduces to diiectors we did not hesitate to censure the whole Board, becau&e we consider it especially incumbent on directors to see bo it that undue advances are not made to individuals of their own number, a duty obviously difficult for officers of the Bank to perform effectively. Some directors weie probably passive, or perhaps even objected. I wish now, however, to make some remarks of my own. I mean they are not to be considered as authorised by the Committee, because we have had no chance of con&ulting properly about them You have, I suppose, all seen a letter of Dr. Campbells in the morning paper. I have every respect for Dr. Campbell, and I think his fault has been to be too easy and let things be done he perhaps did not altogether approve of. I think, therefore, his letter should be taken notice of, though what I have to say is hastily put together. Dr. Campbell did not give us much time. As a member of the Committee I have given much time to the investigation and have read the minute books and examined accounts. I noted downsome of the minutes that referred to accounts that losses were made by. Dr. Campbell says, " Were the securities insufficient at the value of the day ?" Well, here is a minute dated 14th November, 1882 : "It was reported to the Board that after consultation with the majority of the Board the following reply had been sent : — ' Patetere Company must not be a failure, at the last moment. Let Kich make necessary subscription, taking hia guarantee irrespective of any guarantee here which I am endeavouring to arrange.'" At this meeting: there were present Messrs Browning, Firth, Stone, Owen, Clark, Williamson, and Campbell. They appear to have made no remark ; very likely they thought it useless, the telegram to London having been approved by a majority of the Board. Whether Dr. Campbell was of this majority, Ido not know. He was present, and made no objection. I need not apologise for naming this Patetere Company ; it is a public company, and pretty notorious. What was the security ? Why, the shares your money was advanced to pay for. How was this company floated in London ? Simply by your directors, or rather the majority, whom the general manager consulted, advancing your money to a lot of dummies. Your money then went into the hands of other people ; big commissions were paid ; lots of money spent ; once into it, the Bank got drawn in bit by bit. At the very last Board meeting we had to advance more money to pay a call, some thousands, or elselose everything. As it is, a very big loss of your money has come out of that company floating. I do noc know whether it is what Dr. Campbell calls proper business for a bank. I think it was a discreditable piece of business altogether. If I had more time I might havo given you other minutes that would have interested you ; but it is needless. I say that a lot of your money has been lost through land speculations. If the ridiculously inflated prices had continued certain parties would have made money anJ been reckoned very smart. Naturally, they did not continue, and your money is lost. I would also remark an extraordinary feature connected with the losses of this Bank, namely, that where the losses were made to companies and individuals you will never find that these individuals became bankrupt. Oh, no ! All their other creditors were paid 20s in the £, but the poor Bank had to stand in the gap and pay the piper. I will next notice the sentence about more specific action. Dr. Campbell pooh-poohs it ; another director asks us, did we mean criminal prosecution ? I will tell you what I meant for my part. We found in the accounts one named James Williamson, share account, overdrawn £16,170— 0ne of the loss accounts. We, of course, inquired into it, and we found that

two or three years ago it was resolved to transfer some shares belonging to certain persons to the London register. To make up a good parcel, the Bank bought some of its own shares, which we say is illegal, and these with othors wero put on the London market ; that market was what is called fed with them, but the appetite was not very good — (laughter) — they went slowly. I remember in London about this time last year, or later, there was a good deal of talk about the Bank, it having passed its dividend. There ore a great number of shareholders in Great Britain, poor families with limited, means, maiden ladies, widows and orphans, entirely dependent on the Bank for years. It was no trivial matter to these people. Reassuring cablegrams wero published. One of them, I rememher, said, " With any levival have no reason to fear trenching heavily upon the reservo fund." This was a deliberate falsehood, and no one knew it better than the directors and the general manager. A shareholder at Home showed me that cablegram, and asked me if I believed it, and I said "Certainly not." When 1 camo out here and found how ibings l'eally were I thought that rather queer, but when I found that about the time this telegram was published shares of fcho following persons were being sold on the London market I thought it more so. Tho pat ties were the New Zealand Loan and Mercantile Company, Jas. Williamson, J. C. Firth, and T>. L. Murdoch. Ido not know what those