BANK OF NEW ZEALAND.

Press, Volume LI, Issue 15453, 4 December 1915, Page 8

BANK OF NEW ZEALAND.

» HALF-YEARLY MEETING REVIEW BY THE CHAIRMAN OF DIRECTORS. REMARKS ON AVAR FINANCE. THE NEED TOR ECONOMY. LARGE VOTE TO AYOUNDED SOLDIERS' FUND. (rr.£SS ASSOCIATION TELEGRAM.} "WELLINGTON, December !!. Tho hall-yearly general meeting oi shareholders ef the Hank oi New Zealand was li<-!d today, the chairman of directors, Mr Harold Beaucbamn, presiding. THE CHAIRMAN'S ADDRESS. Mr Bcauehanip, in addressing tho shareholders, dealt with tho financial and industrial situations creatcd by the war. He said :—■ "'All tho circumstance-, seem now to point to the, conclusion that tho war is to be a war of exhaustion, and that Tictory ultimately will be on tho side of tho combination j>ojses.= ing the greater capacity for endurance. The financial might oi Britain has been a theme of constant. encouragement and confidence, when wo have speculated upon the final issue of the war. A TEST OF ENDURANCE. ••Most ol us recognise that, in a te.-t of endurance, the side which controls the. longest purse is in a position of immense superiority. But wo must not close our eyes to the fact that a measure of advantage will also lie on tho side which, by rigid economy and caution in both private aud public, expenditure, maintains itself in a position to support its people and prosecute tho war at a substantially lower cost than its enemies. Tho application of tho old adage, "a penny t>aved us a penny gained,' becomes at once apparent, and it. is quite possible by tho excreiso of extreme care in tho private and national outlay, that our enemies may in great, measure counterbalance) tho Miperiority wo possess in the way of moro amplo financial resources. In This respect, Germany, particularly, bon gro mal gre, has been forced to economise, through tho. cffectivo blockade of her ports by our Navy.

TAKING STOCK. "Whilo our enemies themselves havo admitted the serious handicap under which they labour—that is, viewing their position from tho financial standpoint—and whilo wo freely recognise Britain's prc-cmincnco and Tast. financial resources, it will nevertheless be prudent that each constituent part of the Empiro should take stock of tho position, for it is to bo feared that an overweening confidenco in our financial supremacy may encourage, nay, :s encouraging, a. recklessness and prodigality in expenditure which may, if not cheeked, expose the Allies to a risk of-that first exhaustion -which is to bo the determining factor in tho struggle. "I hopo I shall not be classed as pessimistic or unpatriotic, for J assure you I am neither tho one nor the, other; but I am persuaded that, at the present juncture, tho greatest optimist and tho truest patriot is ono who proclaims, in no uncertain tones, tho supremo importance of tho utmost caro in tho conservation of tho national resources. Unless tho source of supply Is limitless, it is plain that it is only a question of time, and of rate of outlay, when tho end of even the most ample resources must be rcached. This obvious fact is tho one which, at the prc- . sent time, tho British Empiro stands most in need of realising. ENORMOUS COST. "Owing to tho segregation of tho Allies, and tho distances which separate tho component parts of our own farflung Empire, tho cost of marshalling tho Allies' forces, and placing them at the points where they arc required to engage in hostilities, is in itself enormous. This is an expense from which our enemies arc almost entirely free. Tho contiguity and compactness of their territories, and tho completeness of- their strategic lines y of railways, cnablo them to movo their forces in-largo numbers with great facility and at a minimum of expense. Therein our enemies havo a decided advantage over us. But these arc not the only advantages they enjoy, for we havo to admit that our entiro outlay is on a vastly moro costly scale than theirs. Our soldiers are bettor paid, bettor clothcd, batter fed, and better cared for. This superiority of conditions, though most commendable, is purchased at a very great pricc. Again, instead of being, as our enemies largely arc, telf-con-tained and self-dependent, producing within our own borders the greater part of what wo require for our support and for tho prosecution of the war, and discharging our internal obligations by means of a. paper currency, wo are. drawing supplies, civil and military, from almost, every quarter of tho globe, and paying our debts in coin. This, of course, involves us in enormous additional expense, for the price demanded by the foreign manufacturer or producer has to bo paid in gold, and transit charges added. Generally, therefore, it is a case of making war on a basis that is calculated to strain our financial resources to the •uttermost. ALLIES' RESOURCES GREATER. "This cursory review of the position will readily convince even the most superficial thinker that the outgo of the Allies for war purposes must bo enormously in excess of that of their enemies. It would bo well that we should all keep this substantial disadvantage to ourselves prominently in view, because, if victory is to crown the arms of the side which can tho longer endure tho process of exhaustion, it is obviously desirable that we, who, in the matter of expenditure, are so unfavourably placed as compared with our enemies, should economise and husband our resources in every possible direction. Our foes are, I am sure, keenly alive to this, and they are consequently wielding tho economic weapon with the same skill and intensity of purpose as they handle their actual inmlemenis of W3r. Thev *r» •living' as well a> 'fighting' thV liattle. Tho civil population, as well ai the militAU.., aiv perfonnin;; their

