THE NEW BANKING BILL.

Taranaki Daily News, Volume XXXXV, Issue 249, 18 November 1903, Page 3

THE NEW BANKING BILL.

INTRODUCED BY THE PREMIER, j A COMPREHENSIVE MEASURE. On Tuesday the Right Hon. the Premier courteously telegraphed to us the full text of " The Bank of New Zealand Act, 1903," which we publish below : BANK OF NEW ZEALAND. A BILL INTITULED. 'AN ACT to make further provision respecting the Bank of New ■Zealand. WHEREAS under powers in that behalf conferred conferred by " The Bonk of New Zealand Share Government Act, 1894 " and '* The Bank of New Zealand Share Guarantee Act, 1894, Amendment Act, •1894," the Directors created and issued guaranteed chares or stock to the extent of two million pounds sterling, which will mature on the

19th day of July., one thousand nine hundred ami four, and whereas under the powers in that behalf conferred by the " Bank of New Zealand and Banking Act, 1895," the Assets Board created and issued certain debentures which will mature tn the 31st day of March, 1904, and •whereas the said shares'or itock and debentures will at maturity be redeemable at par at the London office of- the Bank, and w'heieas it is expedient that the remaining liabilities of the proprietors of the Bonk under section 21 of " The S 7 ew Zealand Bank Act, 1861," should iank as ordinary capital of the Bank, and whereas the preferred shares referred to in section 4, of "The Bank of New Zealand Act, 1895," were duly issued to Her Majesty the Queen and repurchased by the Bank as provided by sections 7 and 8 respectively of the last mentioned Act, and it is expedient that such shares and tl-e capital represented thereby should be cancelled, and that in lieu thereof fresh shares for the same' nominal Amount (to wit £500,000) should be Issued to His Majesty, fully paid up in exchange for the sum /if £500,000 now held by the Public Trustee, as th 6 repurchase price of the said preferred shares, and whereas it is expedient to make provision for the above-mentioned matter and to make certain other provisions in connection with the said Bank and the 'Assets Board : BE IT THEREFOR® EN A CUED by the General Assembly of New Zealand in Parliament assembled by the authority of the same as follows: l 7 The short title of this Act" is '' Hie Bank of New Zealand Act, 1903."

2. In this Act, if not inconsistent with the context "Assets Board " means the Assets Realisation Hoard constituted under " The Bank of New Zealand and Banking Act, 1895," " Bank" means the Bank of Xew Z<ealand, established under " The New Zealand Bank Act, 1861 " ; " Deed of Settlement " means the deed of settlement of the Bank, referred to in " The New Zealand Bank Act, 1861 " as such deed now stands altered and amended ; " Directors " means the Board of Directors of the Bank ; " Guaranteed Stock" means the " A " shares of the Bank issued and guaranteed under " The Bank of New Zealand Share Guarantee Act, 1894" and includes the stock issued under " Hie Bank of New Zealand Share Guarantee Act, 1894, Amendment Act 1894 " ; " Ordinary Shares " means all the now subsisting shares in the Bank other than the guaranteed stock and the preferred shares referred to in section 4of The. Bank of New Zealand and Banking Act, 1895." 3. (1.) Kvery ordinary share in the capital of the Bank shall be and be deemed to be a share of the nominal value of £6 13s 4d, paid up to the extent but no further of the amount actually paid oil account of the .instalments of the call directed to be made by section nine of " The Bank of New Zealand and Banking 'Act, 1895, in respect of such share, but with a liability to payment of the balance of the said instalments and to payment as and when the same may be called up of a further Bum of £3 6s (8d with no further liaibiHty either in tiie event of the winding up of the Bank or otherwise. (2) The dividends payable in respect of the ordinary Shares shall be computed on the amount of capital for the time being paid up thereon. 4. The liability of £3 6s 8d per share imposed by section 3 hereof is and shall be deemed to be the substitution for the liability to which the proprietor of such share is suUpect under section 10 of "The Bank of New Zealand and Banking Act, 1895 " or under the Bank Dues of Settlement or otherwise with respect to the hitherto remaining one-third of liability of £lO provided for by section 21 of " The New Zealand Bank Act, 1861."

5. The capital arising from the liajbility of £3 6s 8d per share re-

ferred to in section 4 hereof shall be and remain security for the deficiency referred to in section 26 of " The Bank of New Zealand and Banking Act, 1895 " and sub-sec-tion of the last-mentioned section is Jiero-jy modified accordingly. U. (1) While lialV-Lty on the i-nri

of the colony continues to subsist in respect of debentures issued by the Assets Board under the last ment-

ioned Act or this Act such capital shall not be called up by the Directors except by direction of the Colonial Treasurer (who shall, however, give the direction when so requested by them, and shall be called up as and when on the report of the As-

sets Board the Colonial Treasurer so reqiuests). (2). In the event of

default by the Directors ill complying with such requests the Assets Board shall, in the name of the Bank, on the request of the Colonial Treasurer make such call and enforce payment thereof direct tt) the Assets Board and for these purposes shall have awl may exercise all the powers and authorities of the Directors.

