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The Cyclopedia of New Zealand [Wellington Provincial District]

National Bank of New Zealand, Limited

National Bank of New Zealand, Limited. Head office in New Zealand, Grey Street, Wellington. The history of this Bank commences some twenty-three years ago, the original prospectus being dated in London, 15th of August, 1872. The Board of Directors was a very strong one, numbering ten gentlemen all well known in the City of London, three of whom had previously occupied high positions in the Colony:—Their names were as follows:—Chairman, Mr. Charles Magniac, M.P., of Messrs. Matheson and Co., 3 Lombard Street, E.C.; deputy-chairman, Mr. Dudley Robert Smith, of Messrs. Samuel Smith, Bros. and Co., Bankers, Hull; Colonel Sir Thomas Gore Brown, K.C.M.G., formerly Governor of New Zealand; Sir Charles Clifford, formerly Speaker of the House of Representatives of New Zealand; Mr. Alexander Grant Dallas, late Governor of Rupert's Land, and late Director of the Hudson Bay Company; Dr. I. E. Featherston, late of New Zealand; Messrs. William Smellie Grahame, late of Auckland, N.Z.; Edward Brodie Hoare, of Messrs. Barnett, Hoare, Hanbury and Lloyd, 62 Lombard Street, E.C., bankers; John Morrison, late Colonial Agent for the Government of New Zealand; William Whitbread, of Messrs. Whitbread and Co., Chiswell Street, E.C. The object of the Institution, as set forth in the prospectus, was to extend to the Colony the additional banking accommodation which the rapid increase of population and the remarkable development of its mineral, pastoral and agricultural resources at that time urgently demanded. The capital was fixed at £2,000,000 in 200,000 shares of £10 each and the first issue was 100,000 of £10 each. Applications were received for 110,872 shares, but as the total issue was only 100,000 of which 33,000 were reserved for New Zealand, the directors were unable to allot more than 66,667 shares in London to 850 shareholders, representing a subscribed capital of £666,670. This was a very auspicious beginning for the Bank, which, as will be seen, has since given a good account of itself. At the time the new Bank started there were five banks doing business in the Colony, viz.—Bank of New Zealand, Bank of Otago (both local institutions), Union Bank of Australia, Bank of New South Wales, and Bank of Australasia. They showed the following aggregate of business:—Note circulation, £588,000; deposits, £3,570,000; bills discounted and other debts due, £4,190,000. The Bank of Otago was absorbed by the new National Bank in 1873, leaving Banking Companies at their old number—five—but to these was added, in 1874, another local institution, the Colonial Bank of New Zealand. The business of the Colony was thereafter administered by six banks until December, 1895, when the Bank of New Zealand absorbed the Colonial, leaving the number as at present—five. The vast increase in the volume of business betwixt then and now will be seen on reference to the Government returns of the 30th of September, 1895, viz.—Note circulation, £867,000; deposits, £10,743,000; bills discounted and other debts due, £11,660,000. The population in 1872 (exclusive of Maoris) was 260,000. It is now 679,000, showing the large increase of 419,000 in a little over twenty years. The first inspector and general manager of the National Bank in New Zealand was the late Mr. Adam Burns, who arrived in the Colony in February, 1873, and at once made arrangements for commencing business. The head quarters of the Bank in the Colony being established in Wellington, branches were opened in that City, and also at Auckland and Christchurch, in addition to the branches (including Dunedin) which were taken over from the Bank of Otago. In 1881 the head office was transferred from Wellington to Dunedin on the appointment as inspector of Mr. William Dymock, who, later on, became general manager; and it was re-transferred to Wellington again in 1894 by the present general manager, Mr. James H. B. Coates, when he took up the duties of his office. At the first ordinary general meeting of the Bank, held in London in July, 1873, the balance carried forward to profit and loss account up to March of the same year amounted to £1102. In September, 1874, the second general meeting was held, and accounts were presented up to the 31st of March of that year, the balance sheet amounting to £1,350,000 (on each side), and the balance of profit carried forward was £1565. This was after paying the heavy expenses involved in taking over the business of the Bank of Otago. A year later the figures in the balance sheet had increased to £2,233,000, and the Bank declared its first dividend, which amounted to £20,000, being at the rate of six per cent, per annum, and carried forward a surplus of £6866. The Bank continued to pay dividends at the same rate up to the year 1884, excepting the years 1881, 1882 and 1883, when the dividends for the half years from September to March respectively, were at the rate of 8 per cent. From the year 1875 up to the present time, the Bank has paid dividends regularly, except for one half year ending the 31st of March, 1891, when capital was written off for the second time, as will be mentioned. In the year 1885 the Bank reduced its capital from £350,000 to £250,000 by transferring £100,000 to a contingent account to provide for bad and doubtful debts, and in the year 1891 it was decided to write off a further sum of £150,000, and to make a call on its shareholders for a similar amount, thus allowing the paid-up capital to still remain at its reduced amount, viz., £250,000. These operations in reduction of capital were unpleasant experiences for shareholders, but have been an excellent thing for the stability of the Bank, and the Board and management of the Bank are to be congratulated on having had the courage to face the position. It is far better to acknowledge the truth and its consequences than to go floundering on, and it would have been well for New Zealand if the Directors of other Colonial Institutions had shown the same moral courage and foresight that the National Bank Board have always done. To account for the losses which this Bank (in common with all banks in the Australasian page 514
New Zealand Head Office, Grey Street, Wellington.

