BANK OF NEW ZEALAND. HALF-YEARLY GENERAL MEETING. NET PROFIT FOR THE HALFYEAR, £32,607. AT THE RATE OF SEVEN PER CENT. PER ANNUM. Auckland, October 22.

Te Aroha News, Volume VI, Issue 311, 27 October 1888, Page 6

BANK OF NEW ZEALAND. HALF-YEARLY GENERAL MEETING. NET PROFIT FOR THE HALFYEAR, £32,607. AT THE RATE OF SEVEN PER CENT. PER ANNUM. Auckland, October 22.

:'The half-yearly general meeting of share. * holders of the Bank of New Zealand \va s 'held in the banking house, Queen-sfcreet, at noon to-day. There was a fairly I large and representative attendance. fMr George Buckley, President of the i; Board of Directors presided. Amongst <~ those present were Sir Frederick ; Whitaker, Mr Justice Gillies, Dr. '-Campbell, Messrs James Russell, F. « Battley, G. P. Pierce, R. McDonald, Scott, E. Hesketh, J. Probert, A, O'Niell, J. Newman, W. McDowell, W. J. Wilson, F. L. Prime, F. Cherry, D. S. Murdoch, Rev. D. Brace, A. Boavdman, J. Batger, J. McLachlan, C. Houghton, R. Fry, S. E. Hughes, R. McMahou, Rev. R. Sommerville, J. L. ' Wilson, J. M. Clark, R. C. Carr, Rev. P. Mason, R. Buddie and many others.

, REPORT AND BALANCE-SHEET. The fifty-fourth report of the directors ".was submitted in printed form, and was taken as read. It' was as follows :—: — \ The result of the half-year's operation is as followß : —Net profit for the half-year ended 29th September, 18S8, £32,607 2s sd; to , which has to be added balance from half--year ended 31st March, 1888, £25,861 8s 3d; making a total available of £55,4681058 d; which it is proposed to appropriate as fol- - lows : —To payment of a dividend at the rate of 7 per cent, per annum, £24,500 ; balance carried forward, £33,968 10s 8d : .total, £58,468 10s Bd. The dividend will be payable at the Head Office, Auckland, ' to-morrow (Tuesday), the 23rd instant, and Jat branches on receipt of advice. —For 'rtthe Board of Directors, Geo. Buckley, President. Aggregate: Balance-sheet of the Bank of New Zealand at 29th September, 1888, including London Office at 31st July, 1888.

We hereby certify that we have examined the ■ accounts of the Bank of New Zealand for the half-year ended 29th September; 1888, and that ' "we hare counted the cash balances and exam- • ined the bills and other securities held at the • head office, and compared the returns of the V branches with the statements in the foregoing i balance-sheet, and have found the same to be £-£'3K£ } A^ to - Chairman, in moving the adoption report, said : On this occasion we HPeient to you our half-yearly report under exceptional- circumstances. The Bank has .undergone a trying ordeal ; and while the result, in certain aspects, has been ' reassuring and even encouraging, the - conditions have been in some measure paralysing to our ordinary operations, f and therefore unfavourable to the earning ~ot profit. You will, no doubt, scan tne figures of the balance-sheet with more than • ordinary interest, to see for yourselves how the Bank has fared under the experiences of the last twelve months ; and I now, without further perface, review those figures by .way of elucidation. An ill ■ important feature in a Bank's balance - sheet is the cash resources it is shown to command. In this respect I think you will agree that the position is strong, and therefore satisfactory. Our coin in the colonies and cash balances with London bankers amount to \ £2,300,000, and money at short call in '. London £460,000,— in all, £2,760,000 ; bedsides £350,000 of bullion in hand or in transit. Such figures speak for themselves. - 1 will only add that, as compared with last half-year, there is an increase in ' cash resources of £500,000. In deposits there is a decrease of £300,000; which, by r itself, is no doubt a considerable sum, but, ' upon a total of some £9,000,000 is insignificant;, and, in view of the circumstances sxn*^^y,hiteh the Bank has been placed, |*such a is, I venture to say, fjgratifyiiigiand even surprising. Bills IreSeiyable \ie le3S by £800,000, which jps'Jfiuctuation due to the less active |half of the year, when there are Sfew" or no wool bills current. Ordinary |adyanceß are less by £150,000 — a ginatter « rather of choice than of neteceasity. The larger apparent decrease fihown in the balance-sheet is caused by ithV amount written off. On the whole, yro have been doing less business, and \ keeping a larger cash reserve — a policy im,<posed on us by prudent regard to existing but which, as I have already said, necessarily curtails our earning power, lessened by lowered value of Ijmoney and less active trade, of which most fjpf .us, are, in one form or another, personally cognisant. The net profits for ittfelhalf-year amount, as you^see, to £32,607 |ps\'sd, oufc of which we propose to declare a tcUjyidend at the rate of 7 per cent, per iaMiiium — absorbing £24,500, and leaving i£§!iO7 2s 5d to be added to the amount carried forward, which will fcfien. stand; at £33,968 10s^ Bd. The Bum available would have admitted of a tugfier dividend ; but it must be born in Sninilifchat'we.are yet in the convalescent iSE^gj^and do well to go soberly. This SBttjome" of so large an aggregate of businesajas Jour balance sheet shows would be SiUfcburaging if our aesets were all available Kcpll earning profit, which, uniortunallljfti^tliey^ are not,. If they, were, we ||nwld>^have much more,, satisfactory ,