7. So long as the Assets Board is in existence all the proceedings of such call shall be paid by the Bank to that Board which shall hold the same in trust for redemption and payment of the debentures issued by the Board and then outstanding and subject thereto the same shall be held by the Bank for such redemption and thereafter the same shall be available for ordinary purposes of the Bank and every - ordinary share in the capital of the Bank 'aow hereafter forfeited and every share vested in the Bank by virtue of sect on 25 of " The Bank of New Zealand and Banking Act Amendment Act, 1898 " may be raised as ordinary shares by the Directors as and when they think fit, but shall be disposed of by public auction or public tender ilt the best

price obtainable, being in So case less than par and subject to such conditions as to the Bank's approval of the purchaser and otherwise as the Bank thinks fit to impose. 9i (1). On the 31st 'lay* of March, 1904 the preferred shares now held unissued by the Bank (l e-" ing all the preferred shares with the capital represented thereby) shall be and be deemed to be cancelled and in lieu thereof the Bank shall then issue to His Majesty as the absolute property of the colony seventy-five thousand fully paid up shares to be called " preference shares " and to I>e of the nominal amount of six pounds thirteen shillings and fourpence each thus representing a totul pakl up capital of £500,000. (2.) In payment of the capital represented by the preference shares the sum of #500,000 now held by the Public (being the purchase price of'

the preferred shares with the securities with which the same is invested) shall on the said 31st day of March, 1904, be deemed to be dis. charged from the trusts I'horetoi'ore affecting the same in lieu thereof the following provision shall then apply : (a) The Public Trustee shall forthwith transfer and deliver the said securities to the Bank ; (h) insofar as the capital produced from the sale of the said securities by the Bank is less than the full capital sum of £500,000 and the interest received by the Bank in respect of tlie said securities up to the date of the sale is less than tho apportioned part of the dividend payable to the Crown in respect of the preference shares up to that date the deficiency shall forthwith be paid by the Colonial Treasurer to the Bank out of the Consolidated Fund without further appropriation from this Act provided that in order to recoup to the Consolidated Fund all sums so paid to the Bank or to provide funds to enable each payment to be made the Colonial Treasurer may from time to time raise such sums of money as he thinks necessary by the creation issue and sale of debentures, scrip, or inscribed stock and for that purpose sections 2 to b of '' The Public Works and Land Settlement Act, 1903 " shall be deemed to be incorporated herewith but shall be read and constructed as applying to the moneys authorised to be raised under* this Act. (3) The capital represented by the preference shares shall be deemed to be paid up as on the said 31st day of March, 1904 and accruing income on the aforesaid securities shall be apportioned between the Crown and the Bank up to that date accordingly. 10. With -regard to the preference shares the following provision shall apply :—(a) They shall be issued as on the said 31st Bay of March, 1904, and the scrip certificates therefore shall oft that day be delivered to the Colonial-Treasurer who may .rom time to time" exercise in the name of His Majesty all his Majesty's right and powers as proprietor of the s-hares ; (b) they shall be subject to no liability whatever in the event of the winding-up of the Bank or otherwise and shall confirm voting power ; (e) in respect of capital they shall rank in priority to ordinary shares; (d) in reskect of dividends they shall rank in priority to ordinary shares to the extent ol £5 per cent, per annum non-cumulative (and subject to paragraphs (e) and (f) hereof) equally with ordinary shares for any excess above £5 per centum ; (e) in declaring dividends in excess of £5 per centum then with respect to excess (but to the excess only) the ordinary shares shall - be entitled to dividends at twice the rate of the dividends on the preference shares and the dividend on each class of shares shall be pa.valUle accordingly so that where for example the dividend on the ordinary shares is at the rate of six per centum the dividend on the preference shares shall be at the rate of 5-J per centum and so on : (f) the maximum rate of dividend payable in respect of preference shares shall not exceed £lO per centum per annum ; '.oi) dividends paid thereon shall he paid into public account and shall form part of the Oon.ioiidtjted Fund ; (h) subject as aforesaid they shall confer the same rights and privileges as ordinary shares.