ptvh pecular part—spinning out the thread of the national resources to the last, finest, strand and to the utmost possible limit. It can only bo by tho exercise of an overwhelming determination to continue.fho struggle to the utmost extent of human and economic endurance that they have been ablo to thus far prolong the conflict.

LTF£ WITH*THE ENEMY. the Austro-German confederate states must, at tho present time, bfj anything but pleasant. The truth, under such jealously guarded censorship as prevails in Germany, is difficult to jjcfc at, but information which leaks out from time to time gives a sufficient index to the true position. The iron ring of tho British Fleet has closed in upon the friemy's seas, and his external supplies have dwindled practically to the vanishing point. Having failed on his military fronts and feeling tho unsupportable pressure of his internal necessities, our foe is now engaged, with th" assistance of Bulgaria, in an endeavour tn force a passage througi. Serbia to Constatinople with the object of opening up a channel of supph through Asia Minor. Tho Allies art evidently alive to this, and are bent upon frustrating his design. Nevertheless, assuming that the effort is, we hope, doomed to failure, it has been shown that Austro-Gcriuany's interna national resources aro s.o considerable and the capacity of her people for endurance and sell'-sacritice in what the.v conceive to be the interests of their Fatherland eo great, that, it is impos siblo to predict tho length to whic. their ingenuity aud devotion may enable them to protract hostilities. It behoves us, therefore, to facc our owi: economic problems in tho spirit in which they confront theirs, and io set our own affairs in the hest possibb order with the least, possible delay. THE EMPIRE'S RESOURCES. |Tf the resources of the Empire are to bo[conserved to tho extent necessary io enable them to meet the demands that will in all probability be. made upon thorn before this Mar is brought to the conclusion that tho interests of humanity and freedom necessitate, the civil population of the Empire will have to do their part bv instituting a'regime of murli sterne r personal economy and a wider range of personal industry than JiaAe so far been practiced. This point wii; stressed by the British Prime Minister in an address at the Guildhall delivered on Juno I'Oth last. 1 give you his own words:— " "There remains only one course which

can be adopted without, adding to tho necessary destruction and dislocation caused by the war, a permanent source of impoverishment, of (hi.-, country. Wlm is that course:-' It is one, we. havn como" here, to advoeato and to prejjs upon our fellow countrymen—to diminish our expenditure and to incrcaso our savings. I put before you two]very simple propositions. The f'irot, is tjiis: If you save more you can lend to tile State more, and tho nation will be iroportionately enabled to pay for the war out of its own pocket; and the sccond proposition, equally simple, and equally true, is this: If vou spend less you cither reduce the cost and volumo of our imports or you leave a,' larger volume of commodities availably for export. The state of the trade balanco between our/selves and other countries at this moment affords ground, I do not say for anxiety, but for serious thought. If you look at the Board of Trade return for.tho first five months at tho end of May of the present year you will find, as compared with the corresponding period of last, year, that our imports havn increased by thirty-live and a half mil ions, whilo our exports and re-cx-por s have decreased by sevonty-threo and three-quarter millions. "What.docs

