BANK OF NEW ZEALAND.

Gisborne Times, Volume XXVII, Issue 2676, 4 December 1909, Page 7

BANK OF NEW ZEALAND.

HALF-YEARLY MEETING.

SATISFACTORY STATEMENT BY THE CHAIRMAN.

At the half-yearly meeting of the Bank of New Zealand yesterday, Mr. ll.' Beauchamp, Chairman of Directors, said:— S

Gentlemen, —At . our- half-yearly meetings, no statement of accounts, as you are aware, is presented. Our prin cijpal business is the election of a Director. and for that position Mr Martin Kennedy—who has occupied a scat on the Board continuously as your representative since 1894—again offers his services. There being no other candidate, I have much pleasure in declaring Mr Kennedy duly elected. When addressing you in June last, I mentioned that, consequent upon the conservative policy then being pursued by this and other Banks trading within the Dominion, you should be prepared for a diminution in our profits. Our accounts for the half-year ended 30th September show that those anticipations were realised. Still, the results for the period under review are gratifying, and I have no doubt that, at the close of the present financial year, we shall be able to transfer a substantial amount to our Reserve Fund,- and recommend the payment of a dividend and bonus equal to that you received for the year ended 31st March, 1909.

In 'the meantime, for the half-year ended 30tli *September, the Board has declared an interim dividend of 5 per cent, to the holders of Ordinary Shares, and a similar amount in respect to the Preference Shares issued to the Crown. This dividend will be payable at Head Office on Monday next. 6th inst., and at Branches on receipt of advice.

Taxation. —If the proposals now before Parliament regarding tho taxation of Banks become law, this institution will be called upon to contribute a much larger sum than it now does. Calculated upon the present volume of the Bank’s business, the increase will amount to not less than £?5,000 per annum. It may interest you to know that our taxation under all heads last year totalled £35,640. This, I may mention, included payments to Municipalities and Public Bodies as well as to the General Government.

With these preliminary remarks, I desire now to congratulate the Shareholders of the Bank, and the country generally, on the better and more promising monetary conditions that prevail to-day, and I do not think it would be improper on my part should I claim some credit for the Banking in_ .stitutions of New Zealand for the change that has taken place. A year ago. the Banks were criticised inside and outside of Parliament for not lending freely, notwithstanding that the aggregate of the advances and discounts, as at September 30th, 1908, exhibited a very substantial increase on the figures of the previous year. A good many people are under the impression'that, it is the duty of the Banks to advance against all and every kind of security. The sooner this impression is removed the better. That u no bankers of th# Dominion pursued •e right course during the past twelve or eighteen months is proved to some extent by the easier tendency that now prevails in the local money market. The Banks are . today in a much stronger position, and quite capable of furnishing all the legitimate banking accommodation that .may be required. The Bank returns for the past quarter show the strength, and we have but to compare the aggregate of the Fixed and Free Deposits and the Advances and Discounts with the figures for the corresponding qriarter last year to appreciate .the point. They are as follows: Fixed and Free Deposits. 1909. 1908. Bank. £ £ New Zealand 10,199,028 9,496,580 Union ••• 2,790,889 ' 2,786,534 New South Wales ... 3,009,416 3,057,706 Australasia ... 1,736,224 1,771,716 National ... 3,243,563 3,197,471 (Note: These figures do not include Government Deposits.) Advances and Discounts. New Zealand 7,091,411 8,480,888 Union ••• 3,160,610 3,3/1,232 New South Wales '... 2,505,193 3,211,533 Australasia ... 2,756,305 3,296,663 Rational ... 2,657,188 2,857,643 Last year the Banks helped their customers liberally, and to this is largely due the fact that the depression was mild and of short duration. The Outlook. —A distinct revival in trade appears to have set in all over the world hut particularly in the United States—of late years the storm centre of the financial world. Every mail received recently lias brought intelligence of renewed activity in one industry or another. The Steel trades are particularly busy, the demand for steel rails being especially strong. The railroad companies of America have large development works in hand and in prospect, involving an expenditure of many million dollars. The Union Pacific and Southern Pacific Railway systems have extensions aggregating approximately 2,000 miles in course of construction. ... The production of Pig Iron 111 the United States is now up to the highest level of recent years. The report of the German Steel Syndicates states that the orders on their books on September 10th amounted to about 550,000 tons more than at the corresponding period last year. . • . . In Great Britain there is a distinct improvement. Ship-building—the main industry of the United Kingdom—is, showing signs of recovery. According to Lloyds’ Register of Ship-building Returns, the tonnage under construction on 30th September was about 32,000 tons more than that which was in hand at the end of the June quarter, and about 45,000 tons more than was building twelve months ago. The European and American money markets are at the moment rather high (the Bank of England rate now standing at 5 per cent.) but this is not an unusual feature at this- timo of - the year. The Mother Country is unfortunately .disturbed by a pending poll - , tical crisis, for a .general, election is a • great drawbaok to trade. The favorable conditions now apparent in Europe and America are being reflected in New Zealand. The export and import returns prove conclusively that the. community has profited by the temporary depression. Traders and producers have been forced to face the position, and their efforts have resulted in the- equilibrium being restored. The exports show a substantial surplus over the imports, and, so far as we are concerned, that amounts to a favorable trade balance. Tills point .may be emphasised by figures. The values of the exports and imports for the year ended 30th September, 1909, com-