11. The Bank shall redeem {guaranteed stock at the maturity thereof and in order to enable the same to be done the following provisions shall apply notwithstanding anything to contrary contained in the " New Zlealand Bank Act, 11861 " or in any other Act or in the deed oi' the Bank :—(a) The Bank is hereby empowered to create and issue further stock to the extent of one million pounds sterling having a currency not exc ecding ten years from the 19th day of July, 1904, and carrying a dividend at the rate not exceeding four pounds per cent, payable half-yearly ; (b) such stock may Ire issued in the form of or so as to be represented by stoek certificates or warrants to bearer of such amounts as the directors may determine with dividend coupons attached, and such stock shall be negotiable and transferable by delivery of certificates or warrants' representing same ; (c) such certificates or warrants shall he countersigned by the Controller-General and Aud-itor-General or by an audit officer appointed for that purpose by the Controller-General and Auditor-Gen-eral provided the fact that any pudit officers countersigns shall be conclusive evidence of his authority to do so ; (d) the holders of such certificates or warrants shall have the option of exchanging same for registered stock which shall be transferable in such amounts and subject to such regulations as the directors " may prescrijbe. There shall be no limit to the amount of such stock which any person may subscribe for or hold provided that the total faco value of all stock issu«d under this section shall not exceed one million pounds sterling. The holder of any such stock shull not as such holder be entitled to take part in or to vote in respect thereof at any meeting of proprietors of the Bank. The holder of any such stock or certificates or warrants shall not be concerned to see or inquire whether or to what extent powers conferred by this Act have teen previous)} exercised or are iiifmlcd to be exercised and all tii.'i-k or certificates or warrants rreated or issued under this Act or purporting so to be shall so far as concerns the holder and his security be deemed to have Ueen lawfully created and issued within the powers conferred by this Act for the purpose of guaranteeing the full and due payment oi the principal and dividents of such stock ; the fameshal 1 be a charge upon and in event of default in payment by the Bank shall be payable out ol' the Consolidated Fund of the colony of New Zealand without further appropriation than this Act. 12. All stock redeemed under the provisions of section 11 hereof sUo II be delivered by the Bank to the Colonial Treasurer for cancellation.

13. (1) All moneys paid out of the Consolidated Fund under the aforesaid guarantee shall be deemed to be moneys advanced by the Crown to the Bank ; (2) all the assets and 'real and personal property of the Bank shall be deemed to be and shall be security for repayment of all such advances together with the interest thereon at the rate of £4 per centum per annum.

14. If default is made by the Bank in payment to the Crown of any such advances or interest the Colonial Treasurer may at any time hereafter appoint a receiver who Khali thereupon have and exercise all the powers and author ties which might by exercised by a liquidator appointed by the Supreme Qtnirt under " The Companies Act. 1882 " without the necessity of applying to the said Court for such appointment or for such Powers, provided always that the proceeds of such liquidation sha.l be applied by such receiver first in the payment of moneys duo to the Crown in respect of liabilities or payments other than payments made under the afore, said guarantee, next in payment or satisfaction of claims of other creditors of the Bank and therefore in repayment of moneys paid by the Crown under the aloresaid guarantee with interest thereon as aforesaid. 15. (1) Section 11 of " The Bank of New Zealand and Banking Act, 1895" is hereby repealed, and in lieu thereof it is hereby provided that so long as the liability on the part of the colony continues to subsist in respect of debentures Issued by the Assets Board under '• The Bank of New Zealand Share Guarantee Act, 1894," "The Bank of New Zealand Banking Act, 1895," or

this Act the balance of net profits of the Bank for the year ending on 31st day of M&rcli, 1904, and for each subsequent year ending on 81st of March shall, after providing- for the amaunt of dividends payable in each year on the guaranteed stock and stock issued pursuant to section 11 hereof respectively be applied in the manner following, that is tcj say : in the flrit place, in paying a fixed cumulative sum of fifty thousand pounds, which shall be transferred and paid to the Assets Board if then in existence, or if not, then it shall be held by the Bank in trust for redemption of debentures of the Board ; in the next place, in paying to the proprietors of preference shares and ordinary shares a dividend at a rate not exceeding live pounds per centum per annum on amounts for time being paid up in respect of such shares, subject, however, in case of preference shares to provisions for priority contained in paragraph I> of section 10 hereof, and the residue, if any, such balance shall be paid and applied in the same manner as in the case of the above mentioned fifty thousand pounds. (2) Section 26 of " The Bank of New Zealand and Banking Act, 1895," is hereby modified, so as to accord with this section. 16. Clause 77 of 'the d L ed of settlement of the Bank is hereby amended by substituting December and June for February and August as'the respective months for holding the half-yearly and annual general meetings of shareholders of the Bank.