that mean? It, means a total addition in ive" months to our indebtedness to otli:r countries of nearly ono hundred anc ten millions. And if that rate was to continue-until wo .reached the end of a completed year, tho indebtedness would rise to over two hundred and sixty millions. That is a serious problem, and T want to ask you and those outside, bow can that tendency be counteracted? Tbo answer is a very simple one —;by reducing all unnecessary expenditure, first of imported goods. . . . That would mean wo should have to buy less from abroad.' "In the directions mentioned near'y everyone con afford help, and those who act on the suggestiou will be, rendering to the Empiro a tervico second only, in importance, to that given by . those who offer themselves for tiie war and take their places on the battlefield." SUPPLIES FROM WITHOUT. "Hitherto supplies have been largely drawn from outside —particularly from tho United States of America—but while outsido supplies may have '.>ccn right enough at the commencement of tho war pending organisation of our own productive capacities, it would be suicidal to go on relying unou them, because it is patent that they may, in the. event, of the war being much further prolonged, bo closed to us by our inability te pay for what- wo require. Therefore we should increasingly make it our aim to produce as far as practicable within the Empire's own borders all that is nccessaty to satisfy its needs. THE AMERICAN EXCHANGE. "Many of you will doubtless have noticed in the Press within the few months references from time to time in regard t<> tfic abnormal state of the exchange between Great Britain and tho United States of America. iSome of you. who may have had business dealings with America, havo had .the .significance of the exchange brought home to you very forcibly, by your personal expcricnco in discovering that, your British pound has been converted into a-much smaller number of American dollars than has ever before been tho ease. At one time the rato fell as low jis 1.18 dollars per pound, as against the par of exchange -1.567 dollars. This is equivalent to » loss ;n British monev of £<" ISs -Id llT 1 " cent., so that for every £100 paid by Great, Britain at that, time for American goods she was receiving goods to tho value of only £92 Is Sd. If. therefore, with the exchange market in such a position, she had bought £100.000,OlX) of American goods, she would have lost roughly about £8,000,000 through the transaction, in consequence of the adverse state of tExchange. This unfavourable position was created through the necessity that arose tor Britain to place, such enormous orders for munitions .and goods with America." There was no immediate, prospect of the huge balance in favour ot America being adjusted, either by exports to America (these, having shrunken to small figures since tho commencement of the war*, or by a settlement in coin, which would have been disadvantageous to both countries, if not. altogether impracticable, and the exchange rato fell persistently until it rcached tho | ruinous level I have mentioned. An Anglo-French Commission visited America with a view to discussing remedial measures, and it was finally arranged that Britain and Franco should raise a joint loan in New York for as largo an amount as possible. A billion dollars was talked of in the, first place, but the amount was ultimately fixed at oOO.OOO.OCX> dollars (about £100.000,000 sterling). Tho issue wa* mado in 5 per cent, notes of £98, having a currency of five years, with an option of conversion at maturity into 15-25 year per cent, bonds. The whole loan was underwritten by a New York syndicate at £96. The terms are sufficiently onerous, the cost to the borrowers being, at £&rt. about £-3 19s per cent., and at £9.S about £5 9s 3d per cent. The effect- of the raising of the loan has heen to improve the exchange rate somewhat. It. stood on the 20th ultimo at. 1.691 dols, but. unless the Empire < an reduce her demands for American supplies by increasing her «un internal productiveness, it is almost, certain to icvcdc again be-fore long, and tho Ikt-

rowing operation will in that ease haTe to be repeated, probably upon oven more disadrnntapjeous tortus than those exacted in this instance. 9 THE NEED FOR PRODUCTION. "This contingency will stress -what I have already mentioned with regard to the need for production, within our own border?, of all tho. essential? of national subsistence and munition supplies. It will further emphasise what I hav© said upon the subject- of economy in individual expenditure, for it is an indisputable fact that every purchase of American goods by New Zcalanders has pone to swell tho balancc of tho huge indebtednesn ot "London- to New York, and helped to intensify the exchange difficulty to whicli I have just referred. BRITAIN'S OUTLAY. "Britain's outlav connected vith tho war is, as already indicated, of a steadily increasing character. Commencing, at the beginning of the «ar, with about U7-"0,000 per clay it has now, the British Prime Minister informs us, reached the enormous total of £'0,000,000 per day, _ or, say, .CI ,52.j,000.(K30 ]>er annum. Of this, probably at least £1.000,000,000 per annum will have to bo raised by way of loan : and in addition to providing for her own outlay Britain has, to a la rye. extent, to linance the . requirements ot her Allies both in money and munitions. "in the early ttages of the war, Britain financed by the issue of Treasury bills by tender at varying rates, but, alj below 4 ]K'r cent. Her first etTfit to fund her war liabilities was mado in November, when the lij per cent, war loau of £300.000.0Q0 was issued at £90. This was equivalent to a borrowing at 4 per cent. The Treasury, shortly after the issue of the loan, discontinued the placing of Treasuary hills by tender and adopted the method of issuing tlu»m, as applied for, at fixed rates, viz.: -1. 3J, and 3} tor 3, G. and 0 months bills respectively. In June last tho 1} per cent, war loan (without, limit as to amount* was offered at par, and cash subscriptions of about £'050,000.000 wore received. Issues of Treasurv bills continue to bo made, and the rates are now fixed at o per cent, for all currencies.