results to set before you ; and we' hop© ere long to attain that gratifying position, because it will be our immediate care to realise these unproductive assets, as speedily as it may be done with advantage, and make the proceeds available to the very material increase of your returns. We believe we shall be assisted in this by better times and brisker trade, of which there are already palpable signs. You will have observed that settlement on the public lands has of late been more active than for many years past. There is a noticeably increasing inquiry for property, while sales have taken place at prices something more than encouraging. From any such improvement in the general state of the colony, you may hope to profit in a double sense ; more of your resources will be set free for legitimate employment, and employment for them will be more remunerative. I need hardly add that we shall not neglect to see what can be done to increase net profits by judicious retrenchment and concentration. You are aware that it is proposed to increase capital of the Bank, and you have been fully informed of the reasons for this sbep. We are glad to be able to say that we have satisfactory assurances that the capital will be readily taken up. Sir Frederick Whitaker rose to second the adoption of the report and balancesheet. He thought with the other directors that the shareholders might fairly be congratulated upon the report that had been read and the observations of the chairman. There was no doubt that the Bank had gone through a great ordeal, and he questioned if there were many other institutions of a similar character that would have faced the same ordeal and come out of it with the same success. There were one or tyro questions in the report to which he would like to draw attention briefly. The first was with reference to the profit and loss account. They would find, then, that the net profits during the half year amounted to £32,607 2s sd. This sum would have enabled the directors to declare a much larger dividend than that given, but on the whole he thought they would agree with him that it was more prudent to pay a smaller dividend and carry a larger amount forward to the next halt-year. The amount carried forward was £33,968 10s Bd. If they would look at the statement of accounts, they would find that the coin and cash balances at the bankers, money at short call in London, and bullion on hand and in transit, which meant assets to hand when required, represented a much larger sum, and placed the Bank in a stronger position. These facts were worthy of consideration. He now begged to second the adoption of the report. Mr Reader Wood said that he thought the report was quite as satisfactory, perhaps more so, than could have been expected by the shareholders after all that had taken place with reference to the Bank. But what a commentary was this report on the numerous delightful half-yearly reports which the shareholders had at various times received, assuring them that every bad and doubtful dependency had been fully provided for, that the reserve fund was intact, and that everything was strictly sound and secure. Yet by this report they found their losses had included the whole of the reserve fund and £300,000 capital —so large a sum that he thought that were they not accustomed, unfortunately, to deal in millions without knowing the meaning of the term, they would be absolutely astounded at the enormous character of the loss which their Bank had sustained. He thought that, for many reasons, it was unfortunate they should know nothing more of these losses than the large round sum that represents it — that the Directors bad declined to give any details of this loss, or to tell the shareholders how it had come about. He thought that was the more unfortunate, because in the few details that they had had they did not fairly represent the facts. There was one detail which the President gave them the other day which required further examination. He referred to that part of the President's speech in which he stated, " There is an account of one James Williamson. Overdrawn share account £16,170, one of the loss accounts." Now, hefancied that it musthave occurred to almosteverybody who had read these words, how could it get about that there was a loss account of £16,170 through the late James Williamson ? For surely, if the account was overdrawn to that amount, his estate was liable, and all the directors had to do was to come down upon that estate. Yet it bad been telegraphed throughout the whole colony that there was some loss through the late Jas. Williamsons share transactions of £16,170 to the Bank. Yet it would be found upon examination into this matter — if anybody took the trouble to examine -that the late Mr Williamsons shai'eaccountnever wasoverdrawn £16,170, that he never had £16,170 of the Bank's money advanced to him for anyshare transaction, and that the Bank had not lost a single sixpence by Mr James Williamson; but that, on the other hand, the Bank had £16,000 of Mr Williamsons money, which Mr Williamson found it very difficult indeed to get out of the Bank. Now, that was a fair statement of the transaction. He had seen the correspondence and could say that it would support the statement which he had made, and he simply mentioned it because he was sorry to see the good name of a gentleman like Mr James Williamson traduced in the manner which it had been — a gentleman who had occupied such positions in the colony, and also in connection with the Bank — a gentleman who unfortunately was now dead and could not speak for himself. He had therefore contradicted the statement in the report of the Committee in the hope that it would receive the same publicity which had been given to the report. (Applause.) Mr Rose said that no doubt many of them were aware he had for many years been the representative of Mr James Williamson. He could therefore vouch for the accuracy of Mr Reader Wood's statement. He thought at the time that the Chairman's statement was made that it was very objectionable. He knew that the general impression in town was that £16,170 had been lost through Mr James Williamson, and. he could state that,as representative of Mr Williamaons's estate, they were quite willing, and proposed to meet in Court any attempt to recover that money. (Applause.) Mr Law rose and said that perhaps it was well that the meeting should know that he was that disreputable individual, as they had been told — the late manager of the branch of the Bank of New Zealand at Adelaide. He was the man whom the report had held up to all as having recklessly squandered the money of the Bank. But he should have more to say with regard to that later on. He was there to defend his character, but he did not wish to trench upon the question raised by Mr Reader Wood, although he must say that his name had been mixed up with figures amounting to £800,000 — figures of which he knew no . more than the man in the moon. But he would nob deal with that until Mr Reader Wood had- been dealt with. He thought with; that gentleman that they

