BANK OF NEW ZEALAND.

Press, Volume L, Issue 14993, 13 June 1914, Page 7

BANK OF NEW ZEALAND.

ANNUAL MEETING

THE CHAIRMAN'S ADDRESS.

(STTKUI. TO "THS P_—-.' # ) WELLINGTON, June 12. The ordinary general meeting of the proprietors of the Bank of New Zealand was held at tbe Head Office, Wellington, this afternoon.

Mr H. Beauchamp, .chairman bf directors, presided.

With the consent of the meeting, the report of the directors and the balancesheet were taken as read.

The chairman, in moving their adop- " tion, said: — The report and balance-sheet having been distributed some days ago, tho • result of tho year's working is known j to you. I think you will agree with ; mc that tho position they disclose must t be regarded as very satisfactory. You i will observe that tho sum available for j distribution is £291,603, and that the directors propose to pay tho usual divi- , dcnd, and to transfer £175,000 to the : Reserve Fund, leaving & balance of i £51,603 to bo carried fo.ward to noxt ; year. Following our usual practice, I will , review briefly tho principal items in the balance-sheet. Capital.—The capital of the Bank, as ' at 31st March last, was as under:— AUTHORISED. £ £ 4 percent. Guaranteed Stock 1,000,000 "A" Preference Shares .. 500,000 "B" Preierenoa Share*.. 1,000,000 - — 1,500,000 Ordinary Shares .. .. * 3,000,000 £5,500,000 SUBSCRIBED. 4 j,«r.cer.t. Guar nteed Stock 1,000,0 1q ".-»" Prclerenc. Shares ... 500,00;" Ordinary Shares ".. 1,000,000 Paid up to £3 Co £d per chare .. .. 500,000 £2,000,000 The issuo of new capital (viz., 37,500 B preference shares at £6 13s 4d each, and 75,000 ordinary shares at £o 13s 4d each), which was in contemplation when wo last met you, has since been successfully carried through. The amount, £269,690. 'appearing under tne head of "New Share Account," represents the payments received up to 31st March in respect of instalments on applications lodged up to that date. Tuo application list did not, as you are aware,.close until Ist April, and as allotment could not be made until some time subsequent to that date, the amount does not appear in the balancesheot as passed to the credit of Capital Account. You will bo interested to learn/ however, that nearly every shareholder has applied for the quota to which he was entitled, and that, in the great majority of cases, the whole of tbe instalments have been paid up in full. The position, as indicated by . [latest advices, is is follows:— i *° To *

The Board will' shortly, consider. what will be the most satisfactory method of dealing with the comparatively small number of shares for which application has been made, and due notification of its intention will be given. " The Reserve Fund.—This fund, by !the-addition--of the'£l7s,ooo which I, have stated the Board - proposes, to'« transfer 'from profits',' will then stand at £.1j550,000./: With the. sum proposed to be carried forward, namely, £51,608. the Reserve Fund and undivided profits will amount to £1,601,603. As you are aware, the premium of 60 per cent. on the issue I ox capital recently made has to be credited to the: Reserve Fund, and from this source .the lund will, after adjustment, benefit to the extent of £375,000. Notes in circulation stand at £989,882 as compared with £994,680 a year ago. Deposits (£18,070,613) show the substantial increase of £1,655,974 as compared with the figures of 1913, this •movement being due prfnotipally to larger Government balances. Ordinary, deposits, however, also show an incieaso. Bills payable .and other liabilities exhibit an increase of £36,375 on the figures as at 31st March, 1913, and. now stand at £1,403,456. Coin, Bullion, Money at Short Call, etc.—Coin and cash balances (£3,261,510) and bullion £115,674), together show an increase of £228.255 as compared with the figures of i the-previous year, while the item money at call and short notice, Government securities, and other securities in London also oxhibits a substantial increase (£995.710), and now stands at £5,076,748. The larger Government' balances, already referred to, account for the greater part of this increase. I may mention that the totals tinder this heading, together with the amount of bills receivable and investments in tho Colonies, are oqual to 61.52 per cent, (or 12s 3d in the £) of tho total liabilities of tho Bank to the public. ' ' \ . . Bills receivable m London and in transit are more by £316,950 than at the corresponding date last year, and now standat £3,164,081. The increase is due mainly to an expansion in the volume'of the Domiinons exports. Investments in theCohDUies £9<2.1i0) exhibit an increaso of £14,902 as com- ! pared with the-figures at 31st March, I 1913 Advances.-.- the result of the jewsi lation of last session of Parliament, by which the Bank was increase its capital by • €:^*(^< o , n r f fourth of which has now been ssued) the institution is ma posit.on to_ take its full part in providing t™***™}™ . further "development of tho country and for tbe tiade and industry., that bills discounted »»-* »* b sL a fgS 2(wbich together, total a a * s ready show an increase of 3 > lo ' co_parea with the figures .of a year _go?and, as satisfactory business> offers, gradual increase vn the total S»^_S_^_l 3§__-Hs_3£ S^__-__££ quircments, have enjaiiea a Expenditure « J** £rreport _*?__.*-.-« i _s__Sm2ss3s6 liS-a property and premises gjmlat ; £44<£oT7, as compared with £407,827 twelve months ago. PROFIT AND LOSS. After the payment of £40,000 interest on guaranteed and So making of. all necessary appronriations, including provision for the Bank's _u_al grant to the provident fund as well as a bonus to the staff, and the -location' of £40,000 in reduction of Bank premises and furniture accounte; the not profits for the year amount to £303,490, as compared wth £302,530 at 31st March, 1913. Adding the amount brought forward from last „_** £-3.117. Imd deducting the