THE NATIONAL DEBT. "In view of the present rate of expenditure, it. cannot be long before another Imperial war loan must be piaced on the market, and the increase of tho Treasury bill rate seems to indicate that, when that time, arrives, at least,'fj per cent, interest wilj have io .ho offered. In this connexion, it is interesting to note that, just prior to the commencement of the war, the British national debt amounted to £700,1-!/l. 110- On 31st March, I!Tj, it stood ;it £l,l(il,',)ol,702; and by the 31st March, 191(3, it is estimated that it. will have, reached Mic stupendous total of £2,200,000,(RM>. It is sad to think that such vast liabilities should have been incurred in a policy of destruction. IX THE DOMINION. "In this Dominion our Government is inflexible in its determination to assist the • Motherland to prosecute the war to a successful termination, and, with that, end in view, will, if nccessar.v, send every man of military ago and fitness to' the front. Recently here, as in the case of Australia, a war census has been taken, with the object of ascertaining how many men are still available for this purpose. ' far no difficulty has been experienced, under tbo voluntary system, in obtaining ample supplies of eligible men to make good tno wastage, that has occurrcd since the despatch of our Mam Expeditionary Forces. If, however, later on, there be any failure to respond to tho call of arms. I am satisfied that neither the Commonwealth nor the Dominion ' Government w ill hesitate to take such steps as will compel every man of military age to perform his duty to the Empire.

THE BANK'S PART. •"As far as our staff, including London, Australia, and Fiji, is concerned, everything possible is being done. Wo liavo at present lti-1 men on military service, and 100 who have volunteered anr] are waiting their turn to bo relieved. Thirteen of those gone to.tho, front have lost their lives, and twenty-two hovo been wounded. I am. suro you will join with rne in extending our heartfelt -sympathy to the relatives of . our gallant officers who havn fallen in defence of Kins and country. When all tho volunteers havo joined the fortes, our pay-sheet for men on active service will reach something like £20,000 per annum—in itself a very substantial contribution to tho "War Funds. THE OUTLOOK. "Turning now to matters of local concern, I'would remark tbat prospects continue good for all descriptions of the Dominion's primary products. A wider market for wool has been assured bv the conditional removal of the embargo placed, shortly after the opening of the war. on exports of wool to neutral countries. "Tho export of wool to certain neutral countries can now ho arranged upon compliance with such formalities as arc deemed necessary for tho purpose of assuring that the wool will not reach the hands of tho enemy. ( Tho cfiect of this has been to enlarge the area of competition, and to appreciably stimulate prices, more particularly for the class required by American buyers; that purchased on Bradford .account has not advanced. to a correspondingly high level. '"Tho arrangement, under . which the whole of the dominion's meat export is commandeered by the Government, still' continues in operation, and, 1 believe, ha« worked on the whole smoothly and quite satisfactorily. The aggregato payments made by the Imperial Government in this connexion and disbursed by tlio Dominion Government on its account, amount., up to 24th ultimo, to £5.91-1.tj"21. The pressure on storage space, and fho shortage 'of insulated stcymers to carry the, meat away, which were features of tho last season's export. are not likely to recur this year. Additional storage will bo available in t-no Dominion —the result of fresh constructions completed or in progress—in addition to which the prospective supply of carriers is said to be adequate. An analogous call has also been made upon the checso product of the country. the Government having, it is understood. Imperial orders to requisition lo,oflf> tons of cheese, 1 to tho valuo of about £1,000.000, in all. EXPORTS AND IMPORTS. ••The trade returns exhibit a marked fluctuation in favour of the Dominion. i"or tho year ended September UOth ls?t, the Exports v-cro .. £'29,710,000 aud tho Import-j .. 19,786,000 Surplus .. .. £!)>:! 1,000 "The figures compare as follows with those for the year ended 30th September, 1911:— x.. Exporta—September "oth, 1914.. C;j,75D,000 Export®—September UOtb, 1915 .. 29,710,000 Intrcos« .. £5,951,000 Imports—September ."O'.h, lfilf .. 21,057,000 Imports—September 20:1), 1315 .. 19,736,000 Pccroaie .. .. £1,271.000 "Together, the figures represent a net improvement during the year in tho Dominion's financial position of £"7.222,000. More than half of tho increased value of the exports is due to the higher values that have been ruling, and the rest represents increase in the guantitv exported. SATISFACTORY FIGURES. "These axo very satisfactory figures, but the growth, as . far as dependent upon increased value, is of course quite abnormal, and due to the exceptional conditions at present existing,' which will undoubtedly pass away upon termination of the war. or shortly thereafter. if should be hardly necessary for ni'" to niter a word of warning against the assumption of liabilities dfpcudcnt ioi then- satisfactory liq'tida-

