BANK OF NEW ZEALAND

Press, Volume LXVII, Issue 14072, 17 June 1911, Page 6

BANK OF NEW ZEALAND

ANNUAL MEETING OF SHARE-

HOLDERS.

REVIEW OF FIFTY YEARS'

PROGRESS.

(Br T&ECBArn.) WELLINGTON*. June 16. Tho 50th annual meeting of shareholders of the Bank of Now Zealand was held to-day. The Chairman. Mr

H. Beauchamn, presided. Tho Chairman, in nmvins the adoption of the report and balance-sheet,

said: — As you are aware, this is the jubi.ee year of the bank, and it gives mc ver--

great pleasure indeed to preside on such an auspicious occasion, more especially as the report and balanco-sh-wt submitted to you disclose so satisfactory

a position. Following my usual practice, I ivsil first review briefly the figures of the bilancc-sheet that has been distributed

among you. Capital.—The paid-up capital of the bank remains unchanged at £2,000.000. The Reserve Fund.—ln my speech

Inst June, you may remember I «'Xpressed the hope that the bank would this year lw> in a position to show its reserve fund and undivided profits ;.t not less thnn £1,0J0,000. lam pleased to announce to-day-- that our reserve

fund, after taking credit for an appropriation of £200,000, which the directors propose to mako from the profits at March 31st last, will stand at £1,000,000.' The following table showing the rapid growth of this fund since 1906 may !>e of interest to you.:— £

I March 3lst, 1906 ... SI.2JU 1907 ... 200,00f> 1«OS .. 450.000 650,000 1910 ... 800 ; n;io 1911 ... 1,000,000 You Mill obscrvo from tho. balance-. ieet that £500,000 of the, reserve fund now invested in British Government purities. „, „.„ Notes in circulation stand at £ l J< < -*•> an increase of £57,917 as compared DljSstte'aremore by £3,199,066 than t March. 1910. This increase » duo i a, great measure to larger Goveniicnt balances, but ordinary deposits., otli free and foed, also show a coniderablo and satisfactory expansion. Bills payable and other liabilities how an increase of £292,503, mainly i bills payable, which are always an ncertain and varying quantity. Turning to Die assets side: Coin, Bullion, Money at tahort Can, tc _ As compared with the previous Wγ, money at short call, Govei-nmeuC tnd other securities m London togethr how an increase of £2,818,0y0, ana ?o™ stand at £0,710,289. »mh balances are more by ±.ivv jld tan- at March. 1910, the item, *ow Wing at £3.248/290 Bullion al,o jbows an increase of &o\*. in iew of the considerable expansion in Keita to which I have already reared, a corresponding increase.inl cgh issota is, of course, to be looked for So" fibres show • bank v head toother with tho amount o X'reSle and tb clonics are eaual to b7i per cent. (o. CT(ntl» £) of the.total' babihtie ■A the bank to the. public. Bills receivable in and v H-nrut are less by JUooi,yo» xnan .i S 31st, 1910. To shrinkage ii the exnorts from the Dominion tlv lesser ammmt under this heading ma; b °lniSenta in the colonies stand a £1,338,010—an increase of £1&M» o. last year's total, representing, the e> tent of-our further purchases of dc bentures of local bodies some of whio are held only temporarily pcnd.ng real Bills discounted an other, advances show increases < £77,177 and £912,367 respectively o the previous year's figures, the natun JSuft of renewed activity generallj Bearing in-mind the.keen oompetitio for good advance business that has no existed for a considerable periodl, tl expansion in our advances must be rewwded as very satisfactory, and indicates that we.are getting a fair share of the suitable business offering. Ifc is hardly necessary for mo to repeat that this very important branch of the bank's business continues to receive onr.greatest caro and at^ntion. Assets Realisation Board Assets.— The following table shows ai steady and satisfactory reduction m these assets for the year.— h March 31,19101 31,1911. Ba^XS« n£b " £286,809 hn,m -We aro continuing onr efforts to disSa SSfpr h o e Srt yi ,,,dpr^ ?9^a at £423,739, an increase of *o<?. y - J9 on the previous year's figures. This somewhat large increase is mainly duo to the acquisition of our new premises in Collins 9 street. Melbourne, and also to the purchase of a „ central site in Sydney, which will enable tho bank "• to- erect suitable premises of its -own in that city. The opening of several new branches and agencies, and tho necessity .for the better equipment of our. premises at other points in the Dominion, has entailed considerable expenditure in building operations -during the year. . P Profit and Loss.-The■ net Profite or the year, after paying the £40,000 interest on Buaranteed stock, and makinff all necessary appropriations, inclufling provision for the Bank's annual erant to the Provident Fund and bonus to tho staff, as yell as allocatins tho sum of £20,000 m reduction of hank premises and furniture accounts amount to £295,270. Adding the amount brought forward from last year 13-H ami deducting tho amount ot interim- 'dividend of 6 wr cent, on preference and ordinary shares paid in becember (£60,000), the sum available for distribution is £299,400--as- against £270.384 last year. The dir«*™, s now propose to pay a further 6 per cent, and bonus of 3 per cent, on ordinary shares (making 15 per cent, for the rear), and a further 4 per cent, on preference shares , (making 10 percent, for the year.) The total amount distributed to shareholders for the year will therefore be £120,000. Of the balance remaining, it is proposed to transfer. as already mentioned, 000 io the Resen-e lund and to carry forward £34.405. The result of tbe year b -workinß, and the increased dividend now proposed, will, I feel sure be Togarded by shareholders as highly satisfactory. GENERAL REMARKS. In stuclviuE + -he facts and figures relatinc to the trade and finance.of New Zealand there aro many, conclusions to be arrived at. and I feel constrained to say that, in view of the figures I shall presently quote, it would be wi«e, on tho part -of the business community, to pursue a policy of economy and caution. The trade returns are not as encouraging as one could wish, and, although they are not actually disconcerting, they point to tho possibility of some littlo stringency m the near future. The values of the exports and imports for the year ended March 31st last, compared with the figures for the three previous vcars. disclose the fact that, while "in 1910 there was a big expansion in

