DOMINION'S CREDIT.

Auckland Star, Volume LXIX, Issue 281, 28 November 1938, Page 4

DOMINION'S CREDIT.

EXODUS OF CAPITAL. i i BANK CHAIRMAN'S REVIEW. XKW SOUTH WALES PROFITS. A t ise of £4.393 in net profit to j £54".535. is shown in the accounts of the ' Bank of New South Wales for the year ■ • ended September 30. which were presented . a* the annual meeting of pioprietois in Sydney yesterday. The font th and final i i|ti li ter's dividend of 6 a share in Aus--1 ti.ilian currency has alreily been announced. Tlic di.-rtrihution makes the year's pavinent nnchaiiiteil at H per cent. This .ab-orbs £326.800, leaving t'ltiti.fiTT to be | eat tied forward, iisainst £143.042 bi ought i Dniing the year Mr. F. T. Tliritu: ;ii-!L r ned ftom liin fnwition as a director, i ll:s place was temporarily tilled by the ' Hon. Sir Frederick Tout, who wag avail- . ; able for re-election. ! Upward Trend of Profits. The bank's results for the past three i years compare as follows: — ! 1030. 1037. 1038. £ i: £ . ; Brr. forward . 110,!i!)6 120.500 145.042 . Net profit ... 470.454 543.242 547.835 500.430 072,712 603,777 : ; liivid,miKate p.c. pa. 5i « fi . i Amount . 400.050 520.800 520.500 , Car. forward . 120.500 145.042 106.077 ; .Mm etuenls in the balance-sheet items iiotiipare as follows; - i liabilities. I Variation. £ £ Vole eireillH tion 81,326 00 l'"l".siis 1 —4.381.005 Hills payable, etc 8.154.482 —107,004 Capital 5,780.000 Same I b'eseri e 0.1511.000 Same I P. ami 1,. Account 208,077 —21,033 , < (per contra; .. 3.341,074 —313.820 | ASSETS. . C ;ls 'i • -, 14.370.070 —2,270,152 ■ I-mills in I>onilon 715.000 —1 000 I I''usury bills . 1.155,000 —1 -17.". »»U0 In v-st Mients . 3.827.075 +0.»i;073 , I'lie by other banks 1.230.100 -(-130.325 : P.ills r.-c.-ivahle, etc 8.137,352 4-17' , '''4-' • Heserve I!. N.Z. dep. 382.015 -- S 704 , Adva liei-s 88,740.010 -i-B 10-> 533 i ''r-'iiises 3,150,000 • -f250;;,;.;, !■ u<tfifnr»rs ' liabilities ... 3.341.674 —315,820 I):seui*iiig the bank's results for the | year in moving the adoption of the 1.-port, 1 1 ah . 1.. U . (.illespie, president of tiie | ««i'l tlicy were coin mem orating the . 1 I.lst year Ot the existence of the bank • hi.l the first occasion in its history when toe total deposits at the annual balance ; nan exceeded £100.000,000, a record of u huh they could all tcel proud. Part 01 t tho inrreartfi in deposits during the year ; u ';i* ( ' to special movements in some •ol the bank h accounts, hut the , increase none the less eould be taken as i; i milieation of the growth of the . Dijsines.s (jt the bank. :| 1 'it'll liquid asuetn stoo.l at £31,449.000. I a figure some £4,187,000 less than last i year. .! Assistance to Customers. . I The movement in liquid assets had been . | brought about entirely by the assistance I tii.it tiie bank had been called upon to . j lender to it* ciintomers in helping them . I to meet the effects of tiie recent wide- ' spiead drought and the severe tails in the ( ! pri.es of their main CXJIOI ts. The leilmed ,1 nil lime of the exporting industries did not I j .itlcct. those industries alone, but spre.nl I its inlliiciice throughout the coiiitnunity. , , I ,te dire, toi s felt that it was the respoii- • «-1 i 11!:t\- ot the bank to u*e its resources ( to mitigate these movements as far as it had the power to do so. The expansion of over £8.000.000 in ; advances to £88.740.000 was the measure o: the assistance which they had been able to render to their customers to offset the effects of the extensive drought and the falls in the prices of ex]K>rts. Mr. (tillespie said there were everywhere indications of some recession from the high activity of the previous year. In Aus- . tralia lower prices for export products had brought a reduction in the national income. There were, however, features that led them to believe the setback would be neither as severe nor as prolonged as the i last depression of 1929-32. But there was, ; on the other hand, such a disturbed political situation both in Europe and the Far 4 East that any prediction would be futile. If they were to cling precariously to peace i they might expect a general reduction of ; activity in spite of the increase in arma- . ments expenditure. Discussing the outlook in New Zealand, 1 Mr. (Jillespie said the economic position ( had shown some deterioration, of which 1; tin* gradual weakening of the banking 1; position wan symptomatic. The banks had J pi oved willing and able to meet all rea- ': sonable credit requirements, but increasI ! ing stringency in the cash and oversea s 1 funds position might compel a more selective policy. J Capital Transfers from N.Z. I There could be little doubt that transfers of capital abroad as a result ot the -• unattraetivenesß of investment in the _ Dominion had been large and hail accentuI ated the decline in London funds. It was . unfortunately apparent that the Govern- • ment's internal policy, by inflating costs and prices and stimulating imports, was I obstructing the normal means of correct- ; ing a depletion of funds. '"But I must express severe condemna- , tion of any suggestion to improve the • position by a measure of exchange con- ' trol." said Mr. Gillespie. "Such a policy would do immense damage to the coun- - try's credit standing and lead to a pro- . gressive reduction in oversea trade, \ with increasing embarrassment to the ' economy." , Mr. Uillespie believed that tiie lower | | export income which seemed probable in < j the current year would make it difficult ; | for the New Zealand Government to carry ■ I out its heavy spending programme. He • criticised the Government's action in rais- ' ing the guaranteed prices of dairy produce 1 j when London prices had improved, as this { jeopardised the principle of the scheme ; of equalising returns to producers over years of high and low prices. It would be difficult to continue such ; a scheme indefinitely at the present high levels of the guaranteed prices. A deficit t was likely in the dairy industry account : nt the end of the financial year, and Mr. ' Gillespie contended that if, as it would 1 appear, recurring deficits -were inevitable, the scheme resolved itself into a subsidy i provided by credit expansion.