amount of interim dividend at 6 per cent, paid in December (£60,000) the 4"™ c ""T ail ? r hle> .for distribution is i—_,6oS. The directors now propose to pay a further dividend of 6 per cent, and a bonus of 3 per cent, on ordinary snares, and a further 4 per cent, on preference, shares. The amount distriDut ed to euareholders for the year will therefore by £125,000. As I have alstated, it is proposed to transfer ■tlvo.OOO to the reserve fund, and to carry forward the balance, £51,608. The dividend and bonus will bo payable in Wellington to-monw," 13th "instant, yctT-i"*" Dranc nes on receipt of advice. >Vhile on the subject of profit and loss, 1 may mention that the amount appearing under the head of "Rates and i laxes continues to increase steadily. I the whole of this outgo is in j New Zealand, where our total contribution tp taxation, ceneral and local, now 6*" c <*«s £57,000 per annum, or nearly iIIGO per --reek. In fact, the general tendency for expenses under all heads "s to increase in a sroater ratio than the profits of the Bank: but. in * !

respect we are only in the same position as similar institutions.

BOARD OF DIRECTORS

The term of office of Mr William Milne and Mr T>. J. Nathan, two of the Government appointees on the Board of Directors, expired on 31st March last, and they retired as at that date. " The Government appointed in their stead the Hon. Thomas Fergus, of nnnediii, and Mr R. W. Kane, of W"' Imgton both of whom are with us today. Mr Milne had been a member of the Board since 18D8, and always took a deep personal interest in tbe business of the Bank. His special knowledge and training as a Tyinker have, on many occasions rendered his services narticn'arlv valuable, and it i* fitting that Vr° v* * 30 ■"•ppreciative.'y acknowledged. Mr .Nathan waj also a zealous and active member of the Board during his comparatively short term of offi-e, and wo have to express our reec-enition of the time and attention which he <"e----'"'•'•d to tho T'ai'k's interests. The Hon. Thomas Fergus is too well-known as a public man of tho Dominion, and a me/chant of Dunedin City, to need ■»r.y intrcdu"tion from mc. And M T Kane 's. as yon are nil aware, an old officer of the Bank, well-known tf> most of you as a former manager of the Welbranch. We have pleasure in welcoming thorn anions us, in the assurance that each will brkic to bear noon the duties of his position as n dirctor of the Bank experience, qualifications and knowledge, which will prove relpful in the Beard's deliberations and conducive to the Bank's wel- ! fare. LONDON BOARD. To the chairman, and other members of the Ivondon Board, wo have to acknowledge our indebtedness in connexion with tho conduct of the operations in London, where, as you know, a valnaW° and profitable business is transacted arising out of the Dominion's trade, and, at certain periods of tho year, temporary employment has to be found for large accumulated' funds.