exports and a contraction in imports as compared with 1009. for the yoar just closed.tho growth in exports is disappointly small whilst the increase in imports is exceptionally The totals (excluding specie) are r.s follows: —

Year ende/J Exjiorts; -Imports: March 31st. /.' ~-.,,. ,„, 1903 ... 1T563.842 17.466.421 190 D ... 16.767.818 16,313,759 1910 ... 21.467,387- 1-»,773..821; 1911 ... 21,497,205 17,3«w,00fa

It -will bo noted that while exports for 1911 show an increase of only £29.818. inrxirts have increased. by .£2,611.24.3. 'The figures indicate a disposition to over-importation, winch, if not checked or counterbalanced by a corresponding r.rowth in our exports, may lead to stringent financial conditions' in the Dominion later on. The position suggests to the discernine the need for caution. It is out of "the amount realised for our exports that wo pay for the goods we .import: and aUo provide for the annual interest on the public indebtedness of the community "to the foreign money ler.'-cr. The interest charge on-our debt is estimated at £3.ri00,000 per annum, ami doos not .linear excessive. In the tour years to March 31st. 1011. our imports "wore valued at £65.939,067. and the amount due on interest «}«nnc th« same wcriod was. approximately, £l-1,000.qw. New Zealand had therefore to hnd a sum of £7»,939.0K7.' Ocr exports for the period totalled £77.!596,202— so that v.c were £2,3J2,813 short of require-

