BANK OF NEW ZEALAND.

Gisborne Times, Volume XXVI, Issue 2228, 27 June 1908, Page 1

BANK OF NEW ZEALAND.

ANNUAL MEETING

[l’iiKsa Association . ] WELLINGTON June 20. The annual meeting of tho shareholders of tho Bnn'k of Now Zealand was held this afternoon, about thirty being present. . ■ Mr. 11. Beauchamp (chairman),, in moving the adoption of tho report and balance-sheet, said that tho assets taken over from the Assets Bealisation Board in 1900, viz.,_ £823,457, hail boon reduced by tho 15th inst. to £437,780. Tho Chairman referred;to the marked fall in tho value of some of our > staple products, due to financial stringency in Now York ro-aetihg on London, Paris, and Berlin. Wool, ho said, 'had suffered severely, but tho May sales wore encouraging, and gave hope of early revival. Tho dividends recommended are 2) per cent on preferred shares, making 7) per cent for the year, and 5 per cent on ordinary shares, making 10 per cent for the year. Mr. W. Watson seconded tho motion; " "1- ■- " , Mr. Kebbell thought they should pay a little more attention to small depositors. Tho Government had raised the interest on Post Office Savings Bank deposits by $ per cent, and had tho bank raised its rate te 3) per cent.it would havo had a fair share of these deposits. Mr. Martin Kennedy said tho dividend provided in tho balance-sheet represented only 28 per cent of tho profits, as against 60 to 70 per cent paid by other banks. If 15 per cont. dividend was payablo on tho present faco value of shares, it would only give 5 per cent on their actual cost. He hoped tho time was not far distant when shareholders would havo a more equitablo representation on tho Board. When tho present basis of representation was fixed it was reasonable, for then tho Government guarantee amounted to about £5,000,000, whereas to-day it was reduced to £1,000,000. A motion to increase the remuneration to tho directors was withdrawn, it being explained that tho directors did not desire higlior remuneration. Tho report was unanimously adopted, and votes of thanks were passed to tho chairman, tho directors, the manager, and the staff.

tSe CHAIRMAN’S SPEECH. A COMPREHENSIVE - ADDRESS,

[Feom Ocn Special Cobhespondent:]

Speaking at the annual meeting yesterday, the Chairman (Mr. H. Beauchamp), in moving the adoption of the report and balance-sheet, said:

I havo much pleasure 111 again placing before shareholders so satisfactory a report and balance-sheet as that recently distributed among you. Following our usual custom I pro* pose, in tho first place, to refer briefly to the items in the balance-sheet in which there is any considerable variation. A- comparison of the figures with those of year ago gives the following results ; Capital.—There 1b no alteration in the capital of the Bauk, which still stands at £2,000,000. ' , t The Reserve Fund.*-Tho amount at credit of ‘this fund, after crediting the sum allocated from last year’s profits, was £250,000; and in- pure suance of -the policy indicated at the TastrianiUf-al/ineetiug, the directors 'liiivO again- allocated a considerable amount from the profits of the year towards this important fund. The amount proposed to be transferred out of the profits at 31st March last is £200,000, bringing the reserve fund up to £450,000. With, the balance) proposed to be carried forward after payment of dividend and other appropriations, the reserve fund and undivided profits will amount to £504,097. Notes in circulation are less by £52,'563, bub still stand at the satisfactory sum of £912,627. | Deposits.—There has been a gradual expansion in the doposit business of the Bank during the year, although the increase is not so marked, as that recorded for the corresponding period-. Current accounts and fixed deposits togother show an increase of, over £400,000 for the year, while oil the other hand New Zealand Govern-; mont credit balances are considerably less than at March, 1907, causing a net decrease of £137,747 to be shown in the aggregate. Fixed deposit rates were during the. latter part of tho year raised one-half per cent., which will probably have: the effect of still further augmenting the deposits of the Bank. Bills payable -and other liabilities show a decrease of £350/138, mainly in Bills Payable, duo to fluctuations in Government operations. Turning to the Assets side:— Coin, bullion, money at short call,, etc., show a considerable movement' on last year’s figures. We have in-, creased our holding of coin by £285,- : 388, and the item coin and cash balances now stands at £2,445,993. Bullion is less by £29,688. Money at short call, Government and other -securities in London, are together less by £J ,684,682. 'For the last few years we have had more than the normal amount of our surplus funds 1 invested in short loans and other liquid securities in London. During last year, however, the demand for money in New Zealand was active, and we were»uble to increase our advances -here at rates distinctly better than those obtainable in London. The policy of tile ißank hi keeping.large funds in London has frequently been questioned, but your directors hold that it is most desirable to maintain a position of strong finance in that city. to meet the exigencies of tile large and increasing business of the Bank. As has been frequently pointed out in the past, our -surplus funds can he profitably utilised; in London, and by reason .of the liquid nature of their investment, they are readily available for use in the Dominion when required. Investments in. the Colonies are greater hv £95,455, and now stand at £1,123,295. Advances.—After making allowance for adjustment of -bills purchased in transit, discounted bills show a slight reduction on last year’s figures, whilst advances show an increase of over £1,920,000, making llic total under tlie heading of Current Account Advances and" Other Debts due to the Bank, £8,350,019, as appearing in the balance-sheet. Since the beginning of the year a certain amount of stringency has been experienced in tho local money market -and rates lor advances have hardened considerably. There is still ail active demand for money within the Do-