17. (!) From' and after the pausing of this Act the election of Chairmen of Directors shall be held (n the month of April in every year, and section 11 of " The Bank of New Zealand and Banking Act Amendment Act, 1898," is hereby amended accordingly. (2) The Chairman in office on the passing of this Act shall hold office until the first election of Chairman under this Act.

' 18. (1) From and after the passing of this Act, at every election of a member of the Board, of Directors bythe shareholders votes shall be given by voting- papers which the officer conducting the election shall forward to the shareholders by post, and shareholders shall return to him by post in sealed envelopes; (2) the directors, with the approval of the Governor-in-Council, may make such by-laws as they think fit foil the conduct of such elections, and all such by-laws shall continue in force until altered by shareholders in general or special meeting ; (3) section 14 of " The Bank of New Zealand and Banking Act Amendment Act, 1898," relating to voting- at meetings of shareholders, shall not apply to an election of members of the Board of Directors of the Bank, 19. All sums of monoy received by way of premium upon the sale of shares re-issued pursuant to section 8 hereof, and of stock issued pursuant to section 11 hereof shall, after payment of expenses of any sucli sale, be paid to the reserve fund of the Bank.

20. Not later than the first day of January, 1904, and again between the months of October and December, .1908, and also at such other times as the Hoard or the Colonial Treasurer thinks (it, the Chief Auditor shall cause the properties then vested in the Assets Board to be valued, and the annual 'deficiency be taken, such value and • amount of outstanding' debentures of the Assets Board with interest due or accruing due thereon to be ascertained.

21. If on making any such valuation and confirmation thereof by the Valuer-General it is found that the assets of Board are sufficient to meet outstanding liabilities of the Board, the Governor may by ()rdcr-in-Council declare that the Assets Boaid shall, from a date to be named, in order cease to exist shall" I 'n°n n i tlle , ' ollowi "'S provisions shall apply ; (a) all officers and members of the Assets Board appointed or reappointed after the finf' in h g n f this Act ' aild then in of! flee, shall cease to hold office, and tlm condition shall be deemed to be m of an y such appointment or reappointment ; (b) the i liabilities of ihe Board Than bv force of this Act, pass to v„ t in and devolve upon the Bank without any instrument of transfer, convev-<"-noe, or other assurance, arid with out payment of stamp duty (c a cerhficate in writing under the cal of the Bank and the hands of thrt members of the Bomvi r? 00 and- become vested in th Passed 'is 3 -S Deeds Registration Act 1868 " SLfi, 5 'T— 1 « " Vlo, y La,,d -Transfer Act 1880, and shall be exempt from stamp duty.

22 With respect to such of now existing' debentures of the Assets Board as are outstanding- at a maturity the following provisions nM* < ! PPIy j t ( „ a) The avail- , . * Statute ior redemption rM f !' I ,' pHed for that Purpose; ( 0 for the purpose oi redeeming the residue of outstanding debentures fresh debentures may be created and issued by the Assets Board for a Slim DOL exceeding in all the face ues ol such residue, having a cur'l " L, V noL exceeding five years, and tearing interest at a rate not exceeding three pounds ten shillings per centum, payable half-yearly • f c } such : iresh debentures shall be countersigned in tt manner speciiied in pai'agiai'u 0 of section 11, but in other respects shall be in such form as the As.sets Board thinks fit. 23. All debentures redeemed under •the provisions of the last precedingsection hcreol shall |, e delivered by the Assets Board to the Colonial treasurer for cancellation.

24._ The _ provisions of sub-section tr ol section 11 hereof, and except ill so lar as is otherwise especially provided by this Act, all provisions ot J lie liaiik of New Zealand and Banking Act, 1895," relating to debentures of the Assets Board created and issued thereunder (including charge on consolidated fund) shall mutatis mutandis extend and apply to debentures created and issued by the Board under the foregoing provisions of the Act.

-o. (1) l'"or the purpose of facilitation the redemption of debentures issued by the Assets Board and held by the Bunk the Assets Board shall at the request of the Bank transfer to the Bank any mortgage held by the Board as security for unpaid oalaiiws of purchase money of assets sold by the Board, or any contracts or securities held by the Board m respect of any such unpaid balances upon terms of the Bank denering up to the Board for cancellation debentures of the Board to the lull amount of such unpaid balances with accruing interest, and other moneys payable in respect lereol ; (2) all such transfers shall be exempt from stamp duty. 20. Beeds of settlement of tlw> Bunk ol Now Zealand Share Guarantee Act, 189-1," " Bank of New ' Bank of New Zealand and Banking Act Amendment Act, 1898," and every other Act or enactment which is in any way in conflict with this Act are hereby respectively modified i'n so far us such conflict exists, but not further or otherwise." R. J. SEDDOX.