ought to have laid before them a clear statement of the losses. It ought to belaid upon the table by the directors, and he asked t iat it should be done. Ifc was absolutely necessary, under the deed of setUen.enb, that this statement should be laid upon the table. He had further remarks to make, but at that stage he would ask that the statement should be laid upon the table and deal with the other afterwards. The Chairman asked that the question should be repeated as he had nob quite caught it. Mr Law said that he saw that there was in the deed of settlement a clause — clause 118— which made it absolutely incumbent upon the Direotors to lay upon the table a full statement of what the losses were. Now he asked, and he supposed it was what Mr Reader Wo "d wanted also, thata statementof those losses should bedisclosed to the meeting. [Mr Law here read clause 118, which is to the effect that in the event of the losses being equal to one half the capital it should be incumbent upon the directors to report the full losses to a genei'al meeting of the shareholders.] What ho said i.ovv was that they had no such statement, and this loss of £800,000, with which his name waslinked together in that disgraceful report — for he did not hesitate to call the leporb disgraceful — well they had not those losses disclosed, and that clause made it incumbent upon the directors that it should be done. They were entitled to it, for it was their property. The Chairman said that fortunately their losses were not yet equal to one half of the capital. Mr LaM : That is going round the questions altogether. Mr Justice Gillies explained to Mr Law that he had not understood the meaning of the clause in the deed of settlement. It said that such and such should be done if one-half of the capital was lost. Well, onehalf had not been lost. Mr Law • I beg your pardon. Mr Gillies : I don't know whether Mr Law is as good as a banker as he is at construing this deed o f settlement. Mr Law said that he must thank the previous speaker for his gratuitous information and explanation of the clause, but he might tell him that it was imperative upon the directors that they should lay that statement upon the table, and he for one would have it. The Chairman explained that the losses were only £300,000. Mr Law " That's near enough." The Chairman said he must appeal to the shareholders. Mr Law had already occupied some time. He might say that they had met Mr Law on Saturday with reference to the Bank's affairs iv Adelaid. He might say that Mr Law objected to having been dismissed two years ago. Mr Law : I still do so. The Chairman t-aid they had of coarse declined to go into that matter. There were statements in the report that Mr Law desired should be contradicted. He might state that the Committee had devoted the whole of one week to going into that matter. They came to the conclusion that in Adelaide money was squendered in a manner that could only be considered reckless and disastrous. He had asked for an explanation of two items. and the only reply they could get was that he had been deceived, and consequently the loss had resulted. Such answers fully confirmed the Committee in their first opinion about those two transactions. Mr Law said that they had heard the lucid and able explanation of Mr Buckley, but he had not answered his request with regard to the statement of losses. He ,had referred to his (Mr Law's) conduct in Adelaide, and he might state that he was perfectly prepared to go into that in the fullest- possible manner in order to explain anything, and failing that, he was prepared to explain matters in a court of law. If he could get justice in no other way, he would get it in a court of justice. At all events, the point they were at now was, what it was incumbent on the direotors to do, and he took it thac it was their duty to prepare and lay on the table a statement of their losses, some of which were now denied. As regarded the figures relative to Adelaide, he could deny that any blame attached to him in any shape or form, and he now referred to losses that it was possible to avoid. As ho had said, if he was forced into that position, he would fight the matter out in another sphere. He had met the directors in an honourable manner, and he appealed to Major George, Captain Colbeck and others if that was not so. And now he was prepared to go over the whole subject again. " What they wanted now was a statement of the losses referred to by Mr Reader Wood and denied by this other gentleman. Sir Frederick Whitaker said he would like to draw attention to the fact that this was not k the business before the meeting. They were not there to inquire into the losses in Adelaide, or whether Mr Law's management had been good, bad or indifferent. But looking at the erroneous way in which Mr Law had read the 118 th clause in the Articles of Association, he did not wonder at him making a good many mistakes elsewhere. Now, he asked, what had been done by the directors ? They were not aware that such losses had occurred, but believed, after the closest investigation, that there were such losses. In view of this fact, and finding that there was an evident want of confidence in the concern, they recommended that a committee of inquiry should be appointed. The shareholders took the same view of the matter, and approved of this course. The Committee were therefore appointed, they had reported, and their report bad been acted upon. !Now, not only was it a fact that they were unaware that such losses bad occurred, but it was also a fact that the statement that they had lost one-half of the capital was not true. If they would look at the report they would see that the Bank premises and landed property were set down at £373,000, so that it was a question in point of fact whether a loss had occurred, if the assets ' referred to were favourably realised. This, howevei 1 , was not the subject ior consideration to-day. The report of the Committee of inquiry had been read and acted upon, and that was past. With regard to Mr Law, he would just say they had given him a great concession in allowing him to speak half a dozen times. At a meeting of this character a man was allowed to speak once, and if every man was to be allowed to speak as often as he pleased he would like to know when any such meeting would come to an end. He would have called attention to this matter before, but he knew Mr Law had a grievance, and was unwilling fco interrupt him j but as Mr Law had had his say half a dozen times, the time had come when the meeting should" confine itself to its proper business, viz., observation upon the report read to-day. Mr Law said he quite agreed with the remarks of, Sir Frederick Whitaker, and tKanked him for 'the considerate way in" which he was. pleased to make his remarks. He (Mr Law) had no wish to traverse matters outside of , the j proper domain, and he had ,no.? object except in r .'a "kindly". and , friendly, spirit