who bought those shares now think about it. I am sure of one thing — they will not think more specific action out of placo. But tins is not all. These shares and some others, including the shaxes the Bank bought, were supposed to be sold pro rata, and, in fact, some of partios including the Loan and Mercantile Comp;iny,gottheirsharooftheproceedfc?, For some leason the late Mr Williamson claimed iirst slice, a claim difficult to allow, because others already had their share. However, lie ultimately got it at your expense, because he got the money at Uie rate of about £21 per share, and you have tho shares still on your hands. This is the transaction which Dr. Campbell speaks about as "from its inception, in the Bank's interest." I will do Dr. Campbell the justice to suppose that he knew very little about xt. lam sure that in this, as in other things, he allowed himself to be used by people more cunning than himself. I will not take up your time any further with Dr. Campbells letter ; not that I have not any more to say if necessary, but I have said enough at present. (Applause.) Mr Murdoch : Mr Chairman, may I bo allowed a few words with reference to your remarks. Very grave charges ate levelled at me amongst others in connection with a certain share transaction, and I have very little hesitation in giving a frank account of what that transaction was. It was resolved by the Board that 3,000 shares should be added to the register in London, and it was detei mined that any shareholdeis within the reach of the executive — The Chairman : The limited circle ! Mr Murdoch : Well, we will call it the "limited circle" then — (laughtor) should have the privilege of transferring their shares to London to make up those 3,000 shares. Was it for the advantage of this "limited circle?" The arrangement was that those who put their shaies in should get the local market price. The diflerence between the local market price and tho price in London was at that time £7. Whose was to be the £7? The "limited circle's ?" No ! sir, the Bank's. The Chairman : The Bank did not get it. Mr Murdoch : Did not get it ! Was the " limited circle " blameable for that ? The Bank did get a very considerable portion of it. It got all the profit made on that sale of shares. Unfortunately, circumstances have arisen which have depressed the price of shares, and turned what should have been a veiy large profit into a loss. But I am not aware thao there is anything in this transaction for which either the directors or myself need blush. 1 had 100 shares in this transaction. It was undertaken three yeors ago, and how many shares have I sold ? Seven ! Was it with any desire to clear out of the Bank ? I had other shares on the register heie. Have I attempted to sell them ? They remain as they were three years ago. The Chairman : I made no reference to your shares, it was to the transfer generally, but I will go a little further and say that it may yet becomea question for a Court of law, so that the less said about it the better. I think it was an illegal act, and therefore the shareholders are bound to be held harmless. Therefore the present directors will have to proceed against the directors at that time, and it may become an action in a Court of law, so that the less said about it the better. It Dr. Campbell had not referred to it in his letter to-day I should not have taken any notice of it. Mr Murdoch : I think your statement, prior to the one just made, is of a character with many ol the statements in the report dealing in innuendo, and leaving a sting that is meant to be very mischievous, and , damage the credit of those referred to. . And you think it right that no further : notice should be taken by those connected \ with it, and that they should lie under the , imputation made ? ', The Chairman : I say that immediate ! action will have to be taken against tho ; parties who are responsible, and therefore, perhaps, it is better in the meantime that j nothing more should be said. Mr Murdoch : I think it is a pity, then, that you should have said so much. The Chairman : I should not have spoken ' { of it had not Dr. Campbell referred to it in ( this morning's paper. ( Mr Murdoch : If you are going to take ( immediate action you should have done so , without further reply to the letter. But if ' it is the opinion. of the meeting that no- ( thing further should be said about it, I am , quite willing that it should remain. Dr. Campbell, in his letter this morning, ( pointed specially to the tact that the trans- ■ action was undertaken in the interests of ' the Bank, and that the Bank was to have \ the whole of the profit. That was incon- '. trovertible. Again I assure shareholders , that as far as those who contributed the \ shares were concerned, there was to be . no advantage. They could have got the same price they got out of this transaction if they had put their shares on the ' local market. The Bank expected to make , a large r>rufit by the transaction, but be- ' cause it turned out to be a misfortune in- . stead of a success, the parties were to . be held up to public reprobation. It was most unfair. , Mr Justice Gillies : Will you allow me to . remind him of one transaction ? Why were \ those local shares to be transferred to the '. Home register ? It was in order to keep ( up the share value heie, and that can be i proved by the minute of the directors re- J solving to send them Home, stating that j there was a large number of shares coming , on tho market here, and they were bound 1 to be depreciated. It was not in the ] Bank's interest. 1 Mr Murdoch : I am right in insisting , that it was in the interests of the Bank. Ifc surely cannot be held that if there were { large numbers of shares to be placed in the market, and so shares became depreciated, that this would be in the interests of the Bank. "' ; Mr Justice Gillies : Ifc was nob fair to (

