The Temuka Leader TUESDAY, OCTOBER 9, 1888. THE BANK OF NEW ZEALAND.

Temuka Leader, Issue 1800, 9 October 1888, Page 2

The Temuka Leader TUESDAY, OCTOBER 9, 1888. THE BANK OF NEW ZEALAND.

Thk report submitted by the special committee appointed some months ago to investigate the affairs of the Bank of New Zealand is a matter of greater import than many would bo inclined to think. It state* that tho losses made by the bank by bad debts amounted to nearly £1,000,000 $ that on money borrowed by a few of the directors themselves there baa been a loss of over £160,000; that the New Zealand Loan and Mercantile Agency Company was unduly favored by the officers of the bank; that Mr Murdoch, the general manager, misrepresented facts, or, in plain language, that he told the committee lies in his efforts to ship the responsibility for maladministration off bis own shoulders; and that the whole management was deserving of the gravest censure, if not of something more specific. This would imply that a prosecution of some kind or another is within the bounds of possibility ; so we may hear more of it. The report is the most crushing denunciation of the management that could well be produced in decent language; it pictures the circle which has hitherto held the bank’* destinies in their hands in very unfavorable light, and forces the reader to recall as almost a parallel case the famous Glasgow Bank. Half the loss has been sustained in Auckland, where certain people could alway* obtain advances to forward bogus (inflated) schemes, and the securities held there are now more or less unproductive. We had hopes that we might bo able to find an excuse for tho bad management in a mistaken desire to advance the interests of the colony, but the fact that tho principal part of the loss has been sustained in Auckland proves that the great desire of the managers of the bank has been to feather their own Best*. A great deal of the money has doubtless been sunk in the Piako Swamp and similar enterprises, and the poor unfortunate shareholders have to bear with the value of their shares shrinking from £25 10a to £7. We have so frequently written on the probability of this bank getting into difficulties that it may possibly be inferred that we rejoice in seeing our surmises verified by facts such as the report disclosed. We say at once that we do not rejoice, but, on the contrary, that we greatly regret it —and, what is more, we sincerely trust the bank will be able to pull through its difficulties. We have given up all hopes of a National Bank, and consequently we wish—as all sensible people must wish—the present banks to be prosperous. As regards the Bank of New Zealand’s present position, there is not the slightest fear of it, so long as the depositors retain confidence in its stability. No bank could stand a run, and no bank need suspend payment so long as its depositors have confidence in it. We are told that eminent English financiers have espoused the bank’s cause, and, if so # depositors will doubtless continue their patronage of it as hitherto. There is, therefore, nothing to fear from the present complications, and the customers of the bank are not likely to be inconvenienced ia the slightest degree. But we are afraid the disclosures made will have a very prejudicial effect on the colony as a whole. Already our 4 per cent, inscribed ■took has fallen from par to 96|— that is, £3 10s in every £lO0 —and English papers are calling out for similar investigation into the financial condition of all the financial companies transacting business in the colony. There cannot bo a doubt but that the disclosure with regard to the reckless, if not worse, management will have a bad effect on our credit at Home, for when it is seen that our chief financial institution is managed on such shady principles confidence will be shaken in everything relating to the colony. Mr Murdoch, who has been so severely censured in the report referred to, is at present the guiding light of the New Zealand Loan and Mercantile Agency Company, and some of the Directors who have so fearfully mismanaged affair* are now filling still higher positions. When it ia seen at Home that the chief monetary institution of the colony has been mismanaged in the way pointed out by the report, people will naturally hestitate before risking tbeir money where such thing* are done and more harm will be done in that way than can be easily estimated. We sympathise with the shareholders, whose shares have depreciated in value so enormously, but the large dividends received in the past will compensate most of them. Nothing will compensate the colony

for the bad effect the publication of th ereport will have unless the Bank decides on disposing of the lands which it holds, and thus promotes settlement. If it flhould do that we can easily forgive it all past transgressions, although without doubt it hai been the cauie of a good deal of this colony's misfortunes. It lent too freely; it lured people into ruinous epeculations, and then foreclosed on them without mercy. All this it did because it had command of the enormous sums Government borrowed, and had not sufficient capacity for utilising it legitimately. This has been the ruin of many, and consequently, a great impediment to progress, but let us hope that we shall not have a recurrence of such incapable management, and that henceforward the affairs of the Bank will be conducted on more businesslike principles. Above all, we hope that now when there is sufficient evidence of the people beingidesirous of settling on the land, and ready to give good prices for it, the Bank will offer for sale its large estates, and if it would only do so it would result in much good to the colony, and, ultimately to the Bank itstlf. ~juyjc.um,i«.'::;MaujMu 1 MTiamroKaxwCTr..--