Ito express his ' views as fco whether he thought the matter had been fairly and justly dealt with. He had come a long way, and he thought he had.a right to be heard. He was prepared to go through these matters thread by thread, and he was prepared to move that the report be not read, that it be not received, and that it be not approved of by the shareholders, or by any of the directors, until these directors, under clause 118 of the Deed of Settlement, had done what waB incumbent upon them. It was not a matter of will, a mere freak, or what they thought should be done in the interests of one or another. A man scarcely knew whether his own account had a balance or whether it had not. Ho pressed that this report be neither read, received, adopted nor entered into until the directors had fulfilled this clause 118 of the Deed of Settlement, by which it was incumbent upon them to lay before the shareholders a full list of the Bank's losses. They heard a gentleman who he (Mr Law) did not know toll them that he represented the late Mr James Williamson, who for years and years occupied a distinguished place in tho counsels of the Bank. Although Mr Williamson wa« not there to speak for himself, his name was handed down to them and what he had done should not b6 forgotten. His representative now present, who was a younger man, challenged tho statements that had been made, that the deceased gontler^an in truth — and all he (Mr Law) desired was to go into facts in the light ,'of. truth, as he wanted to be judged himself in relation to affairs at Adelaide — this gentleman had openly challenged them so far as Mr Williamsons indebtedness to the Bank was concerned, and he said that the items referred to in this way were not true. He moved, •' That the reporc be not adopted until a full and complete list of the losses of tho Bank has been laid before the shareholders in accordance with Clause 118 of the Deed of Settlement." Mr Cherry seconded the amendment. He believed that the shareholders had a perfect right to know where their lossed were sustained and by whom the money was lost. It. was not a question of looking into accounts that were still runnng. Directors in a public company had no right to say to the shaieholders, " You should know no more than we choose to tell you," and he contended that every shareholder had a right to know by whom these losses had been made. It had been stated that their losses did not exceed half a million capital, but taking" two years ago and from that time till now he found the amount of their losses was £993,500. At tho previous meeting ho had stated that the amount in l'ound figures was close to a million, and if his figures were disputed he would prove each item from the books ; if anybody said that they had not lost a million of capital — Captain Colbeck : I say that we have not lost half of the capital. Mr Cherry said that leaving that question on one sido the shareholders had a perfect right to have a list of their losses. If the directors did not wish to publish them to the world they could ask the reporters to withdraw, or if any man published them in the papers he could do it at his own risk. He intended to ask another question in any case before the report was adopted. He was going to ask whether the position of auditor was a purely honorary position or whether the auditors were paid. The President : The auditors are paid £50 per annum. Mr Cherry added that in that case £50 was presented to two gentlemen for auditing the accounts. If they had audited the accounts they surely muyt have known that the balances shown and placed before the shareholders for yeais were not correct, and not justified. By what had turned up now it appeared that the auditors were paid £50 each as a gift. That question was raised some years ago at a Bank meeting, when he (Mr Cherry) asked what weie the qualifications of an auditor. He received the answer that it was necessary to hold 200 shares. Tho position of the shareholders was this, that they knew a number of fellow-shareholders by sight, but they did not know which of them had 200 shares. This was only known to a select circle, and the office of auditor was simply passed about from one to anouher. He also wished to ask whether there had not been a system of passing shares from one to another to qualify fordirectois and for auditor. He thought it quite possible seeing the way in which things had turned out. Mr Edwin Hesketh said he would not have risen except for the remaiks that fell from Mr Rose and Mr Reader Wood. He did not intend to advocate the laying before the meeting of any statement of losses, but with great diffidence he would venture to suprgest what in his opinion was the meaning of the Deed of Settlement. It appeared to him that the object of the clause was that,no matter whether there was a reserve fund or not, if there was a loss equal in amount to £500,000, a statement ot the particulars of it should be laid befoie the meeting of theshareholders (Hearhear). There was a reserve fund, it was true, quite sufficient to pay the whole of these losses, but if so Lvrge a loss had been made he would with great diffidence mention the view that they were entitled to take this clause to mean that if so strange a loss had been made a statement of the same should be laid before the shareholders. No matter whether there was a reserve fund out of which it could be taken or not, the shareholders wore entitled to this, for the simple reason that the clause does not say "if half of the subscribed capital is lost," but "if losses have been made equal in amount to half of tho subscribed capital." Then when they went a little further into the clause they would find that at a subsequent meeting power was given for the meeting to write off losses-from what? From capital. The opening clause stated losses which had been sustained equal in amount (it did not say anything about the reserve tund at all), and he ventured to lepeat that the view he had taken was the proper reading of that clause. (Hear hear and applause.) The President said that with respect to the question raised as to the meaning 1 of the 118 th clause in the Deed of Settlement, ho thought that the shareholders could answer for themselves and that the meeting could see that it was merely a matter of opinion on the part of two or three gentlemen as to how the clause should be read. When the AttorneyGenoral and others who were learned in law had given quite a different opinion to that now put forward, he did not think it was for the meeting to decide upon. He might say, however, that he had carefully read the clause, and that he did not think it conveyed the meaning suggested by Mr Hesketh. If the latter was correct they would have to do everything over again de novo. (Mr Law : ",Yee of course "), He understood that the losses were what'remainedafterdeductingthe reserve fund and the profits. If they did not deduct the profits, how could they come to this loss, and the reserve fund "... , was , merely reserve profits which had . not ,been paid away. He thought it was as s clear as could bo, and

