BANK OF NEW ZEALAND HALF-YEARLY MEETING.

Press, Volume LII, Issue 9023, 8 February 1895, Page 3

BANK OF NEW ZEALAND HALF-YEARLY MEETING.

——. ♦ (PRESS ASSOCIATION TELEQBAM.) WELLINGTON, February 7. * Tho halt-yearly meeting of the shareholders of tho Bunk of Mew Zealand was held in the Chamber of Commerce this afternoon. About sixty shareholders, and all the Directors resident in tho colony, were present. The Colonial Secretary represented the Government. Mr" William Watson, the President of the Bank, was in the chair, aud said—lb is not customary at the half-yearly meeting to present accounts, but on this particular occasion'your new Directors consider advisable to state the figures of the balancesheet which had been prepared for the 30bh September, 1894, that being the end of the half-year, and to tell you what you should know regarding the position. The following are the comparisons between the figures of the 31sc March and 30th September, 1894:— Liabilities. March 31st. Sept 30th. Capital paid up » 9XOOO 2,416,149 Hoscrvo JTund .. 45,0<K> 15,000 Notes in circulation .. 515.55S 4tii,Boo Bills payable.. ... 1.413.9D7 S7u.lO(S U<3po*iwand liabilities.'. 8,213.199 . „ 7,619,103 Frontandloajaccotint;- : 17,32* *' Totals .. ~ 11.135.6 M 11,462,981 Assets. ' March 31st. Sept. 30th. fi & Coin, && „ ._ 1,463,331 1,637,023 ltnliiou .. ■ .. . ÜB,Cao 78,900 JJilla receivable aud Bills discounted .. 2,333,073 1,300.103 Advances aud other debceduetotheßantc 4,853,5(30 6,505,514 Investments in BiiUsh Console. && .. 61,521 G08.635 Bank Mew Z?aland Estates Co. bhares .. 2,860.000 1,850,000 Landed property, pro- . . niiaes, &o. .. ..423,319 415,429 - Total .. ' ... 1M2>,504 11,482,981 The increase of £1,516,440 in capital is doe to the instalments of the Government guaranteed* Block having been received. The decreases in notes and bills payable ; are ( usual at the time •■ of year. The deposits and other' liabilities show a decrease of £563,896, but this is in most part due to withdrawals in the United Kingdom, partly on account of the event which occurred in "June last, and partly because the rates of interest have been lowered. "¥ on are, in fact, tJ'.be congratulated on having exchanged these deposits for guaranteed stock. The Bank had too much borrowed in the United Kingdom by way of deposits and will not again take so much. The excess' was both costly and unreliable. The profit and loss account shows a decrease of £20,516, which represents, I am sorry to say, a loss. made duriDg the half year ended 30th September on the Bank's working. This makes it hardly neceasary for mc to say we do'not propose to pay any interim dividend. On the *' assets " side there are increases in coin, cash balances,' money at call and short notice, and consols andotherecocksamouatiugto£72o,B2odueto the temporary aud permanent- bestowal of part of the new capital. The item " Advances and other debts due to the Bank " shows an iucrease of £650,975, also due to the above cause as at 30th September.- Over £700,000 < was invested in short loons in London; * returning vory email interest, whilst we were paying per cent, on deposits and 5£ per cent, in Bank cf New I Zealand, Estates Company's debentures. Our rates for deposits are now reduced. The Estates Company have given notice to pay off £750,030 debentures in .May next, and I have pleasure in being able to ! inform you that with the sanctiou of the [Colonial Treasurer we have already invested almost all the .second million derived from the guaranteed capital, iv sound and liquid securities, which bring in interest approximating closely to what we now pay in London for twelve months' fixed deposits. Some shareholders wish for closer information regarding the investment of this second mrlliou, and it Has been said it is not good banking to. pay 4 per' cent for money and invest it to yiold a lower rate. Remember, however, this is a reserve, and that it 23 indispensable that the investment should be of a safe and liquid nature. Every Bank taking fixed deposits has' to keep a certain proportion of reserves,, which do not earn the rates paid for deposit*. The London Board has iv vested, a large portion, of the second million in foreign 3 per cent, stock, bat when this was referred to the Colonial Treasurer he demurred to it on the ground