• those who were^ to buy, bolstering up the market. , > Mi- Murdoch :* It was no bolstering up on the part of those who contributed the shaves. Mr Justice Gillies : I am not speaking of them, but of the action of the Board. Mr Murdoch : The shares were transmitted because London offered a better market for them than the local market, and the profit was to come to the Bank. The second resolution was agreed to, Mr Cherry being the only dissentient. * The Chairman said in regard to the third resolution, he wished to explain that, owing to an inadvertence, the words, "at their option " were not inserted after the word "directors" in the notice of this resolution. He would therefore movo, as an amendment, "That the words, •at their option, 'be inserted after the word ' director ' in this resolution. 5 ' Motion agreed to. The Chairman said in regard to the third resolution, it was necessary to explain that the directoi's did not intend, for some time to come, to give effect to it. They believed thoy could not legally do so without an Act, and preference must be given to the new issue with which this would conflict if it were permitted now. When, precisely, the option could be given it was impossible to say ; it would not be till the money could be profitably utilised. He would therefore move the third resolution as amended. Mr C. E. Button seconded the motion. Mr John Graham wished to speak to the resolution. Scarcely a year or two ago they could not have thought, when buying shares at £20, that such a rotten state ol things could have existed. It was very had on those who, after a long life of hard work and self-denial, had endeavoured to invest their money in what they supposed was a sure investment, that they should have arrived at such a state of affairs as> had been placed before them that day. It was truly lamentable. There wei'e a number of persons he was acquainted with, who had worked hard and lived near to the wind to provide for their old age, and they had invested in these shares believing that nothing could be safer. Could not the proposed action of the directors to write down the value of the shares be in some way modified, so as not to come with such crushing foice upon the shareholders as it appeared to do at the present time ? They feel it keenly — he was not only speaking for himself, but for others witn whom he was acquainted - that their shares should be reduced to £7, and that an advantage should be offered to complete strangers in the matter of taking \ip shares. The Chairman explained that the shareholders were to have the option of taking up shares in the colony at par, and to the outside public at 10 per cent, premium ; that i.«, £11. Mr Graham asked how would it be with those poor shareholders like himself who had invested their all. In looking about for an investment what could be more profitable than the Bank of New Zealand ? That of all others was the most sure. He thought that the directors or the Committee should endeavour to make this more gradual, and not comedown with such crushing force on the small shareholders. He had drawn up an amendment that would speak for itself: — "That the premium on all shares shall be £3 per share, and that the same premium be allotted to the old shares that have been reduced to £7 per share, and that in all future divisions of profits and before declaring any dividends, a small bonus shall be added to such old shares from time to time until the said shares are restored to the original sum of tlO per share." This would in some way ease the working part of the shareholdei s, the orphans and the widows that had been so often .spoken about, of the loss they would sustain by having their shares reduced. The Chairman said the Committee could quite feel with those who wero placed in the position which Mr Graham had just stated, and he could assure them when the Committee — who themselves represented some 1,500 or 1,600 shares — came to know that there was nothing else to be done but to write off this £3, they looked at it in every possible way, to see if it could possibly be avoided, and they nlwa* & came back to the same point, that it could not be avoided, and he thought they came to the right conclusion. It was the only action to take. They might have made a call, as they were em powered to do, but shareholders would have objected to that. As soon as they found that the loss exceeded the reserve fund, it was impossible to avoid it. Be- ; sides, they should understand that all the arrangements made at Home were on that undei standing — that this £3 was to