that the questions I'aised > were only a quibble, However, he did not think ib was for the shareholders to decide such a question. It was a question' for the solicitors of the Bank, and they were not present. He was sure in ' his own mind that the clause was never intended to operate in the manner indicated. He granted that if their loss had been half -a - million, after deducting the reserve fund, that would be another matter, but the loss was not half, but less than a third of the subscribed capital. Mr Law here arose to address the meeting, but was assailed by cries of "Order" on all sides and resumed his seat without having had an opportunity of indicating what he wished to cay. The President that with reference to the remark made by Mr Cherry, that he believed some resolutions were to be brought forward with reference to a change of auditors. That would be the proper time to go into these matters of auditors and of their qualification. With reference to the previous balance sheets whether they were right or wrong, that was no business ot the directors. The balance-sheets were certified to by certain persons who were responsible for them. Neither was it any business of his own (the President's) as to the loss being one million. If Mr Cherry would refer -to what had taken place at the pi*evious meeting held on the 12th inst., he would see that he (the President) stated distinctly that the loss now reported upon and previously written off did amount to about one million, and that lie gave details of the different places where that loss hadoccurred, The amendment moved by Mr Law was i then put to the meeting, and negatived by about 30 against 7. I The President before submitting the motion for adoption of the report and balance, said that he desired to reply to some remarks made by Mr Reader Wood to the effect that the Committee declined to sro into details. The Committee had given in their reoort all the details that could be given, and had explained how the losses came about as particularly as they could. Were they expected to go through every item, A, B, and C and so on through the whole alphabet ? A voice : No, but you can publish the names. The President added that as for publishing tho names they could nob do so under the terms of the deed of settlement. As regarded Mr Williamsons name, he was sorry that any remarks he had made should have been taken as zeflecting on him. He simply referred to the share account as he found it in the books, The remarks he made were these (quoting from newspaper report ot the speech) : — " We found in the accounts one named James Williamson share account, overdrawn £16,170 — one 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 shaies belonging to certain persons to the London register." Now, that meant that; £16.700 was £1 per share in 16,700 shares paid to Mr Williamson. Be hud then gone on to explain about this share account, and would not take any notice of the means, because it was well known that it was an illegal action and prohibited by the Bank Act, and must have come out some time or another. He then said (quoting again) :— " But this is nob all. These shares and some others, including the shares the Bank bought, were supposed to be sold pro rata, and, in fact, some of the parties, including the Loan and Mercantile Company, got their shax-e of the proceeds, but for some reason the late Mr Williamson claimed first slice — a claim difficult bo allow, because others already had their share. However, ho ultimately gob it at your expense, because he got the money at the rate of about £21 per share, and now you have the shares." Mr Wood held that the loss was through the Bank's blunder, and not through Mr Williamson. The shares referred to by Mr Thomas Rus&ell were Mr Williamsons shares. The President said he had explained that they were to be sold pro rata. Mr Wood : Then why did Mr Williamson not receive his pro rato quota ? The President : He would have received it. Mr Wood : It was never offered to him. The President said the matter in dispute between Mr Williamson and the Bank as to whose shares were sold was referred to the Board, and they declined to give a decision, but the money was afterwards paid out of the Bank to Mr Williamson. It proved on enquiry that the money was paid by the general manager, and he said he paid it by authority of the Board. The minutes had however been searched, but no record of the authority could be found. However, that matter would be settled hereafter. Now, he asked, did that in any way reflect on Mr Williamson, except that he got his first slice out of the shares instead of pro rata. Mr Wood asked why in that case they did not recover from Mr Williamsons executors. Instead of Mr Williamson getting the proceeds of the sales on his shares, he got nothing, and would have had nothing to-day unless he had threatened the Bank with a writ. The President replied that they had examined the records of the Bank, and tound no record of this. If Mr Williamson threatened to issue a writ, he should have done it. The whole thing was complicated. The Bank had got mixed up in it, bub they had no right to be concerned in it. as it was an illegal act. Their duty as special auditors was simply to make a note of it. This ohey had done, and it would be inquired into again. All he would say was that he did not intend to reflect on Mr Williamson in any way. The motion for the adoption of the report and balance sheet was then put and carried with only one dissentnent voice.