that it was of a too speculative character, . aud agreed with ua that the' money should be rather invested in colonial stocks > so as to yield a higher interest, and 1 benefit tho colonies rather than foreign! , countries, so a largo amount has beeuj . invested in colonial inscribed stocks in > London. The purchases of stocks are atiil i going on in London, and probab y by this - lime the balance is invested, but from our : latest advices we know we have £608,000 in colonial Government stocks, besides British consols and other liquid securities aggregating £172,600 more. The balance, 1 if any, will be kept in coin until it can be . judiciously invested in accordance with the Act. Altogether the figures show a i vastly greater strength when compared with, the previous half year, and , very full security to those dealing wilh - Lhe"i3ank. But 'although the recurity to »f depositors is more than ample it must be '; home in mind that in order to work the j Bank advantageously for the proprietors we j must let tho public see it to be a profit- . earning Bank. Suscesa to the Bank means ■ better rates for its exchanges, and many j other advantages. You will remember at i i the ordiuary general meeting of tho Bank j held in London* in August last .the late Pre- ■ j sideut stated it was likely some provision wouid berequireifor bad aud doubtful debts. >j We found on umklog a careful examination i of tho Bank's atliird, iv which examination ] we were ably assisted by the Government Auditor, there were losses to ba provided ' for somewhat exceeding £300,000. As we I did not see our way to declaring future profits with these unprovided for, and as it was found to be imperatively necessary to ' add to the earning power oi the Bank in j order to rehabilitate your property, it was evident a call of one-third of the reserve* I liability could not be avoided. We have ' satisfied ourselves that whea this call is paid, and provided we can work on the lines ■ we have laid out for ourselves, of which ; we have every expectation, theu the earning power of the B&nk will be placed I • beyond doubt and no further call be 1 ! necessary. It is well kuown that the Bank has to carry a load in the Bank of New Zealand Estates Company's affairs. Assistance from the Government, both in guaranteed capital and legislation, is calculated, however, to enable us to clear up that dependency. When we assumed office wo found the direction of the Estates Company, located in London, entailing an unnecessary expense of several thousand pouuds per annum, besides reudering tho management; of the Compauy's aifairs 'more complicated and difficult. The direcciou will now be entirely in the hands of two of your Directors, Hon. Mr Johnston and Mr Booth, with whom I am associated, for tho purpose of consultation and signature of deeds, and I venture to say no two gentlemen could have been selected with more fitness than those mentioned. Economies effected in the salaries of tho Estates Company alone will be very considerable, and all unnecessary and unrcmunerative expenditure has been stopped. A good deal has been said about the money that has been thrown away in the expenditure of the Estates Company. Perhaps there have been somo errors of judgment in that respect, but a portion of the money expended has gone to pay off the mortgages, and to increase the live stoca of the Company, as well as the carrying capacity of the estates, and than cannot be considered thrown away. Wo have a most valuable and productive asset in the sound business of the Bank. And here I would signify my admiration of the way in which the majority of the staff have kept a good business together, and also of t ha loyal way iv whioh the customers of the Bank have rallied round it. These factors .are of immeasurable, advantage to you, and are indeed invaluable assets which, with proper treatment, I firmly believe will succeed iv making your property valuable again. Success has already attended tho several efforts for more profitably working the Bank, and I can assure you economy is being studied to the utmost ia its direction and management. The branches at Newcastle, Dargaville,,Sycleuhara and Cromwell have been closed. , The Russell branch will shortly be withdrawn, and we have secured good business of other Banks who have closed in Whangarei and Tauranga. Several of the oldest members of the staff are being retired on. pensione, which will be paid from the officers' own fuude,. without cost to the i!ank,anci otherreductions h&vebeenmade in the staff. Mr Andrews, a gentleman wellknown throughout the colonies, and respected for hie probity and ability, has beeuappointed acting General-Manager. All doubtful advances have been stopped for liquidation, and fresh advances as well as, current business are closely examined by the Directors. The yearly balance will be struck on the 30th March, and it is the Directors' intention thereafter to propose to you certain measures which are at present in course of preparation and inadvisable to disclose at this stage, but which, if