STAFF. -, In the task of administering the steadily expanding business of tho Bank, we are, of course, greatly aided by the fine body of men that constitute our staff. I am satisfied that in efficiency, zeal, and devotion to the Bank's interests, our staff is not excelled, if it be even equalled, by the staff of any other Bank in the Australasian Dominions. The London staff are also deserving of special mention for the zeal. they., have displayed in the performance of their duties, which this year have been somewhat heavier than usual. To the whole staff the Board have conveyed a tangible expression of appreciation by paying them a bonus of five per cent, on their salaries—a recognition which I have no doubt will have your hearty approval. GENERAL REMARKS. . You will, no doubt, expect from mc a review of existing financial and commercial conditions, and I therefore now turn attention to* them for a few moments. The London money market underwent a sudden transformation early in.the year. The best-informed financial writers in London had failed to predict the impending change. In December last' there was * very little prospect of any ease in the money market, yet by the middle of January it had become clearly evident that money was in abundant supply. The New South Wales 4 per cent, loan for £3,000,000, issued during the first week in January at tho price of £96, was a failure, as the underwriters were saddled with 90 per cent, of it, that is to say,- the public subscriptions amounted to only 10 per cent. A fortnight later, the Victorian loan of £1.000,000, also at 4 per cent., with a minimum issue price of £97, was subscribed threefold, and formed the first of a succession of loan issues (including one of the New Zealand Government) which were eagerly subscribed for by investors. The London "•Times," commenting on the success of tho Victorian loan, which was the first colonial issue to be fully subscribed for many months, remarked: "What the recovery of Imperial Consols means to our colonial kinsmen may be gathered from the cheering success of the Victorian loan. It would seem as if the long pent-up forces of investment needed but a little more encouragement to break forth into a flood of buying." MOVEMENT IN CONSOLS. Imperial Consols, which during 1913 had dropped to £71, and which during the first week in January stood at £71 15s, a fortnight later had risen to £74 advance of £2 ss.in two weeks. An immediate improvement in colonial Government stocks also took place, and prices, on the whole.. have since been well-maintained. The upward movement in Consols continued, and on 4th February the quotation was £77 12s 6d, the highest recorded for a long time. This turn of affaire was very acceptable, for gilt-edged securities had suffered very severely during 1913, and the English Banks had to use over two millions of their profits to meet the declension in values. The-Bank of England discount rate, which had stood at 5 per cent, since the'beginning of October, was reduced on Bth January to 41 per cent. On 22nd January it was again reduced to 4 per cent., and on 29th January to 3 per cent., at which it now stands. LOAN ISSUES. Tho buoyancy of tho money market induced many Governments to issue loans in London. Now Zealand,/ and | every State of the Commonwealth, have ; been on tho market, and have placed their loans successfully. The New Zealand Government 4 per cent." loan of £4,500.000, issued in January — £1,000,000 for redemption purposes, the balance for Public Works—was a great success. Tho minimum, price of issue was £100$, as compared with £98§ for tho last preceding loan of £3,500,000 issued in October, 1913, clearly indicating the improvement that had taken place in the interim in the condition of tho market. Upon the opening of the lists, a strong demand was apparent, and within an hour and a half, applications totalling £25,800,000 were received. Tho lists were then closed. The scrip immediately went to a premium of 1 per cent. Tho time for emission of the loan was well chosen, and the results no doubt exceeded all expectation. In the course of my remarks at our last meeting, I pointed out that the New Zealand Government had been able to obtain for its October loan tho highest price of tbe year for Colonial Government loans. It has maintained that position in its recent issue, as will be seen by the following*— Date Name of Am't Bate Issue of Iseuo. G_ve__e_t. of loan, p.c prico

that the troubles that have of late been experienced by the bond-holders of some foreign States (Mexico and Brazil), will operate in the direction ot enhancing tho popularity ot British and Oversea Dominion securities, as being, though less remunerative *rom tne point of view of annual yield, decidedly more dependable as regards security ot both principal and interest. lhe inference seems reasonable, and we may perhaps hope to see the stocks and bonds, not only of the Dominion Governments, but also of the Municipalities and other local bodies of the British Dominions, presently increasing in public favour.

NEW ZEALAND .MUNICIPAL LOANS.

We took prompt advantage of the opportunity, aSorued by the favourable market early in the year, to launch some-muncipal loans vrhich we had haa in hand for some time. Tho follow m_ were successfully placed:— On Jan. 28, City of Auckland, -22-1,500, On. feb: C ll?£ a ty of Christcharch, £100,000.

jon 4 k P bf_o. P CUy oi Dunedin. £150,000 4i p.c at par. The Auckland loan, being * -*J market, was .ve.-subsenbed. J**** Christchurch and Dunedin whicn >eic offered later, after the market had been .flooded witn otnor issues, were not. «o 'fortunate, and their underwriters we c loaded with allotment* m r , eas ".« ratio. The present disposition or the market towards colonial loans of ti is character has been clearly shown to be lukewarm, and we havo accordingly desisted from attempts ftturthci" issues in the meantime. Other opportunities will no doubt arise m iutuic, and those public bodies who are contemplating an appeal to tho London money market would do well to perfect all the necessary antecedent formalities, and havo their arrangements m such forward condition that issue of the loan can be made promptly when a favourable juncture occurs. While the treatment accorded to loans of this class is now much less favourable than that extended to them a few years ago, we in New Zealand nve. I think, reason to congratulate ourselves upon the terms we are able to obtain. When we compare our prices with those which others have to pay, our better position becomes at once evident. Each of the tbree loans above-mentioned w. it will be observed, issued at par, bnt an examination of the terms of other issues made during the first few months of tho year by mnnieinalifcios in other parts of the British Empire, and elsewhere, shows that several towns .nrd cities of importance havo issued 4* per cent. and 5 per cent, loanß at prices below par—some as low as £91. Tl is therefore clear that a muniHnnli''y. which is able at the present time lo issue its 4i per cent bonds at a minimum of par, has good reason to be very well satisfi""' »ri"*' +J*fi r THE SITUATION TO-DAY. Although loans, colonial and foreign, have been issued-in London with considerable success during the past five or six months, and the value of money there is at present low, the terms on which flotations can be arranged remain comparatively high, and political disturbances may at any time send them still higher. Caution is no doirfft being exercised by British financiers, and that there is need for it is evidenced by the unsatisfactory state of affairs in Mexico, and the financial troubles in Franco, China, and Brazil. According to telegraphic messasges to the Press, France is under the necessity of raising some £_4,OOO,UU'J almost immediately if she is to be_ in a position to meet her obligations. China and Brazil are suffering from financial stringency, whilo Mexico, after a period of exhaustion from internal anarchy, is now at war with tho United States. Some weeks ago the financial conditions in Mexico were extremely bad., and exchange had reached the worst point known for many years. British investors havo very extensive interests in Mexico, and tho "clean up" will involve many millions sterling. The United States Government alone talks of providing war funds to the extent of £30,000,000 sterling, There are other contingencies also that may jeopardise the money markoti or at least cause a disturbance. In past years Great Britain has lent vast sums to finance the trade and industries of the world, and tho disbursements under this head are worth recording. They are as follows: —