MR LAW'S GRIEVANCE. Mr Law asked whether they did not think, now that the half-yearly report had beon adopted, that they should have the statement of losses before the meeting. He did not wish to interrupt the meeting, but he was very anxious that the Board of Directors should proceed with the business in a proper way. The Chairman ruled that Mr Law was out of order, as his amendment had been negatived, and asked the meeting to support him in his ruling. Mr Law claimed that he was perfectly in order. His amendment was that the statement should be submitted before the report was pressed. Now that the report was read, he was in ordor in asking that the statement of the losses should be submitted. The Chairman again interrupted Mr Law, and calling him to order, said he did not see why the time of the meeting should be taken up in this way. Mr Law continued speaking while he was being called to order, but was Btopped by cries of • ' chair. "

QUALIFICATION OF AN AUDITOR. Mr A. Boardraan then rose to move the resolution of which he had given notice afe the last meeting relative to the qualification of an auditor. They would all know what was meant by these resolutions. His object was to place the Bank, with regard to. audit; in the same position as all the other " joint stock

companies jwith which he was associated. He had examined the articles of many other institutions, and in none of them was there a clause providing for the qualification of an auditor should be the ownership of at least 200 shares. This 'meant that no man could be appointed an auditor of the Bank unless he held Bank stock to the value of £2,200. He had searched the bank return? for a good while, and found that in Auckland there were very few shareholders outside the present and past directors of the bank who held more than 200 shares. He doubted if there were even six or seven outside those he had named who held that number. His proposal was that the whole of the 95th clause in the Articles oi Association should be omitted and a new clause notifying the qualification for an auditor substituted. His proposal was similar to the rule in the Loan and Mercantile Agency, New Zealand Insurance Co., South British Insurance Company and other similar institutions, and was nothing of his own. If his motion was carried he would propose other resolutions altering: words so as to adapt the third and fourth clauses to this new article. Mr Boardman then moved :—: — re Clause 95 : That the whole of Clause 95 be omitted, and the following substituted therefor: "The auditors need not be members of the Company. No person shall be eligible as an auditor who is at the time of such election interested otherwise than as a member in any transaction of the Company, and no director or other officei of the Company shall be eligible during his continuance in office." Mr O'Neill seconded the resolution. The President said there was no doubt that efficient audit was a delicate question, more especially when the Bonk had branches all over the world. He would read to them what he had to say on this subject. The President then read as follows :—: — The object of Mr Boardman's proposed alteration is to give shareholders greater scope in the selection of auditors, in the hope of securing more elaborate audit. The need for this depends upon what the functions of auditors are held to be. The business of a large bank, having numerous and widely scattered branches, obviously cannot be effectively audited by even professional accountants, who de\ote only a short time to the work, and are remunerated with £50 a year. Nor is it in the matter of audit that the trouble has been in this Bank. The losses by fraud or dishonesty have been very exceptional, and on the whole trivial, and, such as they have been, auditors would not have discovered them. The gentlemen who have acted as auditors appear to have adequately discharged the duties prescribed to them under 'the 98th clause in the deed of settlement. There is no question of incorrectness in the books or balancesheets of the Bank. The balance-sheets certified to by these gentlemen were correct as set forth from the books and returns, by which auditors (even profesbional accountants) must go in verifying balance-eheets. Because even if it were contemplated that they visited branches— which it evidently is not —they could not possibly vint them all simultaneously so as to certify to the correctness of assets at one given dale. If the idea is that auditors would value secuiities and detect bad debts, a very little consideration will show that this is quite beyond the scope of such audit, and the power of such auditors, as the deed of settlement provides for. Nor could professional accountants do it unless they became permanent officials of the Bank, devoting their entire time to the work. It is the duty ot the directors to provide for supervision of this sort ; they may fail in their duty, but so might auditors appointed directly by the shareholders. The directors are in fact, and must necessarily be, the representatives of shareholders in this matter. It is the business of the shareholders to appoint efficient directors; if they fail to do so, they will not mend matters by appointing auditors to do the work of the directors. The practice of all large banks with numerous brandies is, as it necessarily must be, to entrust this part of their business to the directors. In America the Government exercises certain supervision, but there the system of banking is different and lends it&elf to the Government audit, though there are plenty of instances to show that, as compared with the English system. Government interference in America does not secure shareholders against heavy losses. Y\ hile we doubt if the alteration proposed would be attended with much advantage, we think that the qualification for auditor is too high. We had in view several alterations in the deed of settlement, which we think desirable, but have not thought this a suitable juncture to discuss them. If Mr Boardman is disposed to withdraw his motion for the present, we undertake to go into the subject next half-yearly meeting, and to bring it up then with the other alterations I have alluded to for the consideration of the shareholders I will only add that of course, if these alterations are carried, they cannot come into force till next year. Mr Boardman said he would be happy to fall in with the views of the Chairman in any way. He had purposely abstained from the question whether :the audit ot the Bank had been efficient or not. The point with him was whether the audit should be conned to four or five outside the past and present directors. He, and indeedeveryoneelseabouttown, feltstrongly that the present system was a periect farce, and that such d. clause as this should be expunged as soon as possible. In his investigation of the Articles of Association of the Company's he never saw such a clause. It simply prevented effective audit. In London now it was the custom for chartered accountants to audit the accounts oi public companies, and confidence was thus inspired. He hoped the directors would meet the shareholders fairly, and he meant not only i>he shareholders here, but in the South, in Australia and in England, and take measures so that the audit should not be tied up. He asked them to remove this objection, seeing that they were co - partners in the concern. He had great pleasure in accepting the assurance of the President that the directors should take the matter into consideration, and with the permission of the meeting he would follow the suggestion made to withdiaw the resolution.