carried, they think will be to your advantage. This will probably be done ac the yearly meeting in August, if flot previously, and when I meek you then I hope to have a more pleasant tele to tell than I have now; but you will bear in mind the savings we have effected, and the results of our working will not bear fruit until some months are passed.! In the meantime, and uutil your • new Board have had reasonable time to show fou what they can do in your, interests, would submit to you that it is both unfair to them - and disadvantageous" to yourselves to foment agitation, which gets published abroad, and ie calculated to be useful only to the enemies of the Bank. (Shareholders residing out of the colony, no doubt, have beeu disturbed in mind by the recent, reports, low prices and 1 dulnesa of trade. They would, however, do well to note the large increases which in the two years ending March, 1894, had taken place in the possessions of the people. During that period the sheep in the colony increased by 1,660,077 and • the cattje by 138,772, whilst the increase in cultivated laud was 1,169,826 acres'. The exports of mutton were steady. - Those of butter increased by 6842 cwt. and cheese by 13,161cwt. per annum. With these proofs of the growing capacity of the colony and the industry of its people, we may,> I; think, have confidence in the future, aud if prices improve we shall derive all the greater benefit from them., I now move the adoption of this report. Mr Hallenstein, of Dunedin, seconded the motion. As an" old shareholder and one who had lost a lot of money in the Bank of New Zealand, he thought it better' to bravely face matters than to give way to feelings of gloom and depression. The late Board had acted wisely in taking the advice of Mr John Murray, who bad brought matters to a successful issue, skilfully aud promptly. Personally, be wae independent of any Bank, and if a call had been made of all bis liabilities he could have met it. But he shuddered to think what would have resulted to the people of Mew Zealand. Great credit was due to the Government and both Houses of Parliament for averting a great calamity. * The recent call of £3 6a Ud ought to make the Bank one of the strongest in New Zealand. Hard as the call would be on some shareholders, with whom he strongly sympathised, it was perfectly legal. It was unwise and useless to agitate with a view Co resisting its payment. With an energetic and clever man at the helm, surrounded by a good Directory, be thought the Bank at no very distant date would again become a dividend-paying 1 institution. The Bank had one of the finest connections in all New Zealand, and they could reasonably expect

that,. villi good management, they would get somo dividends again. Mr Hallcnstein went on to say that, O3 one of j the shareholders he would always uphold I the Directory in seeing that the depositors I were safe, and for depositors the figures j as tread by the Presideut showed that this was one of the aafeat Banks in New Zealand. It mast be borne in mind that the earning power of every institution was decreasing, and that almost every country io the world was sunken by the small priess ruliug for its products. The outlook was uot good, but in our hours of depression and when things were darkest we sow the seeds of prosperity, and New Zc&iaud with all its drawbacks was making progress. As the President had told tiiem the colony's Bocks i and herds had iucrcassd wonderfully, the population was steadily increasing, country \vo3 daily being reclaimed from the wilderness, and he looked forward J:o a near day when we would be again prosperous, for ! the success of our financial institutions depended on the prosperity of the conn try. Ho believed there was not; a colouy under.the sun that had a greater future before it than New He impressed upon the shareholders that they must not; be remiss, as they had been in the post, in- allowing Directors to be selected without being sure that they were the right men in the right place. That was at the bottom of all the trouble in the neighbouring colonies. Hβ know the present Directors of the Bank were men of probity, and the best the shareholders could do was to hav*confidence in them and leave the ship in their hauds. Mr A. W. Blanchard contended that the President, in his report, had not afforded the meeting sufficient information, and moved, as an amendment—•• That the report of the President is not satisfactory, as it does not convey sufficient inforination." Mr R. Allan, representing Nelson shareholders, seconded the amendment, saying that practically the meeting had no information at all. He maintained that they must have certain information. He had been sent there b*r Nelson shareholders who deaired that information. Mr Watson said lie had received » series of questions from Mr Allan, on behalf of Nelson shareholders, and would answer them in due oourse. Mr Uichardeou said he could not understand the President's figures, aud he thought the report should have beoa printed before being phiced in the shareholders' hands. Mr VY<*is.ju said it was not usual to do this tv «.