ments. . , v ♦>--» v The adverse position shown by .' v exports during the current produce year v commencing October last, i* mainly due ( to the smaller amount received irom the v.ool clip. A steanei- quantity was t shiopod : for the seven months to April v 30th last, tho wei 2 ht of wool exported t wis 102 oll.3fiS!bs., while for the cor- £ re'-po-idir" seven months of the pro- \ viotis' Reason the quantity was j IG7-ir»« -iJTlbs.. revealing a shortage ot s 11 8")7 OTPlbs- The decrease m the 6 total value i fi £978,700, and arises in , the smaller totals of the first four , months of the present rear. Hie , monthly figure* '.'.to as follows: — j 1910-1 1. 1909-10. ' April .- 480,673 bbl.SAo ' '£',-),78n.]77 £0,767,927 For tho three months to' December there ivas an increase of £316,?»<e; but in the four months of this year there is a. shrinkage of £1,295,126. Dairy Produce also shows a shortage in the first four months of this year, the decrease in butter being £< 9,820, and in cheese £G5,709—0r a total or £1i5,535. The unfavourable weather experienced during, tho. season is ot course accountable for this. Tho dairy industry, hovteVer, continues to make wonderful strides, and what has been accomplished during the past four ye:u-s is positively amazing;. Comparing the value of the exports of butter and cheese for the four years ended March 31st, 1907, with the four years ended March 31st, 1911, we obtain the following :— 4yrs (o 4yrs to Mar. 31, liar. 31, 1907. 1911. Increase. £ £ £ Butter .. 5,836,037 G. 255,991 359,954 Chees* .. 1,102,50* 4,059,615 2,057,111 £6,998,541 £10,315,606 £3,317,065 The increase of £3.317,065 is nearly 50 per and. snows remarkable progress. The:gain, however, arises from the expansion of the cheose output, which this' season has been tho mainstay of the dairy industry. The prosperity'°f'the dairy farmers of New Zealand'has been long-continued, but, in the natural order of things, a setback may reasonably be expected. In this connection I am still of onmion that the ■ prices. of- dairy land - are maintained'at too high a level. The meat trade has engaged a good deal of attention owing to various reports as to tho intentions of the notorious American Beef Trust. So far as New Zealand is concerned, there is.l think, nothing to fear from the Trust, for there is no room for it here. In point of fact, it seems to mc that so long as tho 1 railways in this Dominion are owned by . the State, it would be r"ito impossible i for tho Trust to capture the meat trade, v Nor docs it seem likely that tho Trust o will accomplish mnch in Australia.

THE MONETARY SITUATION

Turning to tho monetary, situation, there is no doubt that Jin abundance-of money is available in. Now Zealand. The scope for _its employment, however, is restricted. Any industrial enterprise likely to requiro much labour is not viewed as a good proposition. Capitalists are unquestionable nervous at tho attitude of Labour, and this is to be deplored, for it must be patent that, unless there bo exhibited a spirit of greater harmony between Labour and Capital, no quickening ot industrial activity can be looked for, I have th© conviction that, if employers and employees exhibited a "genuine desire to work amicably together with a mutual regard for the just interests of each other, industries which are at present in a/languishing condition would spring into remvigorated life and prosperity. This is essential in the interests of the State. Whilst the. figures T havo placed before you emphasise, in n<y opinion, the necessity for a, policy of economy and caution, the immediate outlook is, speaking generally, by no means unsatisfactory. Although there arc strong indications that tho produce year will yield • a smaller return than the previous one, the difference will nob bo great enough to create any real hardship. Tho coming year promises to be one of low prices for commodities. Already in the United States there has been a <leclinein values 0f25 per cent., and in England and elsewhere the tendency has been downwards. It is probable, therefore, that our products will yield a smaller monetary return; but there should be an appreciable expansion in the volume of the output which should compensate for any fall in values. Trade and commerce the world over appear to be good and money is everywhere reasonably cheap. The expenditure of the huge 6iuns borrowed :n London. Paris, and Berlin by foreign Governments, municipalities,, and joint stock companies, during the past twelve or eighteen months must keep trade active; but above all, so far as *ew Zoaland is concerned, it is the trade activity of the United kingdom that, is of the greatest interest. British trade has been expanding steadily and the records of unemployment show that fewer people have been out of work. So lons as British trade L> good, tho prospects of New Zealand remain bright and proIfll The" chairman then briefly reviewed! tho history of tho bank, and went on i of the great difficulties and serious reverses through which tue bank has passed, tho position m wlncii it now stands ivlittle short of surprising and must afford shareholders m this iubileo year ground for miicii 2MSS- Vith Wtically nothing now on our books of a dead or unproductive nature,' the bank's resources are to the fullest possible extent con-sistent-with safety and stability, revenue producing; and in ordinary c.rcumstances there is nothing to interfere with its continued progress ana Pr Saff n —It is gratifying to testify.onco more to the loyal and efficient manner in which" our staff have- earned out their responsible duties. To - mark this our jubileo year in a practical manner, the Board has already paid the staff a bonus of 10 per cent, on their salaries for tho year ended March dlst. Recognising tho importance ot at-