Canada was, as usual, the biggest borrower last year, her total being £44,119,000 as against £35,951.200 for tho United Kingdom, £18,628,900 for Australasia, £19,000,000 for the United States, £15,000,000 for Brazil, and £12,000,000 for Argentine; As ono authority observes, "the immediate course of markets must bo determined mainly by the nature of the borrowing. Consolidation of floating loans is comparatively unimportant: fresh borrowing for new enterprises-is of the greatest importance. Capital taken off the market for tho first time in loans aud put into reproductive trade or unproductive armaments, must diminish.. tho supplies ef money and tend to raise discount rates and lower the prices of securities." DEMAND FOR CAPITAL. The demand for capital supplies is pouring iv from all quarters of the world, and appears to be quite insatiable. You will appreciate tho immensity of the •rush when I tell you that the applications dealt with in the London market during tho first two months of the current year amounted to nearly 72£ millions, being nearly double the amount dealt with during the corresponding periods of the three preceding years. Such an enormous turnover must, if continued, sooner or later exhaust the supplies and lead to an enhancement of money values.

Writing recently on the subject of London capital applications, a financial authority remarked: — . "Although- conditions have encouraged an abnormal output of prospectuses, underwriters have not been altogether revelling in easily-earned commissions, for in many cases they havo been left with a iarge amount of stock. Still, the market has shown a wonderful absorbing capacity, and new issue quotations at the present time, although in many cases favouring the public to a small extent, havo not prevented underwriters from disposing of their obligations on remunerative terms. .... While new issues continue to be absorbed by the public. . . . underwriters can reap profits the quickness of wliich compensates for the loss of a portion of their commission, and enables them at the samo time to keep the underwriting market open for, new securities. But the public's absorbing Power is not nnlimited, and new applications at the rate of 100 millions a quarter cannot continue for long without affecting alike the markets for both hew and existing securities.

STATE OF TRADE. The condition of trade is, of;couxse, a* important element in forecasting the future of the money market. For the P 3s * four years, trade has been active and money has been dear, but the boom "» trade seems to have ended, and slackness may now prevail for some time. Some of fhe relief of the monetary tension which has been experienced has been a consequence of this. }ne British Chancellor however, stated a few weeks ago that he did not anticipate any serious set-back in trade, ana while the phenomenal activity of 191J was not likely to be repeated, he expected __*,£_£ r _f 1914 to

be up to the average. It will not bo safe, therefore at present, to count upon a prolonged period of cheap money. Locally, there is a tendency towards ease, but it is not at present pronounced, and no reduction of the ruling rates for accommodation is, in the meantime, likely. We have also to bear in mind that the gold production of tho world exhibits a shrinking tendency. The labour troubles in the Transvaal and the war in Mexico will lead to a restricted output in those countries. Tho following table is a summary of the production for the past seven years:—

