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 institutions, and to ascertain how they could best be separated, and how the earning power of the bank could be increased.

The Estates Company had been formed five years previously to take over the bank’s “globo assets,” which consisted of real estate, trading concerns, and other properties that had fallen into the bank’s hands. Events showed that it would have been more prudent for the bank not to have formed the Estates Company, but to have called up the reserve liability of the shareholders, and in this way to provide the bank with the necessary working capital. The bank was practically the only shareholder in the company, and the separate existence of the company was purely a nominal matter, existing only in name. The shares of the company, appearing on the bank’s balance-sheets, gave rise to misleading impressions, and allowed dividends to be paid when the bank was actually going from bad to worse every year. In the years before 1890, owing to the fall in agricultural produce, wool, and frozen meat, the company’s properties steadily depreciated in value until they were no longer able to pay interest on the debentures that had been created. They therefore became a heavy burden on the bank, and in March, 1895, the combined balance-sheets of the Estates Company and of the Auckland Agricultural Company, in which the Estates Company held shares, showed a deficiency of no less than £1,764,383.

The investigations of the Parliamentary Committee showed that the bank, the Estates Company, and the Agricultural Company, although nominally three separate institutions, were one. The division was in name only; all the shares in the Estates Company were held by the bank, and the Estates Company held interest in the Agricultural Company.

The Committee had a difficult task in devising a way of separation. It had not only to separate the institutions, but it also had to safeguard the colony against losses, and, if possible, make it unnecessary for further applications to be made to Parliament. The Committee recommended that the whole of the freeholds, leaseholds, country runs or stations, stock and implements held in New Zealand by the three institutions should be sold to an Assets Realisation Board. It also recommended that £500,000 of the uncalled reserve liability of