New Zealand Head Office, Grey Street, Wellington.

colonies during the same period) has suffered, one has to go back to the severe shock which the Colony sustained consequent on the failure of the City of Glasgow Bank, and other financial disasters in Great Britain about the years 1878–9. This was the beginning of an almost continuous fall in values that has unpleasantly forced home upon the community the great difference between economic conditions in a new country as compared with an old. The National Bank has always been a purely New Zealand banking institution, and has encouraged and assisted the small traders and farmers rather than the large merchants and squatters: and there must be a melancholy satisfaction to the proprietors in the reflection that a large proportion of its losses went in wages and other expenditure in connection with the establishment on too large a scale—as it proved—of industrial undertakings at Dunedin and other places in the Colony that were employers of labour. Notwithstanding however, these troubles, the Bank has held its own and prospered well. Its general policy has been laid down with shrewdness and foresight by the London Board of Directors, and administered with loyalty and ability by the colonial staff. At the present time the Bank is carrying on a large and profitable business, and is in the highest favour all over the Colony. The most recent Government return, September, 1895, shows its position as follows:—Note circulation, £104,000; deposits, £1,273,000; bills discounted and other debts due, £1,392,000. Throughout the history of the Bank it has been intimately connected with colonial enterprise. It is well known that it is the success attending the operations of certain of the Bank's gold-mining clients, notably, the now famous “Waihi Gold Mining Company.” (which was nursed from its initiation by the Bank) in the Upper Thames, that is at the bottom of the remarkable impetus which the goldfields industry has recently received in the Auckland and Reefton districts. The dairying industry has also been nursed by the Bank from the beginning, in the Canterbury, Otago, Southland and New Plymouth districts, and its present connection with this standby of the small farmer is very great. The encouragement of the kauri gum: industry, which employs many thousands of men, has always been the special feature of the Auckland Branch of the Bank. For some time past the business of the Bank has shown gradual and steady expansion, and the shares have correspondingly risen in value. The total amount paid in dividends to the 31st of March, 1895, is £359,000. Capital written off to same date, £250,000. Head office, 15 Moorgate Street, London, E.C. Directors:—Messrs. James Macandrew (chairman), Edmund Charles Morgan, James Rattray (Dunedin, N.Z.), Thomas Seaber, William Johnstone Steele, John Morrison Stobart, secretary, Mr. Richard Maxwell, accountant, page 515 Mr. Francis Shepherd. The head office in the Colony is at No. 10 Grey Street, Wellington; general manager, Mr. J. H. B. Coates inspector, Mr. J. G. Stott; accountant, Mr. James Stephens. There are twenty-five branches, viz., Auckland, D. W. Duthie, manager; Balclutha, Allan Bishop, manager; Blenheim, G. W. McIntosh, manager; Christchurch, Alex. Feiguson, manager; Dargaville, C. H. Gould, manager; Dunedin, J. Sinclair Thomson, manager; Greymouth, C. F. A. Broad, manager; Invercargill, Frank Woodward, manager; Milton, J. W. Petrie, manager; Mosgiel, J. H. Inglis, agent; Napier, J. McLean, manager; Nelson, Cecil King, manager; New Plymouth, A. E. A. Clarke, manager; North Dunedin, J. N. Brown, manager; Oamaru, W. C. McDouall, manager; Outram, W. R. R. Churton, manager; Port Chalmers, William Hunter, manager; Paeroa, J. R. McNaughton, pro-manager; Reefton, Isaac Lewis, manager; Riverton, V. R. Hackworth, manager; Tapanui, J. G. Wolferstan, manager; Timaru, A. F. Hamilton, manager; Waikaia, Thomas Taylor, manager; Wanganui, J. F. Cutfield, manager; Wellington, G.F. Gee, manager, and ten agencies, viz., Newton, Robert Baxter, agent; Onehunga, F. T. W. Cotterell, agent; Kaitangata; Hokitika, J. D. Lynch, agent; Stratford, W. M. Bayly, agent; Kurow, T. J. W. Ferens, agent; Lyell, A. J. Campbell, agent; Orepuki; Thornbury; Te Aro, John Knox, agent. The following is the latest balance-sheet and profit and loss account made up to the 30th of March, 1895:—
Debtor.
To capital paid up— £ s. d.
£210s. per share on 100,000 shares £250,000 0 0
Less calls unpaid 893 7 8
249,106 12 9
,, Notes in Circulation 109,822 0 0
,, Liabilities on Deposit and Current Accounts 1,534,641 1 2
,, Bills payable and other Liabilities (including the provision for bad and doubtful debts) 265,175 15 1
,, Profit and Loss Account—
Profit for the year, including balance brought forward £31,606 12 4
Less Interim Div. for half-year ending 30th Sept., 1894 6,250 0 0
25,356 12 4
Total £2,184,102 1 4
Creditor.
£ s. d.
By Coin and Bullion at Head Office and Branches, and cash at Bankers 358,024 10 11
,, Bills discounted, Loans, Current Accounts, Advances on Securities, etc., 1,699,835 16 7
,, Landed Property, Premises, Furniture, etc., 126,241 13 10
£2,184,102 1 4
Profit and loss account.
£ s. d.
To Charges, including Rent, Taxes, Salaries, and expenses at Head Office and 34 Branches and Agencies 42,039 6 4
,, Rebate on Bills discounted, and not due at 30th of March, 1895 2,426 18 4
,, Interim Dividend for half-year ending 30th of September, 1894 6,250 0 0
, Balance carried down 25,356 12 4
£76,072 17 0
By Balance 1st of April, 1894 15,175 8 5
,, Gross Profit after deducting interest on Deposits, and provision for bad and doubtful debts 60,897 8 7
£76,072 17 0
By Balance brought down £25,356 12 4