_ 1913 92.662.534 The total production for 1913 shows a decline of £2 204,119, or 2.3 per cent. The Transvaal, which contributes more than one-third of the whole world's' supply, appears to have readied its maximum capacity as to output, and there is no other known field at the present time oireriug prospects of substantially improved yields. If tho production of tho precious metal continues to decrease, it must ultimately have an adverso effect on tho prices of commodities. THE GOLD OUTPUT. Some authorities hold that a reduction in the gold output of tho world would not bo an altogether unmixed evil. They consider that the rise the price of commodities that has taken place during *ho last decade has been brought about by the concurrent large growth in the world's gold production. 1 cannot, however, myself see that tho whole responsibility for hardened prices can bo laid at the door of gold production. It probably has had some influence in the matter, but the principal reasons for the increase must, I think, be sought for in other directions. The main factor, it seems to mc, has been that of supply and demand following upon the higher standard.of living that has gradually come into vogue during the last tweny years—the period throughout which the appreciation of values has been most marked. Popular tion is increasing, and the producing section of the community is not increasing correspondingly, either in numbers, or volume of output. The producers are clamouring for, and obtaining, higher pay and shorter hours of labour, which means that the product of their toil can be sold in the world's markets only at a price proportionately in advance of that at which it could be sold when the cost of production was less. Thus, every advantage that labour secures in its struggle for improvement of its conditions is won at the expense of tho community as a whole. The cop- j sumer must, in the end, pay for the cost of producing the articles consumed, and hence, in large measure, the increased cost of living, of which in these days we hear so much. | TRADE OF THE WORLD. lAs I have already remarked, I the boom in trade seems to ■ have ended. Thero is evidence furnished by nearly every commercial centre in the world that trade is less active than it was. Some incline to the view that a period of depression is sotting in. Last year was a record year for British trade, the combined importa and exports amounting to the colossal sum of £1,404,151,000. Eight years ago, viz., .in I_o6, the aggregate was only £1,068,565,000. Tha increase to last year's figures represents a growth of 31.40 per cent, during the period. Most, if not all, of the leading countries in the world enjoyed extreme prosperity throughout 1913. That/condition, however, appears to exist no longer. There are, moreover, at the moment quite a number of "'lame ducks." The Balkan States and Turkey are suffering from the effects of the recent war; Mexico is, as I have already observed, the victim of anarchy; and. China has been in financial straits for some considerable time. Brazil is also in a bad way, owing mainly to the collapse of the rubber market. The purchasing power of the peoples in theso countries aro, as a result, very much restricted, and trade suffers in consequence. \ NEW ZEALAND TRADE. So far as this Dominion is concerned, trade is satisfactory. Our exports for the year ended 31st March last attained a record level. A comparison of the values of the principal products exported jduring the past two years shows as under:-----1913-1914 1912-1913.

The past year shows an increase of £920,9f?t. or 4.3 per cent., as compared with 1912-13. which year exhibited an increase of over £3,500,000 as compared with 1911-12. Tho increases for the past year are derived! mainly from dairy produce and frozen meat. Wool.—For tho year, there is a shrinkage in tho value of the wool exported amounting to £481,882, and tho quantity is also less, the total being 182 : 85i;0961b against 195,782,5431b Here ngain, it is well to bear in mind that the recent strike dislocated trade, and, furthermore, wet weather delayed shearing. On the larger number of sheep in tho Dominion last year, as compared with the previous year, it is reasonable to expect a bigger clip, aud when the produce year closes this deficiency will have been more than recovered. The wool market is in a very healthy condition, prices are high, and tbe demand is active. Australasia has not as vet felt much benefit from the free admission of raw wool into the United States, because the American .manufacturers have been oblitred to adjust their affairs to suit the changed conditions. No doubt American competition will presently make iteelf felt in this market. Frozen Meat.—For the year ended 3lst March last thero was a very substantial expansion in the exports of frozen meat, especially in mutton and lamb. Compared'with the previous year, the increases were as follows: — Lamb .. -723,603 M-iton .. 371,926 Beef .- 122.23S -1,217,766 I am inclined to think that the increase in mutton and lamb is exceptional, aud that next year will show a fall. Statistics seem to support this expectation, as a consideration of the figures of tho past fow years will show. Thus: —

1314 .. 6,376,215 — Thus for 1911 the exports totalled 5,917,704 carcases, while tho sheep returns for 1910 showed that our flocks numbered 24,269.620. There .was a shrinkage in tho exports _ the following year, for the isfceen returns were smaller. In 1913 and 1914 there are increases in exports; and for the past year the total is large, while the number of sheep last year, though larger than in 1912, is less than the figures for 1910. It appears, therefore, that there has been this year an excessive export of mutton and lamb. Accordingly, it is probable that the sheep returns will disclose a. shrinkage

in the flocks. If this be correct, a drop may be expected in tho volume of next year's exports. The flocks of the Dominion are practically stationary. Any increaso is quickly sent to the freezer. A great deal of perturbation has been occasioned by the persistent rumours that the Americau Beef Trust has secured a footing in this Dominion. It is well-known that two powerful American firms, associated with the recently disolved organisation known as the National Packing Company, have been operating in New Zealand. These corporations command immense financial resources, and while they confine themselves to buying meat for. export in tho usual way. their advent in the Dominion will not occasion us any concern. Should they seek to extend their operations and to secure a monopoly of the meat trade here, there is no donbt the New Zealand Government would take the matter in hand, and, if necessary, legislate to prevent a repetition in this Dominion of the_ tactics which the combination is understood to havo pursued elsewhere. lhe matter may be left with confidence in the hands of the Government, who, there is reason to think, are keeping a watchful eye on the movements of the companies' representatives. Dairy Produce.—Tho export* of butter and cheeso, tho latter particularly, show a very gratifyng expansion. The" quantities exported during each ot the past seven years compare as under: Year ended Butter. - Cheese.

