BANK OF NEW ZEALAND.

Wanganui Chronicle, Volume L, Issue 12385, 4 December 1909, Page 2

BANK OF NEW ZEALAND.

HALF-YEARLY MEETING

WELLINGTON, December 3

The half-yearly meeting of the Bank of New Zealand was held this morning.

Mr. H. lieauchainp, Chairman ot | Directors, said : —■ j Gentlemen, —At our half-yearly meetings, no statement ot' accounts, as you arc aware, is presented. Our principal business is the election of a Director, and tor that position Mr. Martin Kennedy —■ who has occupied a seat on the Board continuously as your representative since 1894 — again offers his services. There being no other candidate, 1 have much pleasure in declaring Mr. Kennedy duly elected. When addressing you in June last, 1 mentioned that, consequent upon the conservative policy then being pursued by this and otlier 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 these anticipations were realised. Still, the- results for the period under review are gratifying, and f have no doubt that, at the close of the present financial year, we shall be ablo 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. hi tha meantime, for the half-year ended 30th 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 th«» Preference Shares issued to the Crown. This dividend will be payable at Head Office on Monday next, Cth inst., and at Branches on receipt of advice. TAXATION. —If the proposals now before Parliament regarding the 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 £15,000 per annum. It may interest you to know that our taxation under all heads last year totalled I £35,640. This, I may mention, included j 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 tho 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 fcr the Banking institutions of New Zealand for the change that has taken place. A year ago, the Banks wero 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 tho 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 the bankers of the Dominion pursued tho 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 to-day 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 tho aggregate of the Fixed and Free Deposits and the Advances and Discounts with the figures for the corresponding quarter last year to appreciate the point. They are as follows:—

18,170,707 21,217,959 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, but particularly in the United States—of late years the storm centre of the financial world. Every mail received recently has brought intelligence of I renewed activity in one industry or another. The Steel trades are particularly busy, the demand for steel rails being 1 especially strong. Tho Railroad Companies of America have large develop- ; uient works in hand and in prospect, in- , volving 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 in 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 Shipbuilding Returns/tho 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 time of the year. The Mother I Country is unfortunately disturbed by a ■ pending political crisis, for a General i Election is a great drawback to trade. I The favourable conditions now ap- ! parent in Europe and America are being reflected in New Zealand1,- The export and import returns prove concluI sively that tha community has profited jby the temporary depression. Traders j and producers have been forced to face I tho position, and their efforts have reI suited 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 favourable trade balance. This point may be emI phasised by figures. The values of tha I exports and imports for the year ended 30th September, 1909, compared with the figures for tho two previous years, show as follows: —

Exports. Imports. Year. £ * 1906-7 ... 19,891,846 16,071,887 1907-8" ... 16,370,587 17,750,868 1908-9 ... 18,700,156 14,916,005 (Note: These figures do not include Specie.) It will be seen from the figures I havo quoted that, while in 1907-8 tho

imports exceeded the exports by £1,330,----281, for the year just ended the exports exceeded the imports by £3,784,151. 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 wo have to meet annually a very largo 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 otlier parts of the Dominion, as well as at the sales held in the chief centres of the Commonwealth, indicato very clearly that, at the moment, there is a strong demand for this staple, as was anticipated by our London advices. Values realised at theso sales were considerably in advance of those current a year ago, and latestLondon 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 g_£>od, owing largely to shortness of supplies. Prices are id to per lb. higher." Whether this firmness will be carried into the New Y Tear is problematical, for wool men are likely to ba guided by their well-known maxim : "When wool is dear it is dangerous: when it is very dear ,it is very dangerous." Values are extrcmsly hiyii just now, and only twice in tho last nineteen years have they been quite as high. There may bo a reaction, but in any case it fs 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 ot 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 ths 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 tho aid of the Linloy process, will take place in the near future. The success of the shipment by the "Marathon" from Queensland is very encouraging.

HEMP has improved materinllv. 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 a remunerative level, and most of the mills can be operated to pay. An expansion in the output of this produce is, I believe, one of the certainties of the season.

WHEAT and OATS and other grain and pulse will again add materially...to tho volume of our exports; and, taking all the factors into consideration, I am of opinion that w-Jien the produce year ends on September 30th, 1910. the amount of our exports will establish a record in point 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 trading community, and the land speculators throughout the Dominion must endeavour 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 the p.?ople should be handicapped in their work by ridiculously high land values. "Caution" should be the watchword of the people now and always.

Mr Martin Kennedy took exception to the policy of not declaring the usual bonus of 2£ per cent. Some people, he said, thought the State should have a larger sliced of the bank than it had got, and he considered it was high time shareholders entered- a protest against anything of the kind indicated. If the State must take more, let it carry the caso before arbitration, and pay the full earning power of the shares. The chairman emphasised the necessity of building up the reserve rapidly, nnd expressed the opinion that higher bonuses should not be declared until the reserve reached one million pounds. He was hopeful that by pursuing that policy they would not only be able to pay off three, millions- when they matured, but extend operations without increasing tiie capital, and thus have a larger <arning power on a small capital. Tn y>ronortion to its capital the bank's trade vms larger than that of any ofchoi" bank in Australasia. He did not1, approve of going to Parliament for an increase of capital. The motion was adopted.

Fixed and Free Deposits. I 1909. 1908. ! Bank. £ £ - I New Zealand 10,199,028 9,496,530 Union ... 2,71)0,889 2,786,534 N ew South Wales ... 3,009,416 .^057,708 Australasia 1,730,224 1,771,716 National ... 3,243,563 3,197,471 | 20,979,120 20,310,00-7 (Note: These figures do not includo Government Deposits.) New Zealand 7,091,411 8,430,833 Union ... 3,100,610 3,371,232 New South Wales ... 2,505,193 3,211,533 Australasia ... 2,756,305 3,296,603 National ... 2,(357,188 2,857,643