tion upon maintenance, for any length of time, of the present high range of prices. It would be folly to assume for one moment that such abnormal prices eau continue, after tho present hugo expenditure of borrowed money incidental to the war conies to an end. Itisalmost certain that, immediately tho end of tho war is reached, prices will drop heavily, tho recoil may carry us to a point of depression as abnormal as that of the present inflation. It will be wise policy on tho part of everyone to keep tho probability of 'loan years' to come steadily in view. REVENUE AND EXPENDITURE. "The revenue of the Dominion is well maintained, and is exceeding tho estimate made by tho of Finance for Budget purposes, in which tho estimated revenue, for 1915-1916 was set down at £11.076,254, .as against actual revenue for 191-1-1 01 " £12.443,525. Tho actual revenue for the first _ seven months of the financial year, i.e., to 31st October last, was £6,099,40*-, which compares with £6.022,836 for tho corresponding period of 1914—a. surplus of £76,56 H. The estimated expenditure for 1915-16 is £12,653.242. which leaves a. deficiency on estimated revenue of £327.941. ' . . , ' "This is without making provision for war pensions, .and lor interest and sinking fund on war loans. The former are estimated at £1,000,000 per annum, and the latter at £700,000 per annum, but the. full amount will not fall to he provided during the current fiscal year. In view of the above, additional taxation has of couree become necessary. Increases in incomo tax, in stamp duties (including a mortgage tax of 5s per cent.) and in a few liues of Customs and Excise together with an increase in tho rates Of the Post and Telegraph, and Railway services, have accordingly been made, and these it. is believed will suffice to cover the extraordinary additional expenditure referred to, being estimated to produce- £2,032,(300 of extra revenueBANKS' TAXATION. "In this readjustment 9f taxation, necessitated by the financial situation resulting from the war, tho banks have, I think, come, in for more than their fair share of the additional impost. I may explain that banks aro assessed for income tax, not upon their actual earnings. but upon a hypothetical incomo based upon a percentage of their aggregate assets and liabilities within tho Dominion. This percentage was formerly 15s. but under tho recont Finance Act it has been increased to 30s per cent. Our hypothetical taxable income. has therefore, at, one stroke, been doubled. But this is not all. The tax wc have to pay has also been doubled. It was formerly Is Id in i the £ ; it is now 2s 8d in tho £. The practical effect, therefore, of these arrangements is, you will sec, that our income tax has been quadrupled, and that wc shall now have, to pay at the rate of 5s id wHere previously wc paid only Is 4d. "Hitherto our incomc tax has amounted to about £15,01>0 per annum. In future it will be about £62,000 per annum. Added to land tax and note tax our total contribution to the taxation of the country will reach probably about £120,000 per annum. We are not complaining. Tho Bank Is doing well, and, therefore, meantime, cheerfully shoulders the burden laid upon it. But wo feel it is an unduly oppressive burden oompared with that laid upon others, and we therefore Took forward to the time when some remission may be allowable. Tho anomalous position' is that, while it purports to bo an "income tax,' it is payable altogether independently of our actual income. It is quite conceivable that a Bank might t-ustain losses which would leave it practically without income for tome particular year, but- that would not relieve it of liability to par inorue tax under thii- asser-.-inent. Viewed from that standpoint. 1 think most people