The exports of cheese have more than doubled in five years, and there is a satisfactory increase in butter. The Eroduction of cheese has been stimuited by the excellent prices ruling. The defect of last season s shipments is said to have been that too much moisture had been left in it. Thia is a blemish which manufacturers can easily remove. The limit of expansion in tho dairy industry is not. in sight, and whilo prices remain good, growth will bo certain. The opening of the Panama Canal, the reduction in the American tariff, and the revision of the American currency laws, will combine to encourage trade between Australasia and the United States. There will be many difficulties to be faced in pioneering the exports of New Zealand butter, cheese, and frozen meat to America, but theso will disappear as our products become better known. Growth in the trade is obviously anticipated, as larger and swifter vessels are to be placed shortly on both the Vancouver and bun Francisco routes. A direct service has also been established between Australasia and New York, via Cape Horn.

THE APPRECIATION OF LAND VALUES.

Apropos of our extending markets. I would say that it is to be hoped that shippers will be punctilious as regards the character of tbe produce sent forward, and that tbe Government mspecTrlrs and craders will be rigorous in ; then* r-Sufrements, so that, the New Zealand output may be maintained at a hgh standard, thus earning a popularity that may be woU deserved, and Sing consequent demand of n ready and remunerative market. It « in this away alone that a satisfactory _d permanent trade can be developed. The Stance of this question, from __*_&.-12 X DomiA *— "™*fXKft S-_f-«. The subject is one v im _ practicable, to iv °. h J.figures v--" f n rS l °&_-dlo £? .indicate have been x^^u^ teT allowing for ! that, as a "*£*** ident _ to variations necessaniyj-*- k_ d ! local oonditioMto^"Lars has valu_dux^tl*fll^ tw bee „ b_n obtained

ct F«r example: TaHng tho dairying in> jS. S was in its infancy in SfPietnd tblt land in favoured d* S W Sh _189_ could have been _"%•■ It from £5 to £15 per acre, is io? __c__2l _ » wrresponding ratio, S__ g a _ySoiit 130 per cent, more to-1 c „„ in cost of production or decrease in s_e price oi tuo product, aad as tto oostof production does not.seem Ukeiy SS but rather to increase, no effoTSuid be spared to maintain the excellence of the product, so that a P«ces may not cocur as a result or deterioration in quality. Theincrement in the value of sheep lands has, generally speaking, not been seT heavy proportionately as that of Roughly, the value of such fand has about 'doubled during the twenty years, but the better average SrSgnw, and tbe improved JrSp-Srfthe wool industry, quite lustify the increase; and sneep-rarmers working under normal conditions, have earned in recent years a better Teturn on their invested capital than they were ob::<i'*ing a decade or moro ago. With a ***iew to arriving at an ap-rn-oximate idea of the extent of the n_grega„ appreciation in value tap* haa taken place in the country lands of the Dominion, I have taken out the capital valuations of county lands at •1 1904, and 1913. They show tho following comparisons*— - « _«,,____ 46,561,340 j9o4__ North I«T_d €6.963,046 South Is*-* 61,996,166 £"£ c * lS *' 121,9€_,"153 42.1_ p.c 1918— _ Nor-Isl'd 131,00,439 South Island 87,239,539 Inereaee. 7Sasp.c The greater pari of the growth has, it will he observed, taken place in tct North Island. The appreciation there between 1891 and 1904 was equal to 70.58 per cent., and between 1904 and 1913, to 95.67 per cent. In the South Island, the increaso at the two periods was 18.11 per cent", and 58.62 per cent, respectively. The percentage of increase for both Islands combined is, aa mentioned, 42.12 between 1891 and 1904, and 78.96 between 1904 and lb. The actual values of tbe county lands in the North and South Islands combined are, as I have quoted:— In I8S"1" .. - 50.818,167 In 1904 .. -. 121,966,152 In 1213 .. .. _16,2£2,038 Including boroughs and town districts, the totals are: — _ In IS3I ' -r „ 1_2.225,0_ In 19<H _. .. 162,796,241 In 1913 :;. .. 340,559,7_ Much of the increase is due to actual outlay ou improvements—clearing, sowing, fencing, building, etc. —but the i-ijor portion is increase brought about by settlement, and the higher yield resulting from improved methods of working and better prices. Clearly the values of land—dairying land especially—are adjusting- themselves at 6uch a level as leaves no room for the '■slipshod" farmer. If the industry is to continue payable, with land at such high values, scientific principles must be followed and the most approved

methods adopted, in order that the very best returns on the labour ana capital -err-p'ovcd may bo realised.