pared with the figures for the two previous years show as follows: ■ Exports. Imports. Year jj £ 1906/7 ... 19,891,846 16;071,887 1907/8 ... 16,370,587 1.7,750,868 1908/9 ... 18,700,156 14,916,005 (Note: These figures do not include Specie.) It will be seen from the figures I have quoted that ivhile in 1907/8 the imports exceeded the exports by £1,380,281, for the year just ended the exports .exceeded the imports by £3,784j151. We are in effect back to the position we were in in 1906/7,. which was the year of our extreme prosperity. • It is necessary for this country to show a substantial excess of exports over imports, because.we have to meet annually a very large interest liability in connection with public and private indebtedness. We have, it would seem, practically recovered the ground lost in 1907/8, and wo may now reasonably anticipate a further forward movement. There are ■ many factors that warrant this expectation, and it may be as well to make a brief reference to them.

Wool.—The prices obtained for the first of the new season’s clip sold in Wellington and in other parts of the Dominion, as well as at the sales held in the' chief centres of the Commonwealth, indicate very clearly that, at the moment, there is a strong demand lor this staple, as was anticipated by our London advices. Values realised at these sales were considerably in advance of those current a year ago, and latest London cables show that the market presents features of great strength. On 24th • November we received a cablegram from our London Office as follows: “The sales have opened with strong competition and large attendance of buyers. The market is good, owing largely to shortness of supplies. Prices are Jd to £d-per lb. higher.”

Whether this firmness will be carried into the New Year is problematical, for wool men arc likely to be guided by their well-known maxim: “When wool is dear it is dangerous: when it is very dear, it is very dangerous.” Values are extremely high just now, and only twice in the last nineteen years have they been quite as high. There may be a reaction, but in any case it is very probable that higher prices than last season will be obtained. New Zealand will produce a larger clip this year, and. with the higher range of values, quite two millions sterling should be added to the income of the producers.

Dairy Produce. —The exports of both butter and cheese show very substantial increases in quantity, and as values are practically up to the level of last year, we are justified in anticipating a fairly substantial increase in the income from this source. Roughly this increase should represent £250,000. Frozen Meat.—Mutton and lamb have recovered from the depression that affected them in July and August, and although the market is showing signs of weakening from pressure of supplies, the Dominion should, with an increased output, be able to maintain its income from this branch of industry. There is some hope that developments in the Chilled Beef trade, with the aid of the Linley process, will take place in the near future. The success of the shipment by the “Marathon” from Queensland is very encouraging. Hemp has improved materially, the c.i.f. quotations for January-March shipments being well in advance of those ruling a year ago. Hemp is, in point of fact, at level, and most of the mills can he operated to pay. An expansion in the output of this product is, I believe, one of the certainties of the season. Wheat and Oats and other gram and jiulso will again add materially to the volume of our exports; and, taking ail the factors into consideration, I am of opinion that when the produce yea! ends on September 30th, 1910, the amount of our exports will establish a record in jxiint of value. The prospects before us are decidedly good, and this Bank, with its ramifications and close connection with the producers, must necessarily benefit. I cannot, however, refrain from repeating a warning note: caution must continue to mark the policy of the -tradin" community, and the land speculators throughout the Dominion must endeavor to moderate their views on values. New Zealand has greatly increased her obligations in recent years, and while she is well able to faithfully meet all engagements, there is no reason why th people should bo handicapped in their work by ridiculously high land values. “Caution” should be the watchword of the people now and always.

FPkii Panes Association.! WELLINGTON, Dec. 3. At the Bank of New 'Zealand meeting, Mr Martin Kennedy took exception to the policy of not declaring the usual bonus of 2* per centum, leople, he said, thought tho -State should ha\ c a larger slice in the bank than it had got, and he considered it was'high time the shareholders entered a protest agiv inst an action of the- kind indicated. It the State must take more, let it carry a case before arbitration, and pay the full earning power of the shares. The Chairman emphasised the necessitv of building up the reserve rapidly. He expressed the opinion that higher bonuses should not be declared until the reserve had reached one million. He was hopeful that by pursuing that policy they would not only he able to pay off the one million debentures when they matured, but would extend the operations without increasing the capital, and thus have a larger earning power 011 a small capital. In proportion to capital the bank's trade was larger than that of any other bank in Australasia. He did not approve of going to Parliament for an increase of capital. The motion was adopted.