The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo. FRIDAY, JUNE 17, 1910. THE BANK OF NEW ZEALAND REPORT.

Auckland Star, Volume XLI, Issue 142, 17 June 1910, Page 4

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo.

FRIDAY, JUNE 17, 1910. THE BANK OF NEW ZEALAND REPORT.

Tor the cause that lacks assistance, For the toronff that needs- TCsiatanoA^ for the future in the distance, And the good that tse can da.

The speech of the Chairman of Directors at the annual meeting of the Bank of New Zealand has been for some years past very pleasant reading. The history of this institution since its reconstruction has been a remarkable reof success, and the results it has secured bear elocpient testimony, not only to the financial ability and business acumen of its management, but to the insight and wisdom of the Liberal statesmen vrho, against fierce opposition, forced the Bank of Ifew Zealand Bill through the House sixteen years ago, and saved the credit of the country and the Bank at the same time. The financial returns~"for

this past year, as the..report shows, are fully in keeping with, tne lopeftd prospects set forth by the Chairman at the last annual meeting: The balance-sheet, in Mr. Beauchamp'3 -worde, "carries on its face the evidence of a satisfactory financial position, and reflects in almost every detail the Bank's continued prosperity and.progress." The reserve fund has been strengthened by £150,000, and now, including undivided profits, stands at £864,000; deposits have increased by more than £2,000,000; advances and discounts have been reduced by over £900,000 —a fact which shows the general improvement ia the country's finances; the assets taken over from the ■defunct Realisation Board are now nearly extinguished; and the net profits for the year's transactions come to the substantial sum of nearly £200,000. It is true that the profits are less than last year's profits by some £60,000; but the difference is accounted for by the rcduc.'.ion iu advances and discounts and the incrcaso in deposits—evidences of the all-round strengthening ia our commercial finance, of which the fortunate holders of B-N-Z. shares are not at all likely to complain.

The figures we.have quoted are in themsclvcs sullicient to justify the Chairman's confidence in the bank's position and his satisfaction with its prospects. But we are accustomed in reading 1!t Beauchamp's annual speech on these occasions to look for something more than bank finance, and this year he has excelled himself iu compiling material of general public, interest. The statistics • that ilr Beauchamp Jus brought together provide en impressive proof of the rate at which our exports have increased during the past twelve months in quantity and value. The total increase for 1909-10 above the previoxis year is no lees than £4,700,000; and as Mr BeaucKamp reminds us, we need look no further than thia ior an explanation of the present pienitude of money for loan and investment and the disappearance of the financial stringency which we were all deploring twelve months ago. It is true that nearly two and a-half millions of the rise in our export values must be credited to the single item of Wool; but in all our staple products except Timber the rise in export values ha3 been maintained. In four years our Dairy exports have increased by over a million sterling, "and half of this amount was made up daring the past year. Even in the Frozen Meat fcrade, which was for some little; time List year in a rather precarious position, the low selling price secured wider sales, and really acted as an advertisement for our products. Values rose again toward the end of the year, and in. any case, a trade which can shoiv, according to Mr. Beauchamp'3 figures, an increase of something like £900,000 in five years, and is valued annually at considerably over three millions sterling, is on the whole in a reasonably prosperous condition. We must leave to our readers the profitable task of following out in detail the figures that Mr. Beauchamp has introduced' into his report, and the proofs they afford tEat the improved conditions of trade have reacted most powerfully and satisfactorily upon our commercial finance. The increase of over £2,000,000 in deposits in the Bank of New Zealand alone during the past year snould be, as the Chairman says, equally astonishing and gratifying to the whole community. But Mr. Beau-champ, though he is usually optimistic, and though his predictions of improvement in our financial condition have been fully justified, has a word of "warning to utter. The immense increase in the value of our products has had its natural effect iu enhancing the price of land, and the rapid' rise in the value of dairy land has already caused bankers and financiers some concern. We all remember only too well how the over-valuation of landed property twenty-five years ago paved the way for widespread financial disasters; and the Bank of New Zealand is not likely to make its old mistakes again. Mr. Beauchamp is fully justified in warning Us that a sudden fall in butter values would mean a heavy "slump" in the value of dairy land. In any case, it is cheap land that this country needs, if it is to b? settled and developed rapidly; and anything like an artificial or speculative "boom" in land values is to be strongly deprecated. Just now our financial prospects are good, and "fre can command, relatively speaking, an abundance of money at. fairly low rates. If we can only foster the sjpirit of enterprise that Ur. 3eau-

champ advocates, and maintain public confidence in our financial and commercial stability, we have nothing to fear for the future.. But, in our opinion, not the least valuable portion of Mr. Beauchamp's interesting report is the part in which he warns us vnaz we must not allow injudicious- legislative experiments to injure our credit with the outside world, nor suffer ourselves to be carried a/way by undue confidence in the remarkable productive and recuperative powers of this wonderful little country.