DEED OF SETTLEMENT

It is proposed to have the Deed of Settlement of tho Bank amended so as to make it conform textually to all the changes that havo been b/ought abouby statute, and you will at a later meeting, be asked to formally adopt the amended d?ed by special resolution passod in terms of clauses 84 and So of the existing deed. Opportunity will, at the same time, bo taken to embody in the deed a provision to carry into effect the understanding arrived at last year, between the Board and the.Shareholders' Committee, in regard to the proprietors' rights of speech at general meetings. We hope to havo all this arranged in time to have the necessary resolutions passed at the next half-year general meeting, in December, of which due notice will be given. It is proposed also to have the various statutes affecting tho Bank reprinted in such form as will show at a glanco those portions which havo becomo obsoleto and those which still remain operative. By tills means, tho legislation and Deed of Settlement of tho "Bank will be brought up to date, and be made available in a convenient form. In duo course, shareholders will receive further advice on tiie subject. I now formally move tho adoption of tho report and balance-sheet. MR WATSON'S REMARKS. Mr William Watson said:—According to our usual custom,,it dovolves upon mc, as the director appointed by the ordinary shareholders, and duo to retiro at 31st March next, to second tho motion for the adoption of the report and balance*sheet, which I have much pleasure in doing. Regarding tho affairs of tho Bank, the speech of the chairman, which indeed may be termed that of the Board, has been most explicit, and I can only add to it that the business continues to bo sound and prosperous. It has been remarked in some quarters that Bank dividends havo been high of late years, and various economic suggestions have been put forward by those who havo overlooked tho fact that reserve funds, built up in times of little or no dividends, and from premiums on shares, help largely to earn profits. This applies specially to the Bank of New Zealand. I shall again stand for re-election to the Board at the "half-yearly meeting in December next, when I.shall have completed twenty years' service as a director, and I trust that tho confidence placed in mo hitherto will not be diminished on that occasion. THE DISCUSSION. Mr J. Mill said that in looking over the balance-sheet he observed that the directors had only placed £175,000 to the reserve. After hearing the chairman's explanation ho had altered his views on various matters pertaining thereto, but ho was surprised to 6ce that in years gone by, when they did not transact tne amount of business thoy did now, tho directors/ saw their way to place to the reservo fund £200,000. If they went back to 1908— a much leaner year—they would find that they placed £200.000 to the reserve and the same amount in 1909. Now they only placed £175,000 there. Ho supposed that tho explanation tho directors would offer was that the bank was now opening out new branches which would entail a good deal of expense. They were somewhat disappointed that no allusion had been made to the business transacted by Parliament last session. They, as shareholders, thought that they had a perfect right to have one or moro members on the Board, seeing that they had such larce interests. It appeared, however, that there, was no chance of the shareholders getting any further assistance for some time to come. When the Government assisted the bank originally the shareholders, he declared, did not hand over the reserve funds or the goodwill of the bank. They said now that these belonged to the shareholders and they would never let them out of their clutches, come what may. Regarding the issue of new capital, he said ho thought the directors ought to have given them the shares without loading them down to the extent of £3 6s Bd. and he expressed the hope that shareholders wouidvet.be conceded that right, also that in any further alterations made the shareholders would be given amnle notice in order that they micht consider them thoroughly. Dr. O. Prendergast Knight said that as chairman of shareholders, he thought the > shareholders were very well' satisfied. Although they had to pay £3 6s 8d they would get double that amount back again. On behalf of the shareholders he congratulated the new members of the Board on their anointment.

Mr Martin Kennedy remarked that he quite accepted as fa*ir what had been said about Mr W. Milne—that he had rendered good service to the bank—but he wished to point out that in the first place tho Board was constituted four years before Mr Milne came on to it. It would not be right even in a broad sense to admit that because a man rendered tho best of his services and retired the bank would suffer by reason of such retirement. Ho ti*as quite prepared to say that Mr Kane would render as much service to the Board as Mr Milne could have rendered. While he disagreed with the disparaging of tho Government nominees on tho Board, he was propared to say that when a change was made it was made with great discrimination. He was only doing his duty m assuring the shareholders that the bank would not suffer by the change. Tho Hon. T. Fergus (Dunedin) thanked the speakers for tho kind references to himself and Mr Kane, as 'newly-appointed directors of the bank. They both believed that their presence on tho Board was not at all necessary for tho' success of the bank, for tho bank was bound to go on and prosper. Mr Michie had written to him from London stating that tho bank was destined to become one of the greatest banks in the world, and he had made this statement with a thorough knowledge of what he was talking about. As far as Mr Milne was concerned, ho (Mr Fergus) had.always had the kindliest feelings towards Mm, for Mr Milno had always had tho interests of tho bank at heart. •