THE CHARGE OF FALSEHOOD. Mr Murdoch said that at a previous meeting remarks fell from the Chairman, and at the time he had only a hazy recollection of the matter which was referred to. Therefore he could not venture to make a reply. The meeting on Friday last was called for a special purpose and he could not venture to introduce what would probably be debatable matter on that occasion. Therefore, he took this as the earliest opportunity to reply to the remarks in question. He would bake the opportunity and refer to a telegram of a re-assuming character sent to London about this time last year after the Bank's half-yearly meet ing. He was not the author of the telegram but he recognised it, and would assume his share of the responsibility. It was sent on the be9t information at the disposal of the Bank, and with the , object of lessening the excitement in London which must have proved very , much i detrimental to the interests of the Bank. J

Ifc was *not ' sent' in ' consideration of "the as&ebs of the Bank, as* ii the Bank was going into, liquidation, but a reasonable estimate ot the position at that time, and the message especially pointed to a condition in caso of revival. Now, he thought they would 'admit that not only had the revival' not taken place, but that the depreciation "which had existed a year ago was, up to the last week to two, much more pronounced, therefore there was no possibility of a recovery. But the statement made by the president to this meeting was that this statement in the telegram was a deliberate falsehood, and no one knew that better than the directors and general manager. Now in all fairness he would a&k the President to remove the stigma from the gentlemen who occupied the position of directors at that time and from himself. He did not ask him to credit them with grpat judgment. He could blame their judgment if he liked, but all he asked was that the President should remove from them the imputation of untruth. The President, replying to Mr Murdoch, said that when he made tho statement referred to he spoke a great deal from memory, but he had obtained a copy of the cablegram referred to, and he held it in his hand now. He had made that cable a great deal more favourable than it really was. At the time he was speaking from memory, but since then he had obtained the copy itself. It was now before the meeting, and any of the shareholders might see it. He would read it to them. It was as follows :—": — " We have no fear of trenching heavily upon the reserve fund." There it was — there was no mistake about it. Now, with regard to Mr Murdoch's further remarks he could only say that with his knowledge as a shareholder at that time he did not believe it, and now that he had fully gone into the matter as a member of the Committee he had no reason to alter his view. Either the General Manager and directors were grossly ignorant of the actual state of the affairs of the Bank at the time that cable was sent Home, or the statement was untrue. Therefore he positively declined to withdraw one word that he had said, as he believed still that it was a falsehood. Mr Murdoch said that with regard to that matter, the Chairman could not say in the future that he was not afforded an opportunity of denying what he called a malicious libel.' Now with regard to the cable referring to the Patetere Company, and the very mixed manner in which the Chairman referred to the floating in London of that Company, and of certain large commissions which were paid. Now he asked any gentleman then present who was in that room last Thursday whether they did not receive the impression that the money for the floating of that Company and payment of the commission was not obtained from the Bank of New Zealand. At that meeting he could not fully xemember all the circumstances connected with the floating of that Company, but since then the thing had come back slowly to his mind. The Bank had made large advances to certain constituents on the understanding that the Company would be floated in London. At the last moment i*-- appeared that the floating of the Company would prove a failure unless certain shares were taken up by colonial proprietors. Rather than let the Company fail, advances were made to enable proprietors to take up those shares. As to the floating of the Company the Bank in London had nothing to do with it. It was floated by a " limited circle " which the chairman had been intimately associated with for many years and very lai*ge commissions were paid to members of that limited circle. He only wanted to remove from the Bank reflections which the remarks of the chairman conveyed in his relation of that circumstance. The President : I ask Mr Murdoch to explain my connection with the limited circle referred to by him. I should like the explanation, as I had nothing to do with it. Mr Murdoch said he thought his statement was quite distinct. He then repeated his previous statement. The President : I wish Mr Murdoch to explain fully. There can be no objection. 