Bank of New Zealand.

Bruce Herald, Volume VIII, Issue 701, 18 May 1875, Page 6

Bank of New Zealand.

The half-yearly general meeting of the proprietors of the Bank of New Zealand was held on Thursday, April 29, at the banking house, Queen-street, at noon. There were about twenty-five shareholders present. The Hon. James Williamson, M.L.C., chairman of directors, presided. D. L. Murdoch, Esq., the Inspector, read the advertisement convening the meeting, and also the minutes <«f the last half-yearly meeting, which were confirmed. KEPORT AND BALANCE-SHEET. The following report and balance-sheet were then read : — Twenty-seventh report of the Directors of the Bank of New Zealand, to the half-yearly general meeting 1 of the proprietors, held at the Banking-house, Auckland, on Thursday, April 20, 1875. The Directors are enabled again to meet Shareholders with a report and balance-sheet which cannot fail to be satisfactory. The net profit at 31st March, after making vory full allowance for all bad and doubtful dependencies, and towards reduction of Bank premises and furniture accounts, amounts to £48,05S 410 To which has to be added balance of undivided profit at 30th September 1874. £13,010 0 3 The following appropriation of which is now recommended : To payment of dividend at the rate of 10 per cent, per annum . . £30,000 0 0 To bonus of o.s per share equal to 5 per cent, per annum .. .. £15,000 0 0 To balance carried to profit and loss account £16,074 11 1 - £01,974 11 1 The dividend and bonus will be payable at the Head Office, Auckland, to-morrow (Friday), the 30th April, and at the Branches on receipt of advice.— For the Board of Directors, James Williamson, Chairman. Aggregate Balance Shoot of the Bank of New Zealand, at 31at March, 1575, including London Office to 31st December, 1574.

Mr Murdoch desired, with the permission of the Chairman, io call the attention of the shareholders to a slight alteration that had been made in the arrangement of the different items in the balance-sheet. In previous statements of account they had separated landed property from Bank premises and furniture — why he could not say. Tfye plan was adopted at first, and b,ad always been continued ; but it merely had the effect of enlarging the balancersheet without any good reason. This year the item.s had be§n put together:. The landed property, yfhioh hitbertq had been, a separate item, was simply *be land on which the Bank premises stood, and therefore there was no necessity for its being kept separate, Then, wjch reference to ti»e n «** *^° i*«TO*; *' bjllp