The chairman, in replying, said that as far as the amount put to the reserve fund was concerned, they had to be guided year after year by the earnings of the bank. There were certain conditions arising from time to time which varied the profits.. On one or two occasions they had put as much as £200.000 aside, but in these cases there had been exceptionally abnormal conditions obtaining. In putting to the reserve the sum of £175,000, he felt sure they had done something of which they might well be proud. There was hardly any other bank in Australasia which had been able to put such an amount aside. With regard to the earnings of the bank, their profits wero affected by the increased expenses and the ratio of expenses to their profits was increasing all tho time. They had to consider the staff and pay hirher salaries, for in doing so they wero only following the example of banks all over the"' world. It was their desire and object to have a complete chain of banks through the North and South Islands, so that when a district was | opened up the Bank of New Zealand I would bo there to help in assisting industries and get a share of the bank business... Touching on what had been done by Parliament last session, the chairman stated that no gentleman had put up a harder fight than Dr. Prendorgast Knight. Their representative had fought to the last ditch, and if they did not get all they wanted they had nevertheless made a very good compact. He ouite agreed with Mr Michie when he said that the bank was one of the strongest in the British Empire, and it would have been most calamitous if they had cut out tho Government. "I would strongly recommend the shareholders in the bank not to part with their holdings." said the chairman in conclusion. "They are some, of the best holdings they can get at tho present time."

The renort and balance-sheet were adopted without further discussion.

Dr. Knight, in moving, a vote" ~ of thanks to the chairman and directors, said they' could not expect any Government to itself to" such an action as would .oo reprobated in a priyato individual. Ho eulogised tho services of tho chairman and Mr Michie, the bank's representative in London, remarking that the latter was thoroughly au fait with the affairs of tho bank and, in addition, he had taken a splendid position in the world of finance.

The motion was carried unanimously.

The chairmau, in returning thanks, said that in their directors they had. a very fine body of men, and the present tiroceedings came as a pleasant contrast to tho abrupt way they had terminated their meeting last year. He moved a vote of thanks to tho general manager and staff, which was carried with applause, and which was briefly acknowledged by Mr W. Callender, the general manager.

Capital. Raserve. 37,500 ■ _'■ preference shares issued to tbo Crown, fully paid up __0,000 £125,000 68,659 - ordinary shares, fully paid up .. 391,060 195,520 14,820 do. shares, partly, paid, up . .. .. 19,532 9,766 Total received ... £660,592 £330,296

- £ S/lfl914 New South Wales 8,000,000 4 9€ 10/1/19K Saa_-tchew»_ 1,000,000 4} 96J 21/1/1914 Victoria — 1,000.000 4 87 30/1/1914 West Australia- 2,000,000 4 98J 2/2/1914 Kew Zealand .. 4.500,000 4 100J 3*2/1914 South Australia 2,000,000 4 100 13/2/1914 Union of S. Africa 4,000,000 4 98J */3/1914 Dom of Canada 5,0O0,C0O 4 99 20/3/1914 Tasmania .. 1.500,000 4 V3 ennsii Qnoensland '-- 2,000,000 4 99 13*3/1914 jf«„ South Wi__ 3,000,000 4 93 Some authorities hold the opinion

1911. 1912. " 1913. JC- _ United Kingdom 28,145,900 British Poa. ' eeseio&e 64,991,800' Foreign. Countries 100,618,700 45,335,300 35,931,200 72,642,400 76,137,200 92,872;300 . 84,448,600 -191,759,400 £210,850,000 £196,537,000

rear. 1907 1908 1909 1310 1911 1312 - .. 8"2,25?,89"*! .. 68,036,90.' .. 91,3&S,49G .. 90,842,730 .. 91,875,461 .. 91,866,653

Batter -. . .- 2,U0fll9 Cheeao .. .. 2,195,273 liccf .. .. •• 446,816 Mutton (carcase?) .. 1,872,054 Mutton (legs and pieces) 82,848 Lamb .. .. 2,548,914 Wheat .. .. 11,806 Oats .. ... .. 18,858 Potatoes .'. .« 7,016 Hemp .. - 678,835 Poultrv, Babbits, etc. 77,967 Tow ";. . .. .. 00,S28 Kauri -Gum .. .. 574,285 Grain and Pulso ... 80,737 Hops".. ..: .. 26,430 Hides .. .. 288,631 Skins ., ... 925,665 .allow .. ,. 701,085 Timber .. .. 319,652 Wool .. .. 7,581,063 Gold .i .. 1,462,338 2,056,615 1,859,179 324,578 1,500,728 43,522 1,825,842 95,414 408,830 150,601 - 483,853 60,851 41,005 430,200 162,872 20,698 234,735 860,782 672,849 * 475,820 8,065,945 1,305,217 „2,049,650 „1,128,686

STeaT ended Slat March. 1300 1910 1311 1912 1013 Exported. '. Carcases. „ 5,044,171 5,047,704 4,897,393 3,106,193 Total tmmber. of sbeep. 23,480,707 24,263,620 23,996,126 23,750,153 24491,610

Hat March. 1903 1909 1910 1911 1912 1913 1914 cwt. .. 271,323 .. 275,956 .. 321,975 .. S67.S49 .. 327,232 .. 369,133 .. 335,169 cwt. 0S2.673 310,085 441,884 456,371 463,610 634,173 742,371