the bank itself, the duties of the president, auditor, and Colonial Treasurer will be greatly interfered with, and, indeed, I may add that in my humble opinion the Colonial Treasurer’s life would not be worth living. To insure himself against the possibilities of disaster in the guarding of the two millions, he would require to know almost every detail of the way in which the two concerns, the bank and the company, were operated upon, otherwise the possibility of a loss in either being transferred or even absorbed by the other would be easy, but would be exceedingly difficult to detect. No president or treasurer would feel safe in assenting to the investment of the funds guaranteed by the State.”
He drew up a scheme for an amalgamation of the banks and for the separation of the company, but the banks would not accept the proposals he made. In 1895, therefore, Mr. Seddon and his colleagues were called upon to introduce further banking legislation. The danger was past now and the crisis was over, and the Government’s critics gave themselves plenty of leisure to criticise the Government’s action. The debates were of a stirring nature, and led to much delay in getting other measures affecting the bank through Parliament. In that year, however, the whole of the proceeds of the call of £500,000 estimated at £450,000, together with the original paid-up capital, amounting to £900,000, was written off, the full extent of the bank’s position having been accurately gauged. Besides that, the Government rendered itself liable for another £500,000 in shares, and a similar sum was again called up from the reserve liability. An Assets Realisation Board was established to purchase all the assets of the Estates Company and the Auckland Agricultural Company for the sum of £2,731,706, which was the estimated value of the properties in 1895. Promises were made for paying the purchase money in debentures issued by the Assets Board, and any deficiency was guaranteed by the Government, which secured itself against loss on account of the guarantee, and if there was a deficiency the Colonial Treasurer was empowered to appoint a receiver, who would have the powers of a liquidator. The same Act, in accordance with the report of the Committee, gave the Bank of New Zealand power to purchase the property of the Colonial Bank. The Estates Company sold its properties, the Colonial Bank was purchased, and the Bank of New Zealand, recently saved from disaster, began an entirely new career, which has been favourable to itself, satisfactory to the shareholders, and creditable to the colony.