ceivable and securities in London," and " bills discounted and other debts due to the Bank," — hitherto these had been included under one heading, namely, ''bills receivable, bills discounted, and other debts due to the Bank." But for various reasonß— among others the adverse comments which hid appeared in a portion of the Press during the paat half year — it had been thought desirable to show as against bills payable in circulation, which they would see on the other side of the account amounted to £1,450,368- Os 6d, that there were held bills receivable and securities in London £1,477,029 8s 6d . The latter item therefore, had been deducted from the general item of " bills receivable, bills discounted, and other debts due to the Bank," and had been placed as a separate item in the balancesheet. The Directors felt that was a better division of the headings, and he hoped the shareholders would agree with them. The Chairman said — In moving the adoption of the report and balance-sheet which have just been read it devolves on me to make a few remarks on matters connected with the business of the past half-year. I need not comment on the report, which I am sure will commend itself to shareholders generally, and will only notice that one gratifying feature in it is that, notwithstanding the initiation of a policy by other Bapks on which 1 will remark hereafter, which is calculated to interfere materially with banking profits, we are enabled to meet you with the same dividend and bonus, and to add something to the balance to be carried forward to the next half-year. In view of the possibility of the continuation of the competition now existing, the directors consider it" prudent to keep a good balance in hand, which may possibly be needed in the fucure to equalise dividends. The policy to which I have referred, and with which most of you are no doubt more or less acquainted, was the offer by the National Bank of New Zealand of rates for deposits much in excess of those previously current, which were of course adopted by the other Banks, and subsequently W3re increased by the Bank of Australasia. Previously to this step being taken, the Banks acted in concert as to rates, but, on the pretext of forcing us to join in a general agree ment in Australia, the Bank I have last named withdrew from, and consequently upset, the arrangement in the colony. At the first sight it may appear as if their position was not unreasonable, bat when 1 tell you that our business in Australia consists almost wholly of our own agency business and dealings in exchange, it will at once be apparent to you that to join in the same agreement as the other banks have for general business would practically bo consenting to close our Australian branches. As there appeared no prospect of a return to an agreement here, there was nothing for it but to carry the war into our adversary's stronghold : but, before doing so, a renewed attempt was made to bring about an understanding, but without success. We therefore offered in Melbourne the same rates aa were being publicly offered here by other banks, and thougn thi3 action has been severely and very unjustly commented 011 by some portion of the Australian press, you may take our assurance that it is not working or likely to work to the disadvantage of this Bank. I need scarcely tell you that the offer of the present extreme rates for money is altogether foreign to the policy we should desire to adupc, and I am sure subversive of the best interests of the colony ; for though it gives depositors a present advantage, it withdraws money from the ordinary channels of business, and inevitably leads to correspondingly high rates for advances. This has not yet been much felt, the competition between the banks keeping down lending rates, but the time will come when the banks will try to make up for the present low scale of profits, and I hoj^e the commercial community will then remember that the pinch has not been caused by this Bank. The figures in the balance-sheet require little comment from me ; they prove satisfactorily that the business of the Bank is being well maintained, and before sitting down I will only add that in consequence of the maintenance of high prices for wool and a most abundant harvest, the trade of the colony is in a very buoyant condition, while the late successful negotiation of a further loan by the Colonial Treasurer gives assurance that his scheme of public works will continue to be vigorously prosecuted I have pleasure in moving that the report and balance-aheet as read be adopted. Dr Campbell seconded the motion. Mr F. L. Prime said that, in recent letters in the Australian papers, on the subject of the high rates of interest offered by the Bank, he observed they were accused of attempting to attract Australian capital to New Zealand. Might he ask if that were one of the objects in view ? Mr Murdoch, in reply, said — I may say at once, that, in the recent action taken by the Bank in Australia, no such object as that alluded to by Mr Prime in any way influenced the directors. They were simply actuated by a desire to bring about, if possible, a better understanding between the Banks, by convincing thorn that the B.*nk of New Zealand was in as goqd a position to make them pay for deposits in Australia as they were to make it pay here. (Hear, hear ) But as to the statement itself -^-thaj; we were attempting to attract Australian capital to New Z^aland-rJf think we might very reasonably retort the accusation, and say that the primary cause of the reoent competition was a, desire on the part of foreign Banka to. atfcraat a portion of the capital now at use in New Zealand to Australia ; for the representative of one of the foreign Banks, and one of those th.it took the first action in this competition, publicly stated that he had instructions to. withdraw £200,000 of capital which he had at use in the colony, that he could only do so. by squeezing hia customers,, or by getting deposits, and that he had determined to zealously qarry out the latter policy. Now if we had allowed him to withdraw j £200,000 of deposits from other Banks by the offer of high rates the other Banks would simply have been disabled from meeting the ordinary requirements of their customers, and the money so withdrawn would have gone to Melbourne to meet his Band's wants. This, 1 may say, is one qf. the inconveniences to which a cx^ony Js exposed in dealing with. fcraqgA institutions, one day e^pandi^g ans another day contracting their business, not, perhaps, from any loaal ca.use, but simply in consequence of a liability or necessity that arises in another quarter, I think New $eajan.d has previously experienced the inconvenience, and this is but a repetition. But the accusation is only one of many I have seen in print lately, since I was in Australia. Another oharge was that we were squeezing onr customers. Now I fancy that shareholders and customers of the Ba»fc «F 9 better iud^ep of this th^ scribbling

