SUSPENSION OF THE N.Z.L. AND M.A. CO.

Temuka Leader, Issue 2528, 13 July 1893, Page 4

SUSPENSION OF THE N.Z.L. AND M.A. CO.

London, July 10. Owing to the bank crisis in Australia, the New Zealand Loan and Mercantile Agency Company, Limited, has suspended payment, pending reconstruction. It has been known for a fortnight that the New Zealand Loan and Mercantile Company was embarrassed by the bank failures in Australia. The directors met daily, and were hopeful of surmounting their difficulties until yesterday, when they found that they would be unable to carry through certain arrangements with the Australian banks. The directors state that a scheme for reconstruction will shortly be devised. It would be foolish to wind up bo profitable a concern, especially as only £500,000 is needed to carry on. This amount will probably be obtained by a call or by issuing preferential shares. A large sum has been locked up in sheep-runs, though not much has been invested in that direction latterly. Owing to the bank crisis, facilities for financing were cut off, and the company wore unable to realise their securities. The company have also found it impossible to discount London acceptances on the suspended banks. The Standard says that the suspension comes as a shock to those who thought New Zealand would escape sco + . free. Auckland, July 11. Mr Bottley, general manager of the Loan and Mercantile Company, hos received the following information: — Suspension was absolutely due to the recent and still-existing banking crisis iu tho Australian colonies, and not to anything directly connected with the business of the company. The company have, in company with other financial institutions, all along held considerable deposits in Melbourne and Sydney, and as a matter of course they have recently been largely withdrawn. The su&pension of Goldaborough, Mort and Company, who carried on the same kind of business as the company, greatly aggravated matters. The company hold deposits in New Zealand, but there have been no withdrawals beyond merely the usual amounts. There is no difficulty in regard to debentures. They have not affected tho position at all, or only slightly. Nothing had occcurred in New Zealand in any way to contribute to the suspension. The business has been conducted on safe, prudent, and conservative lines. There will be as little interruption of business as possible. Tho formalities necessary to reconstruction will have to be gone through, but business will be resumed at an early date. Every effort will be made to avoid inconvenience to customers, and to maintain the very liberal business built up. The balance-sheets issued by the company in January last showed the company to be in a good position. That position has been maintained since, but suspension has been rendered necessary by the withdrawal of deposits, as above stated, consequent on the financial panic which has recently prevailed in Australia. Wellington, July 11. The Bank of New Zealand have requested the Press Association to state that the Bank will not make any loss by the suspension of the New Zealaud Loan and Mercrntile Agency Company, the advances to the company being not only much reduced, but amply covered by good realisable security. The banking account of the company in Australia and London has not been kept with the Bank of New Zealand.