•will regard tho of the tax as inequitable. However, as 1 bavo said, in existing circumstances, whilst we cam wo will cheerfully pay; but, under other conditions wc contend that Parliament, should, for tho purposo ot taxation, assess our profits upon a more liberal and equitable basis. THE DOMINION'S FINANCIAL POSITION. "The artificial prosperity, created here, as in the Old Country, by tho expenditure incident to the war. continues to ho reflected in. tho banking returns of tho Dominion. "Tho returns furnished to Government of quarterly averago banking figures at 30th September last, compare as follows with thoso for 30th September, 191-1: — Sept. 30,1914. Sept. 30,1315. Increase. £ £ .£ Interest bearing deposits .. 10,838,900 11,603,100 7SO/200 Non - interest boaring dcpo3ita .. 14,172,800 17,543,000 3,373,100 £25,001,700 £20,155,000 £4,133,;;00 Dccroase. Discounts .. 1,745,000 1,357,700 •- .".87,300 Other Adv'nc'e 22,717,600 21,301,200 726,100 .£24,462.600 £23,348,300 £ 1,113,700 "Thus represents an improvement of the position between tho public and the banks, amounting to upwards of £5,250,000 during the year. If. is safe to say that this is an unprecedented movement in tho banking experience of tho Dominion. Never before has tho public been in such an easy financial position or in command of such ample resources.

"The Po6t Office Savings Bank figures tell tho same story. For the vear ended September 30th last tbo Post, Office deposits amounted to £] 2,943.158, and withdrawals to £10,356,942, showing an excess of deposits over withdrawals of £2,586,516. The cxcess in the second half-year was considerably greater than that in the first, viz.:— Esceca. First half ended March 31, 1015 .. ],158,071 Sccoud half ended Sept. 30, 1015 .. 1,338,145 Excess for tbo year .. i'2,3SG,SIG "Tlie position in a measure indicates a slackening of industrial enterprise, and a heavy drop in imports—the latter being due to the inability of manufacturers in the United Kingdom to execute orders owing to shortage of labour, and to inadequate transit facilities. It is well, however, that our financial situation is so easy, for it places us in "a position to bear our share of the Avar expenditure—local and Imperial—without difficulty. ABNORMAL PROFITS. "The abnormal profits that arc being made by the producers of this country and others as the result of the war, should be freely placcd at the disposal of the Empire by subscription to war loans—or otherwise —in order that there may bo no lack of financial strength in pressing the war to a triumphant conclusion. There is. I am glad to say, evidence that our people as a wbole feel this and act accordingly. Th© large donations that have been made to war and benevolent funds testify td the public recognition of the obligation, and the recent success of the Government's local loan of £2,000.000, which was largely oversubscribed, furnishes strong additional testimony. We subscribed for and obtained a substantial amount of this loan. WAR FCNDS CONTRIBUTION. "In addition to the subscriptions it, has already given to the various patriotic funds, the Board has carefully debated the question of making a further substantial contribution io National War Fund for the relief oi wound**! soldiers raid their dependents. Wo have como to the conclusion that the Bank should make .ome such con-

