SHARES & MINING
Observer, Volume XXXVIII, Issue 41, 15 June 1918, Page 20
SHARES & MINING
THE balance sheet of the Bank of New Zealand for the year ended March 31st last, has been circulated. The net profit earned during the twelve months, after providing for bad and doubtful debts, for annual donations to the Provident Fund, and bonus for staff, and deducting interest on guaranteed stock, £21,199 10s lOd, and 50,--000, the amount allocated in reduction of bank premises and furniture, is £336,606 18s lid. To this has to be added balance brought forward from the preceding year £111,595 13s 4d, making available £448,202 12s 3d.
This balance it has been decided to distribute as follows:—Dividend of 10 percent, to "A" preference shares £50,000, dividend of 12 per cent, and bonus of 3 per cent, to "B" preference shares £37,500; dividend of 12 per cent, and bonus of 3 per cent, to ordinary shares £150,000, making the total distribution in dividends £237,500. Six per cent, was paid as an interim dividend on all classes of shares. The sum of £65,000 is added to the reserve fund bringing that fund up to £2,200,000 and leaving £145,702 12s M to be carried forward.
The Bank has had a remarkably line year and that can be said ot practically all the banks. It must ako be admitted that the management of the bank is prudent withoiit being too conservative, and is . playing its part in the war finance of the country to the very limit. The shareholders will meet in Wellington on the 21st instant, when we may expect to hear from the chairman (Mr Harold Beauchamp) the usual interesting review of the financial and commercial situation.
Mr Beauchamp has quite a number of matters that he can deal with, and he may be trusted to make the most om his opportunity. It will be very surprising, indeed, if he does not once more sound a note of warning as regards economy. The country's debt is piling up and will continue to grow, and with it will expand the interest bill. The pensions too, must necessarily increase and m peace times they will compel us to find fully £10,000,000 a year to nieet these two obligations alone. Ine two items will absorb the whole ot the land and income tax and the whole of the Customs revenue and more besides.
The directors of the Kauri Timber Company, Limited, will at the halfyearly meeting to be held in Melbourne on June 13, recommend the payment of an interim dividend at the rate of 5 per cent, per annum for the half-year ended Feb. 28.
The directors' report of the Colonial Mutual Life Assurance Society, Ltd., for 1917, shows that in the ordinary branch 8542 new policies assuring £1,937,242 were written, as against te 7773 policies for £1,520,361 in 1916. The annual income arising from the year's new business represents £82,437, or £17,456 in excess of the amount derivable from a similar source in the previous year. Claims by death accounted for 204,--266, and endowments for a further £107,894. The addition to the life assurance fund in this branch was £202,160, as against £171,525, awl the rate of interest yields £4 13s per cent, as compared with £4 12s 7d in 1916.
In the industrial branch 20,322 new policies assuring £622,575 were issued, as compared with 23,787 policies for £587,804 in 1916, whilst claims by deaths amounted to 12,--157, and in addition, £9165 was paid for endowments. From the industrial branch was handed over 69,--135 to the ordinary branch for investment in the funds of the latter, making a total of £172,752 bo invested. Premium income in the industrial branch was £131,766. Out of the profits made by the industrial section £17,600 hae been allotted for the reduction of organisation account which now stands at £70,000.
In the accident section policies issued numbered 858 and represented £82,700, besides pure accident and sickness policies for £131,300. The accumulated profit in this branch is £14,990. Funds invested in Government, municipal and other debentures amount to £1,998,941, the increase for the year being £480,518. Securities have been written down by £8112.
The actuarial investigation disclosed surplus funds over liabilities in the ordinary branch of £125,283, and the Board has decided to declare a bonus for the year at a rate ranging from £1 15s to 17s 6d per £100 assured for all participating assurance policies, and los per £100 for pure endowment policies. A sum of £73,241 will be at once utilised in providing reversionary bonus additions to all participating policies, £31,254 will be carried forward for future distribution among policies with deferred participation in surplus, and £20,788 will be carried forward unappropriated.
When the next New Zealand War Loan ie floated which will be about November naxt, there will be considerable surprises for a good many people. In the Finance Act of 1917 the compulsory investment clause only affected those with incomes of £700 and over and as ie well-known, this compulsory clause was put into operation when the loan for £9,500,000 was issued in March last. The subscriptions to that loan was a million short of the amount and those paying income tax on £700 incomes and over who had not subscribed to the issue were called upon to do so and many of these alleged financial shirkers overcame the difficulty by taking out the Special War Policies issued by the A.M.P. Society.
By the Finance Act passed during the short session held this year every one paying income tax or land tax must subscribe to the next loan, and the Minister of Finance is practically the judge of the amount that should be subscribed by each one. We cannot tolerate financial shirkers any more than we can tolerate military shirkers, but in this compulsory investment business some very real hardships arc going to be inflicted on many people, particularly the smaller payers of income tax. those with incomes of £325 to £425 will feel the pinch most severely. These incomes are mostly fixed incomes, and those receiving such salaries are already hard hit by the increased cost of goods and services, and very few if any of them can do much in the way of saving.
Fui-tliermore, people with these comparatively small incomes have many obligations, such for instance, as mortgages on their homes. Let us give a concrete case. A man has a mortgage of £500 falling due in four yeans or a little less. This man is saving all that it is possible for him to save, and may have £100 to £120 saved when the next loan is issued. This individual could eafely subscribe for £50, o,r £60 worth of bonds were the terms satisfactory. But War Certificates or bonds maturing in five years would be no good to a man so circumstanced, because ho would require his money at an earlier date to meet some part of his mortgage, and yet if such an one does not take up these five year securities, he can
be compelled to do so, and time be penalised for saving and economising and trying to keep a roof over his head.
The Treasury officials must consider the circumstances of such persons, and meet the situation. The State will need every penny that the people can lend, but the State should not seek to arbitrally take this money from the pockets of the people when by using a little commonsense and judgment it can get the money voluntarily. Supposing the Treasury offered bonds or War Certificates maturing in one, two, three or four years, and fixing the rate of interest at the rate allowed by the Post Office Savings Bank for deposits at call.
If this course is adopted ' a good deal of money would readily be made available to the State. The British Treasury has adopted this course and Treasury Bills are available to those who must have short-dated securities. There is, of course, a big difference between British Treasury, officials and New Zealand Treasury officials, for the latter have shown in the flotation in the three war loans that they possess no initiative and that they are securely tied up with red tape. We will have the next loan issued on the same, terms and conditions ac the last and the Treasury will be glad to use the big stick of compulsion.
The people of New Zealand know more about the loans floated in other countries than they know of the loans floated in the Dominion. In Australia the public know, and have known for some time the number of subscribers to each of the six loans floated, and the total subscribed to the ultimate £ in each case. We in New Zealand know nothing of our own loans. The beet we can get is that something like £36,000,000 has been subscribed in the Dominion, and with that we have to be contented. To give the people any accuirate and definite information is apparently regarded ac dangerous or else the people muet be regarded by the officials as a lot of children. The Treasury needs a shake up.