letter writers ; and I think ?/*• may BafeJy challenge anyone to Bay "that reasonable accommodation has been refused to Anyone deserving it in the Colony. I feel quite sure it has rK>t been so. I hope shareholders generally, if they see such reports repeated, will treat them with the contempt they deserve, ;l= d look upon them merely .as so many weak inventions of the enemy. (Hear, hear ) Mr Cherry remarked, with respect to the agency in Sydney, that when the increase of capital was mooted there was a question, raised as to whether the Bank was going to enter into business in Sydney, and he then understood the reply to be that it was not. He would like to know whether the present institution in Sydney had undertaken general | banking, or was Bimply an agency for the head office 1 The Chairman replied, that the branches in Australia had not gone into actual banking business. They were simply accessories of the Bank of New Zealand to|enable it to do the business it required to transact in the colonies to the best advantage. Mr Cherry accepted the answer as satisfactory. He might be permitted to add a word to what had fallen from the Inspector on the question of local banks versus foreign ones. Having resided in the other colonies for some time, he was in a position to say that the same inconvenience and difficulty was experienced there some years age. The colonists had to suffer pressure, and some of them were ruined virtually through the action of the banks. At that time they were all English institutions, and there was not a colonial bank of any position at all in Australia. The remedy being in their own hands they availed themselves o f it, and since the establishment of the Bank of New South Wales and the Bank of Victoria, such pressure upon the colonists had been prevented. The fact of having the chief bank in the place, managed by their own people, saved the inhabitants a great deal. He was of opinion that New Zealand also ought to have similar institutions of its own. The Chairman expressed his satisfaction and concurrence with the remarks of the last speaker. He thought that the people of New Zealand at all events, would know that the Bank of New Zealand had excited a similar influence in the Colony to that referred to as having operated in Australia. The necessity for such influence was not so great now as it was when New Zealand was not in so prosperous a condition. But be had seen it exercised, and had heard it remarked by many, that the service done by the Bank to the Colony of New Zealand generally — both North and South — would not be forgotten. The motion for the adoption of the report a?id balance sheet was then put and .carried unanimously. Mr Comisky proposed a vote of thanks to the Directors and the officers of the Bank, for the satisfactory manner in which they had conducted the business of the institution during the past halt year. Captain Casey seconded the proposition, which was carried unanimously. The Chairman in returning thanks on behalf of the Directors said : — 1 feel very much flattered at th« expression of your continued confidence in the Directors of this Bank. I can assure you on behalf of myself and brother Director?, that our object has been to promote the interests of e the proprietary of this Bank, to make it a permanent institution of New Zealand, and one which will not only command the confidence of the people of this oolony, but also of the meroantile world. So far I think our efforts have been successful, and it will not be for lack of exertion and care on the part of tho ! directors if that success does not continue and increase. 1 have much pleasure in congratulating the shareholders upon the recent acquisition to our London Board of a gentleman well-known in the old country and the colony. Our late Governor, Sir James Fergusson, has joined the Board ; and I think that from the position he occupied in the colony, and the knowledge he possesses of New Zealand, he will add to the standing of the institution. 1 again thank you, gentlemen, for your kind expression of satisfactions Mr Murdoch — Gentlemen, — On behalf of the staff I have very much pleasure in acknowledging your vote, of thanks, which I am sure will be a source of congratulation to the officers generally ; and I need scarcely assure you that no increased effort that is possible on our part to maintain the position of the Bank in the future will be wanting. This was all the business, and tbe meeting adjourned.

Dr. £ s. d. Bank Stock .. 000,000 0 0 lteserve Fund 180,000 0 0 Notes In Circulation . . . . . . 4<55,420 0 0 Billß Payable in Circulation . . . . 1 ,400,308 0 0 Deposits and other Liabilities .. 3,884,117 15 3 Balance of Frolit and Loss, at 30th September, 1874 13,016 6 3 Net Frolit for half-year . . . . 48,058 4 10 £0,G44,£80 0 10 Cn. £ s. d. Coin and Cash Balances . . . . 507,403 0 11 Bulliou on hand and in tvansitu . . 256,fi04 12 10 Government Securities .. .. 300,000 0 3 Lauded Property, Bank Premises, and Furniture 102,020 1 3 Bills Receivable and Securities in London .. .. .. .. 1,477,020 8 0 Bills Discounted and other Debts duo to the Bank .. .. ... 4,001,103 3 4 £('1,644,880, <i 1Q 4*nqpr.p 1,0.33 AccpuwT, £ 8, d Tq dividend at the rate of 10 per cent nor annum . . . . . . 30,000 0 0 To Bonus of is per share, equal to 5 per cont .. .. .. •• 15,000 0 0 To Balance carried to Frolit and Lohs, New Account . . . . . . 10,074 111 £01,!>74 11 1 £ s. (1. By Balance of Profit and Loss, at 30th September, 1574 . . . . . . 13,010 fl 3 By Net Prolit for hall-year, after ■writing ofl" bad deljts „ „ „ 48,058 4 1Q £01,074 11 1 ItESKUVE Ftj'^D, To. Balance „ „ „ „ ISO.OOO 0 Q By Balance from last statement „ 110,000 0 Q