•*- -..aif-vearly meeting, besides ho was "•;.'■ under trio solicitor's advice in tho nuiL.d. Iα putting the amendment to the tucotiug Mr Watson pointed out that any shareholder who had uot paid the call was uod entitled to vote and had no right to be present at the meeting. Mr Richardgou said that, not being in possession of certain information, he had uot paid the call and would, therefore, leave the meetiug. , Mr Watson eaid it was not his fault that he had to give this ruling. It was provided for in tho deed of settlement, - Mr Allan wished to utilise a number of Nelson proxies, but the President ruled he could not do so, as they had not been lodged twenty-four hours beiore the time of the meeting. Mr Blanchard'a amendment was then put and lost on a show of hands. ilr Ailan thereupon demanded a poll. Mr Watson asked whether Mr Blanchard still wished to press his amendment. Mr Blanchai'd said be wished to press it to a vote for tho reason that there had been a whipping up of proxies on behalf of the Directors for this meeting. Mr Watson then ordered a poll to be taken, and in the meantime, proceeded to answer, the questions of which notice had been given. He answered Mr Blanchard'a questions as follows-—The debt of the old New Zealand Loan and Mercantile Agency Company was aetiU..* before the present Directors took office. 'l no. Estates Company were jointly interested with the New Zealand Loan and Mercantile Agency Company, in somo properties. The Bank took over properties from the Loan and Mercantile Agency Company for pact of one debts, and for the balance, ■ amonnting r to about £115,000, we took prior' lien de- ! benture. These have now- .been reduced by sale 3 to £76,000.-. The debentures are secured by a first.charge, Loan And Mercantile " Agetfcy -^jPompaVy , "" ',* Including uncalled capital.'. The debentures bear 4 per cent., but, by arrangement, the Bank gets 5 per cent, and holds a margin of security for its debt. The Bank of New Zealand has retained the whole of the banking business of the Government' in this colony, except one-third of tho remictances to London, which was given to the Colonial Bank in the late Mr Ballance's time. The securities yield about 3| per cent. « Mr Allan's questions were answered by the President as . follows:—The Bank of New Zealand Estates Company, Limited; is a limited joint stdck Company, registered in London, and lias a separate existence. The Board does nob coneider it to be to the. interests of the shareholders to publish a detailed statement of the accounts between the" Bank of New Zealand and the Bank of New Zealand Estates Company from August, 1890, to December 31at, 1894. It-is noc true that 16a in the £ was offered and refused for T. and S. Morrin and Co.'a (ironmongers) business in Auckland, and the business is being carried on at a profit. No good opportunity of quitting it will- be lost. Uvea if some of the shareholders aie unable lo pay the call there will be no difficulty in faying the £760,000 debentures due in May next apart altogether from the calL It is not contemplated that any further amount of, reserve liability will be called up. The A !. Bank's, financial 'position, would be strengthened by the amount received from guaranteed stock and by the calL Aβ to the fixing of the President's salary at £2250, due provision exists, in the deed of settlement, as per. clause 70 amended at the recent meetings-of shareholders, and the salary has been duly authorised in accordance therewith. ... Mr Watson, continuing, eaid that although.no direct notice of the question had been given, he was aware that shareholders wished to kuow the following :— "Has the Bank paid or promised to pay any sum of money to any person for services rendered to the Bank in connection 'with the passing of the Guarantee Act." His answer was ." Beyond the usual email , fees to the Bank's .solicitors for advice, and , a not more than adequate allowance b> the London Board to Mr John Murray, to cover his expenses, therp wae* nothing, paid or promised to be paid to anyperson." The Rev.' J. Riley, as a large shareholder from the South, wished to say a few words. The President's statement, he thought, was clear and concise, and contained all the in-, 'formation the