tribution, but, before actually deciding to do so, wo have thought it fitting to refer to tho matter at this meeting -in order to ascertain whether our proposal is in harmony with, your views. The amount wo would propose is £10,000 and, unless an adverse resolution isproposed at this meeting and' commands substantial support from the proprietors, it is our intention "to vote that amount as a donation to, the National Fund, provided we are satisfied as to the manner in• which the 'Fund is to bo administered. Assuming that no general dissent is expressed, I think it should be clearly, understood that, if the necessity esist, tho Bank will not hesitate to make a further contribution'.to tho National Fund between this and.the date of our next .meeting —tho amount of such' further contribution to bo left in tho discretion of the Board. DEED OF SETTLEMENT. "Tho special general meeting called for the 22nd October last, for tho purpose of amending the Bank's Deed of Settlement so to bring it into'conformity with the Statutes affecting the Bank, was duly held. There was a good attendance of shareholders, aJid the resolution to effect tho necessary alterations was passed unanimously. As the resolution has to be confirmed at our-present meeting before it can be> copio operative,- it was <not thought necessary to circulate among shareholders a report of the proceedings of tho special meeting, which wcro purely formal. I mav state now, for tho purpose of placing the fact on in this address, which, according to cust-on:, will be circulated among shareholders, that in response to our request for proxies for use at the special general meeting, and at this meeting, in carrying the proposed amendments, vc havo received proxies from shareholders representing 73,32-1 shares, which clearly indicates the general approval with which the proposals aro viewed by the shareholders. BOARD OF DIRECTORS. ''The retiring director on this occasion is Mr 31 artin Kennedy. Air Kennedy gave due notice of - candidature for the scat becoming vacant, and. A3 he is the only candidate, I have pleasure in declaring him duly elected. I tako this opportunity to congratulate him upon tho attainment of his 'majority' as a director of the Bank, and to express to him, on your behalf and 'my own, the hope that he may oor.tinue in the enjoyment of good health and vigour to servo your interests as a director of the Bank for many years to come. Reference was made at one or two of our past meetings to tho service? rendered to the Bank by Mr John Murray, a former inspector aud general manager, and subsequently, for a short time, a director ol the Bank. J regret to say that he died on 30th June last. It is fitting that I should mention the fact, and place formally on record our recognition of his abilities and our appreciation ot tho work he performed for the Bank. Mr Murrav's distinguished services will never be" forgotten by those conncctcd with this institution. INTERIM DIVIDEND. "I have pleasure in informing you that the profits for tho half-year ended 30tn September last havo been- quite satisfatcory, and the Board havo felt fully justified in declaring the usual inter«ni dividend of 6 per cent, on the capital j paid up in respect of tho preference and ordinarv shares. The dividend will bo payable in Wellington tomorrow. 4th instant, and at branches on receipt of advice." MR KENNEDY'S REMARKS. Mr Martin Kennedy thanked the meeting for his re-election. The Board, he said, consisted of s:ix members, four of whom am appointed by tho New Zealand Government as representing the Dominion's interests in the eapital of the Bonk, and two elected by the holders of ordinary shares. In earlier yeari he tailed at-

. — , ' tention to tho anomaly of Govemmonl vj nominees taking • part in the iliacus— J sions, especially as neither they nor"|g tho Govermeut held any sharps in capital,of tho Bank. That;anomaly,"® if such it -wore, now ,no longer existed.-':® Tho • Government now held a substantial number of shares in the capital oiJ|| tho: Bank, and its nominees wpro notrfj debarredfrom holding sharos. The man had referred in appreciative terms || to tho services rehdored to the Bank by M tho lato Mr John Murray. Front own personal experience of him as director, and for thirty years previously# as a client of tho Bank when .ho'was®chief inspector, ho undeservedly ;on-» dorscd what tho chairman had said. £ Having regard to the part Mr Murnsjf|| played in tho resuscitation of Bank in 1894, his conduct 'was' .flSjljgpf public-spirited and' disinterested, ho subsequently stood apart from Mq.7 inrj any lucrative position in tho Bttlfr * which ho unquestionably might .4jßtj >»' 1 had if 60 minded. , .THo' and speedy recovery of the Ban*BjlP" { firmed Mr Murray's assuranco, the Government in 1894, that'^g^< Bant had an enormously valuable will. Mr Kennedy cohcludcd pressing his entire confidence< in' V' future of the Bank of New Zealandsg'v*,? at present constituted. The Baa**?*' 1 , position reflected crodit on tho maniߣj\y. ment. It also reflected crodit on Dominion, which camo to its rosette J# its time of need. / \&J} RESOLUTION CONFIRMED. Tho resolution amending the deed of settlement-was confirmed. , ; •»'( The proposal to'jjivo £10,000 to the*,-.; "Wounded Soldiers' Fund was approved.