traetiri* to the service we!|-cducat*d ■ W desirable voiitlis, the Board has revUa the salaries payable . tfSnfcr officers. Under the p-v scale an officer of fair average, ability. wdi»tnous and ambitious, can ramdh im"ovo h£ status. Whilst dea W w,th this filiation, we have not been unnlimlflll oV the senior; «> - ficers. and have rewarded special mo.£ wherever it has been, shown. I h^ c no limitation in affirniiiiE that our service to-day is on? of tho most attractive in Australasia. THE DISCUSSION. Mr Martin Kennedy -said he had much pleasure in seconding the motion for the adoption of report - ana Stance-sheet. He <-°»f «?«;*?* chairman on the great industryhe ijd shown in producing the repoit. tut. W?n of which fell upon hinvConsidering the figures in the it, was an honour to second the adontion.of the report. Seeing .that this was the banks jubilee, ho would take - the opportunity oi expressing the gratification of the shareholders cenerallj - at the splendid position of the hank ■ i and atitho success attending */' i wl § proprietorship-Government control. He knew that this was a doubtful point in the minds of many people, especially these at a distance, who had. not. nag an opportunity of knowing its value, and the very great-sen-ices rendered to the bank by "the Government had «t----v.-jivs been gratefully acknowledged h> nil'the directors and shareholders. Ho was quite sure he was voicing the sentiments of the shareholders generally, hen he said that that feeling was m 3 wav lessened when tho second inestment of £500.000 was made by. the overnment in 1904. He emphasised lie fnet that the present partnership ated from 1901. not 1894. They found iany individuals expressing regret liroiigh the public Press that the l.ovrnme'nt, instead of guaranteeing ■ vha sink had not made it wholly a btate ank! It was now seventeen years ince that crisis occurred, and not. a ingle voice was raised in favour of that, •roposal. On tho contrary, there was ejoicing when the Board exercised its i"ht-. reserved under the Act. of pnyback the Government.? half million rithin six years, that right boinjr exer:ised in 1000. one year before the. exWry of the limit. 'That action of tho soard was in part due to the gratitudeclt by them to the Government for ;ominß to their rescue. This capital van in preference shares at 3$ per cent, or all time, and otherwise might well iiave been refained. The feeling was itronp at the tiiro that the Government, liad risked too much capital in tho bank. The opinion of the late Mr >eddon was that, the shares' would -rise :o £5 on the passing of the legislation •eferred to. This showed Mr Seddon's ircscinnoe. Sir Joseph Ward had also seen tho wi.?dqm of the Government's iction. He concurred in what tlie chairman bad said with reference to bho service of the older officers of the Bank. The gratitude of tho shareholders was in a large measure due'to Mr John Murray, who'undertook--the negotiations with the Colonial Treasurer, and brought them to a successful issue. Mr Kennedy, in , conclusion, referred to tho disaster that would certainly have'followed and have hoen so widespread, had tho Bank heen compeJled to-close its doors. Mr John Mill congratulated the directors upon the position of the" Bank, today. But for the Government's assistance, the Bank would have gone under, and many of tho shareholders would have been overwhelmed in it. He wished to know if it had been contemplated to pay off the Government j when the loan money matured in 1911. He believed the Board paid the Government 4 per cent., and that was a considerable..amount. A 15 per cent, dividend did not sound so much when it was considered how long the shareholders had had to be. content with small dividends, or no dividends at all. Mr T. S. Weston agreed with the bonus voted to the. staff to celebrate tho jubiieo yearj but, he. suggested, that the director's of the Bank were insufficiently ■remunerated, and he proposed to move,; as r.n amendment" to the adoption of the report,-"That tho sum of £3000 should be granted to the directors as a bonus •in recognition of their-large and-.