be written off. Mr Graham withdrew his amendment, i and Mr Dingle asked if the shareholders were bound to pay up the £3 on their £7 when called upon. The Chairman said no. It was optional, but he hoped it would bo to the shareholders' advantage to pay up. Resolution No. 3 agreed to as follows :—: — "3. That the directors at their option be empowered to receive from shareholders willing to pay the same, £3 per share to reinstate their shares to the original amount of £10 per share, and on all shares so reinstated to pay dividends on the original amount of such shares. Provided that such payment to re-instate shares shall not render the shareholder liable to pay any further or larger amount than he would have been liablo for if the shares had remained at £10 each, as originally created." The Chairman said, as to the fourth resolution, he would explain that the directors proposed to put all accounts and assets which, being of a doubtful or undesirable character ought to be realised as soon as judiciously may be, into a separate department, under the more immediate supervision of the directors. Some of these accounts might turn out worse than was expected, others better, and if they took these surpluses or deficiencies as they occurred into profit and loss account of each half-year", it would occasion fluctuations misleading and perhaps injurious. It was expedient, therefore, that the directors seek the authority of the shareholders so far to alter or suspend the operation of clause 99 ot the deed of settlement, and he moved accordingly. Mr Wallis said he understood that the Bank was going extensively into farming operations, and he was afraid if that were so, being a farmer himself, the loss would be excessive. In case of any loss, would that be met by a further reduction of the value of the shares ? The Chairman hoped that if things went on satisfactorily, there would be no loss at the end of the time. With regard to farming operations, the Bank had to take certain properties, but did not wish to hold such properties any longer than they could help. Many properties might be sold now at the sums advanced on them. As to holding these properties he could assure him that it was no wish of the Board of Directors to hold them longer than they could help, but they did not wish to sacrifice them. They would be got rid of, and they were being got rid of During the last 3ix months properties had been sold even above the valuations, and offers had been made for others at the valuations. They would be disposed of as speedily as possible. Mr F. G. Ewington seconded the motion. The fourth resolution was then put and carried, as follows: — "That the several

assets and accounts held for realisation, and outside the category of what may be regarded as ordinary and current business, be liquidated by the directors as speedily as may be, having regard to advantageous realisation thereof, and that in the meantime such assets be transferred to, and held and treated in globo, in a separate liquidation account, and so as that surplus, in realising any one asset, may be set against deficiency in realising any othor without passing such surpluses or deficiencies , respectively through the ordinary profit and loss account." The Chairman moved the fifth resolution, which dealt with the formation of a reserve fund. The directors thought it better that shareholders' hands should be free in this matter, so that, if they thought fit, surplus profits might be simply carried forward as the half-yearly rest, and this would be the effect of the alteration proposed. The clause as it stood made it compulsory to devote part of the profits every half-year to the reserve fund. They wished fib do away with that, but it would still be open to the shareholders and directors to propose that a certain amount be placed to the reserve fund. Mr C. E. Button seconded the resolution, which was put and carried as follows :—: — "That the words beginning 'And if,' in clause 102 of the deed of settlement, to the end of the clause be, and the same are, hereby deleted. " The sixth and seventh resolutions were then adopted as follows: — "That, in disposing of the new shares created and authorised to be issued by the resolution of the special general meeting of proprietors, held on the third day of tober last, the Board of Directors may make it one of the conditions that payment for such new, shares may be made by such instalments as the Board of Directors may think fit. "That the directors are hereby requested and empowered to apply to Parliament for statutory confirmation of the resolutions passed at this meeting." In regard to the seventh resolution, the Chairman stated that it was formal, and had reference chiefly to the power conferred under the third resolution to accept £3 per share on old shares, and which required legislative sanction. The Chairman announced that there would have to be another meeting to confirm these resolutions, because the halfyearly meeting was to be held on the 22nd instant, and ib was necessary that all these matters should be cleared up before that date, so that at the half-yearly meeting they should be able to start afresh. The rough minutes were then read, and the proceedings terminated.