minion, aud.tho position is accentuated by tho recent full in the prioo of wool and flax, causing farmers and others :engaged > n commercial pursuite to lean more heavily reh banks and commercial institutions. The Bank in tlio circumstances is pursuing a conservative policy in tho matter of advances at tho present time, tho aim of the directors being to meet the-le-gitimate requirements of our own customers. With regard to our advances, 'I can but repent the assurances given to you on former occasions that - the greatest care is bestowed upon this important branch of the business by your directors ami the executive officers of the Bank.' Assets Realisation- Board Assets.— The policy indicated in my address to you in Juno, 1907, viz., to quit tlio dependencies taken over from tho Assets Realisation BoaiVl at best prices obtainable with the least possible delay, has been vigorously carried out during tho past year. At 31st March last these assets stood in the books of the Bank at £471,235, a doeroaso of £280,904 on the figures at 31st March, 1907. wf . A reduction of £394,077 has therefore been effected since theso assets were taken over in 1900, and I think you will agree with mo that this 'result may bo regarded as highly sati:*-' factory. AVo are continuing bur efforts to realise tho remaining properties still in our hands and will take advantage of any reasonable opportunities of disposing of them. Colonial Bank property and premises do not on this occasion appear in the balance-sheet. The ftein in our hooks having been reduced during tho year by the disposal of some of the properties, to a few hundred pounds, it is thought unnecessary to give it any longer a. separate line in tho balance-sheet, and the small ba-lance-remaining has therefore been merged with the-other property and premises of the Bank. Profit and Loss.—After making all necessary appropriations, the balance of net profit for the year -amounts to £309,922, as against £294,i880 last year. To this lias,to bo added mo balance brought forward, from last year, £31,675, making total available for distribution, £341,597 —a result chat must bo‘regarded as extremely gratifying. An interim dividend of-5’ per'cent, has already been paid -to holders of ordinary shares and in- respect of the preference shares issued to the Crown. The directors now proposo to pay a further dividend of 5 per cont. on the ordinary shares ami of -2} per cent, on tlio preference share capital. Tho -total distribution by way of dividend is thus £87,500. (if the balance, remaining it is proposed to transfer £200,000 to the reserve fund and to carry forward a balanco of £54,097. Our Pension Fund now, I am gratified to state, compares very favorably with that of- any other Bank transacting business in this Dominion, and I confidently anticipate that'’it will be tho means of not only attracting, to our ranks well educated ambitious 1 youths who have decided to adopt i banking as a profession, but of enabling us to retain tho services of many capable, experienced officers who in other circumstances might be induced to accept appointments offering greater present attractions. General Remarks. —Since I met you this time last year, there lias, unfortunately, occurred a very great change in the economic and commercial conditions of the world. The financial crisis that convulsed tho United States in October-Decembor 1-aet liad far-reaching effects, which we in -New Zealand are feeling to a certain extent. There has been a marked fall in tlio values of tho majority of our staple products, notably wool, tallow, hemp, kail'll gum, and frozen meat (with the exception of lamb), duo to the financial stringency Neiv’York reacting on 'London, -Paris aridVißorlin, and causing money in these centres to advance to prohibitive and trade-paralysing rates. The appreciable lessening of industrial activity in the United Kingdom—-which was a direct result of the financial panic—affected the values of our products. Wool has suffered severely, but the tone of the May sales was encouraging and gives hopes of an early revival. To turn to a brighter side of the picture, it is satisfactory to note tho splendid prices, obtained for butter and cheese during the past season, In the matter of price, butter established a record, several consignments realising from 140 s to 1525. per cwt. in Tooley Street. These prices equalled, if they did not exceed, those made for tho best Danish, which, heretofore,, occupied “’pride of place.” It is interesting to observe how the exports of dairy products continue to expand.

n 1897-8 we exported but- ■ ter and eliceso valued at 583,862 n 1902-3 we exported butter and cheese valued tat 1,450,303 n 1907-8 we exported butter and cljeese valued at 2,130,711

The exports of 1907-8 exhibit the enormous - and highly satisfactory increase of 205 per cent, as compared with 1897-8. The returns for the past season would hi've been greater had it, not been for the inordinately long spell of dry weather wo- experienced last spring and summer, which naturally caused an appreciable shrinkage in milk supplies. This unfavorable weather is also responsible for a .rather lighted harvest than usual; but whilst the volume is less, the quality is excellent, and there is -at the moment ail- -active demand-for all descriptions of grain and other agricultural products at exceedingly profitable rates.

On balance, however, the fall in- the values of our principal staples exported shows a shrinkage'which- is most marked. The total values of our experts, exclusive of specie, lor each of the past live veins ending 31st March compare as under :

1901 £15,301.209 1905 £15,520,903 1906 £16.247.212 1907 ... ... £19,434,058 1908 ... ... £17,803,842 Thus, after a series of increases, there has come a check, the decrease of 1908 as compared with the previous year amounting to £1,570,816. ; The declension will be more clearly emphasised when tho true trading year—that is, 30th September—is completed. The lower prices of produce naturally affect land values, for, after all. land is only worth according to what it will yield, and must fluctuate with tho rise and fall of the primary products. Building land, has, no doubt, been raised to fictitious vdues, and a sliarp drop ill that description will not bo altogether an evil. For farming land there continues to be an excellent demand. ..but it is not unlikely that'values of rural lands will recede somewhat in the near future owing to the full in

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