1 suppose you are not under any obligation to secrecy in the matter ? Mr Murdoch said he thought there would be an objection. The President said that he thought he was entitied to an explanation, but since Mr Murdoch would not give it, he could only reply geneially to what had been said. Now with legard to the Patelere Company, it appeared to him so far as he was able to jndge that perhaps it would have been better if the Company had never been floated, for the Bank stood to lose £70,000 by that transaction. However, he did not withdraw anything he had said with regard to that. Now for the limited circle. They all knew how companies were floated — how some 1 persons were paid at times to take up shares. He believed that the Patetere Company was attempted be be floated, by the Union Bank, and he had heard that a member of a firm with which he had once been conjj nected had taken up shares in that Company. He referred to the firm of Dalghetty and i Company. He had, however, had no connection with that gentleman for many yeai-s. That was. however, the only way in which he could be connected by Mr Murdoch in the matter. He was, if he remembered rightly, in England at the time the Company was floated. He did not then know much about the Company,but he had heard that some parties were paid big commissions, and that they were paid by the Bank. He had not anything whatever to do with it, and had had no connection with the firm of Dalghetty and Co. for many years.

DIRECTOR. There being no further discussion, Mr Browning proposed that Mr John McLean should be elected a director of the Bank,, he being the only candidate. This wasseconded by Mr A. K. Taylor and adopted unanimously.

AUDITORS. On the motion of the President, Mr J. L. Wilson and Mr R. McDonald Scott were elected auditors for the ensuing term. Mr Wilson thanked those present for his election, and referred to the good work done in the past by the retiring auditor, Mr G. P. Pierce. He said that some persons were dissatisfied with the auditing, thinking that auditors should visit all the branches, and be acquainted with all the details. That was clearly an impossibility. •Some on the other hand, seemed to think that all the auditors had to do was to .walk into Bank, shake hands with the inspector, and then the thing was done. That idea was also erroneous. He could " tell them that the accounts had to be .examined very faithfully. He had himself fallen upon trouble some timewhenan amount of work was involved. Mr Murray briefly returned, thanks and then read the, rough minutes,\ which ter.minated the business. * •

Why does a soulptqi\ suffer a dreadful fate ?— He makes faces *aiid bust's.- ' ' Bedouins' believe-" that" the corset, is a>o device of wicked men,to',kill their wiyes.

- rDr. To amount transferred to Bad T - and Doubtful Debt Account £ s. d. 500,000 0 0 . Cr. ; By balance from last half-year. . £ s. d. 500,000 0 0

V t Eeserve Fonx>.

Dr. To dividend on 100,000 shares of £7 each, at rate of 7 per cent. per annum ' Balance carried forward.. £ s.d. 24,500 0 C 33,968 10 £ Cr. By balance from half-year ended 31st March, 1888 By net profit for half-year ended 29th September, 1888 . . £58,468 10 £ £ S.d, 25,861 8 : 32,607 2 I " v< -.~ £58,468 10 I

Profit and Loss Account.

Cr. Coin and cash balances at bankers Money on short call in London . . iJ&nlMon on hand and in transit. . Government securities Bills receivable and securities in London Bills discounted, and other debts due to the Bank Landed property, bankpremises, &c _ £ s. d. 2,303.213 5 6 461.228 17 9 353,093 15 11 19,377 9 0 640,593 4 11 9,069,390 1 2 373,382 16 4 £13,220,279 10 7

Assets.

Dr. Capital paid-up.. £1,000,000 0 0 Xi ess amount X t written off to Bad and Doub tf ul Debt Account 300,000 0 0 £ s. a. i i - Notes in circulation , Bills payable in circulation Deposits and other liabilities „ Balance of profit and loss 700,000 0 0 479.510 0 0 1,262,647 1 8 10,719,653 18 3 58,468 10 8 £13,220,279 10 7

LIABIUTIES.