shareholders could wish from the Bank. Mr Watson's conduct had certainly justified his appointment. He (Mr Biley) thought their Nelson friends had taken up an unenviable position, and it was unwise of them to come up with these captious questions. The present Director* had only been four months in office, and had noc had time to mako their presence felt. Twelve months hence would-be time enough to call their administration into question.' The action of the Nelson shareholders indicated anything bub a patriotic spirit. All the trouble is connection with the Bank happened years ago, when the Directors in Auckland became elated with the success" of the Bank, and. went in for perfectly reckless speculation. The Bank would rally and regain its former position, but the daje of 15 per cent, dividend*

would never be aoeu again. For that lie was not sorry, as it was not good for the colony. The shareholders should now brace themselves together, and assist the Directors and President to mako the Bank what it ought to bo, namely, the premier banking institution of the colony. Ho had great hopes of an amalgamation with the Colonial Bank, and if it took place he hoped to see one of the finest financial institutions in tho Australasian colonies. If any gentlemen were capable of securing this result they were now at the head of affairs, aud the Government would do anything to assist them. Ho had great faith in the good intentions of the Government) towards the Bank, aud believod they would honestly help it to release itself of the Estates Company. Mc George Allan was satisfied that if reasonable time were given to tho gentleinon now at tho head of affairs they would be able to show a better report than thafc presented to-day. Mr Blanchard said the London Board had paid an interim dividend twelve months ago. If the £300,000 of losses than existod their action was almost criminal. Mr Wa*aon said he had nothing to do with the London directorate. Mr Blanohard—"But the shareholders have." ■ Several "shareholders gavo a denial to the statement that officials of the Bank had gone amongst thorn collecting proxies for this mooting. Mr Allan reiterated his statement as far as Nelson was concerned. The result of the poll was announced as follows:—For Mr Blanchard'e amendment, 388 votes; against it, 17,994 votes. Tho amendment therefore was lost. The report) was then put and declared carried unanimously. Mr W. Nicholson then moved—-" That the questions submitted by Nelson shareholders have been answered by the President to the satisfaction of the majority ot the shareholders present at this meeting." This was seconded by Mr Orr; but, as an objection w&s taken.to it, the mover withdrew it. Mr R. Allan moved—"That a Committee of Investigation be formed, consisting of seven shareholders and officials of the Bank, to ascertain what the securities are whioh are held by the Bank against the. advances included in the globo assets; what it cosb the Bank to carry them on, and what profit is obtained from them; also to find out what is the actual financial position of the Bank, und forward a printod copy of such reporb to evory shareholder." He spoke strongly in favour of the resolution, which was secondod by Mr Blacchurd. - . Mr T. W. McKonzie thought the infor mation would be given if sougnb for at the Bank and in the proper way , . After a short discussion the Hon. W. W. Johnston aaid the Board had concealed I nothing. Since the Directors had been in office they had been very careful in rcgird to contracting bad debts. If they had erred at all it w&s on the aide of carefulness. He showed at some length why it would be unwise to appoint a Committee of Investigation. The Directors had bben required to mako the recent call by the Colonial Treasurer. They had no ! option when so directed. The Direotore - had carried out, on their election, the very enquiry compelled by law to value the shares at par. The Legislature had by this given them ample time to realise estates to the best advantage ; but the Legislature also provided that no dividend could be paid till the Colonial Treasurer was satisfied as to the position. The Directors could, therefore, only part with the globo estates at par, and therefore had to wait their realisation. The Rev. Mr Biley thoughb the Government had been exceedingly generous- and considerate in the whole matter. , Mr*Wataon was strongly of opinion that , the carrying of this resolution would be detrimental- to all concerned and asked the mover to withdraw it. . Mr Allan's motion was then pat and lost on the voices. The meeting closed with a hearty vote of thanks to and confidence, in the President] Directors and staff of the Bank.