- increasing duties and responsibilities, tho £3000 to he distributed among them•by themselves as. they thought fit. , Mr Mill seconded the amendment. He said he would go even further, and increase' tho remuneration of the. directors. "■ The Chairman said he-could ..not accept the amendment, because no notice had been given of it. Further, it would bo ultra, vires, the remuneration having been fixed by Act of Parliament. Tho remuneration paid was, however, inadequate- in view of tho increased x-esponsibiiities and arduous duties of the directors. Moreover, tho increased returns warranted an increase. He could not, however, accept tho amendment. , , ', Mr Mill then suggested that a bonus of £500 should bo granted to the Chairman. . ' ■ • .'■ ■Mr Weston agreed with'thw, anc seconded the proposal. He thoughi tiiero could be no objection to the pro posal. The services rendered by th< Chairman were not only to the share holders, but to the [Dominion as '< whole. He instanced the action takei by the Chairman in the crisis three oi four years ago, which was. averte< solely through his instrumentality. The Chairman said ho could not ac cept tho motion. At the "same time ho very greatly appreciated the re marks made by the shareholders ci the subject. Mr Martin Kennedy said he lift l much pleasure in adding his testimon regarding the Chairman. Ho cor sidered that the remuneration vet wholly inadequate. If it were £100 a year he would not blush to take it the service was worth it. (Hear, hoar The motion was carried unanimousl; The Chairman briefly returm thanks. Beplying to Mr Mill's r marks, ho said that there was currei £1.000,000 worth of debentures bea inj the Government guarantee; tin matured in 1914, and bore interest ; ihe Tate of -4 per cent. Before tl expiry of these debentures, he had i doubt the Board would. carefully co sider the best course to pursue wr regard to their redemption. They we treated as capital which brought t! paid-up capital to two millions stcrlin As to the dividend, he hoped it won remain at 15 per cent. He did n like to prophesy, but so far as could see, under normal conditioi there was no reason why it should n continue. The Government return w limited to 10 per cent. Dealing wi staff matters, the Chairman said tli the number of officers was 852., wi salaries totalling £160,678. The nu her of officers who had resigned or w< dismissed in'connection with irregula ties totalled two and seven respective The amount involved vms under £! but it was not lost Hy the Bank, as was claimed from the guarantee fin The percentage of these irregularit to the total salaries was .00124 (lav) ter); a microscope was needed to i it. The adoption of the report and h nnce-sheet was unanimously agn to. ■ . Ifr Kennedy observed that the ca tal of tho Bank; was £500,000—1 shareholders , capital. The Chairman explained that it t £2.OOO,CKKK-£500,000 shareholders' ca tal, £.jOO,OOO preference shares issi to the Government, and £1,000,(KM per cent., guaranteed debentures. "Wl the directors applied for a renewal the Government guarantee in resp to-the £1,000,000 4 per wnt. stock, Government insisted upon obtain fiduciary interest in tho shape of shf in the Bank. Tliis broucht the t< available capital'of'the Bank ' up £2,000.000, and th© figures were tli to prove it. This concluded tho business.: