BANK OF N.Z.

Press, Volume LXII, Issue 18722, 19 June 1926, Page 10

BANK OF N.Z.

ANNUAL MEETING. .

PROFIT. £912,160.

■ • (PBESS'iSSOCIATI&X XELEGKiU.) |4WEjiLINGTON, Jyne 18.'- : Sir George Elliot dealt with various items in the balance-sheet' (which has already been published). The capital account stood:— Preference capital- held by 4 j.the . -■" Government of New Zealand. v,; r 1,875,000 Ordinary share oapital '• "'.." • 3,750,000 ■''.'. t'-"' ''■""' *■'..' . v>5,625,0C0 The reserve''lurid- With ' the addi ; ' tions hows-recommended 'will' - •*■" amount to .. •• ... ' 2,520,00.0 and the disclosed undivided profits to .. •• . •• 565,378 These various items—Capital, reserve > fund, and undivided profits— tbtalv.. : .. .. •- In addition a there is ;the'4 per cent, guaranteed''stock which matures in July,' 1934, amounting to " •*.. .V ..' •• £529,988 Of the new shares isued,; 1233 were not taken up by shareholders-entitled I to them, and they were, therefore, submitted for sale by tender. They realised an average premium of a fraction under £.l 17s 6d per share, and the premiums.aggregated £2310 16s, the wholo of which, in,accordance with;the Bank's deed : of settlement, had . boen trans-ferred-to \the-'reserve fund. •■ -y . In addition to the £2310 16a referred to, a sum of £247,689. 4s was proposed, to be added to the.reserve fund. Of-' this amount'.. £ 147,689': 4s. was .taken from the ordinary banking .= profits. for the year, and £IOO,OOO from an internal reserve which had been .created;in previous years to provide'fbir''probable losses in transferring surplus:funds-that had!accumulated"in London. '■:■ ■■■••.■ ■. " The profit'earned' from the ordinary operations of the" Bank "amounted-.'to £912,100, ""an increase of : £92,87 : 5, mainly duo to" the'use of new: capital. The dividend for the .'year' would be'at tho.same rate as last year's, but, with-j out :making- any definite, promise, the directors'-hoEpid next.vycar to: bo in. a j positiori'to pay. a bonus" of l 1 per cent. on the preference '' B " .and shares.' •,••'. J ":. '.".,>'"... '■','.'-:.•"■ •-'■"'-■■ ''Tho profit-earning" power ' of ~ the Bank,," the chairman,added,/'has bopu. augmented;; by additions,.;to i the reserve fund which havo been, made during the last few years. Tlio dijec- j tors desire, however,, to warn shareholders against taking an pxaggeratpd View of this earning; power., It is ;l by no moans v certain.ithat ; the>.institution will do "as' well proportionately in .the future as -it-'.has-' done recent years, and in the distributions of profits the Board will most, certainly notVbe influenced by the .market value', of the shares. Further, it..is unlikely that. Bueh large: annual:: additions from;, ordinary profits' to'the Reserve"'fuVd, Will .icpn-tinue'-to'.bepossiblo.";:;: .'■.'; ,:•;., • Bef erring, to advances; -the chairman noted an increase of £2,048,411 iniad-vanees-and discounts, and indications pointed to the.probability of the BariK's being.called upon'for.i'exfcra assistance untir next season l'#pr()du«o'-'-returhs<.b:e----come available. Owing to the strong financiar position of tho Bank, its\rosources were ample to all demands likely to be made on. it. The chairman mentioned that 57 per cent, of tbo..ad- • -vancos- wc?e- for each. ".:. ;-'■':/. ".' " . •' " : ~.r ■ Gold Standard. -X'On the.;S'ubje'ct"of exchange andicurrency, the .'chairman- said, that .since}the reversion 1 to the gold' standard,- exchange difficulties in' New • Zealand had disappeared and primary producers had materially beneficed. The,price of: money would.continue to he largely..influenced by the rate of. money in notes'- w'erff:.to'.cease': to be legal tender in New Zealand, ■-.the Bank would." ..be obliged, to l make provision for ar.re.3netion of ! two 'ih'illipns in-its note-circula-tion, ie'cessitatiig' the realisation * ; 7of British Government securities importation, of two. million,' sovereigns. This would not affect t!«> Bank's profits, but would' mean a loss of revenue to?the Governmen Dealing with'the unsatisfactory figures of the' country's trade, the chairman said: Trade Balance. "Apart from this heavy adverse trade balance, it should be rmembered that about six millions a year must be;provided in London to v&y interest- on Government and local body loans raised there. These figures: necessity for economy .and prudence; on the part of the Government, local bodies, and tho public generaHy,:..but there is no cause for; serious alarm," as the country is well*, able to stand;: a period;of adversity. J.,."'"_;,;/' ', ■:-.■' ' '■ :! £■:■■'■ ; . & Now Zealand eold to • ■ .. :Xi tho United Kingdom V/:. produce to the value . . . ;—•' of :. 58,055,279' ; ■,■,:. and purchased' goods '' : -'"-."''.r.';' to tho value.of ' ;: .. :.. . .-•'' 27,050,108 Sold to ' other 'Bri-- •-,;■:: tish possessions : 8,601,023 and purchased :.••., 13,024,633 Sold,to.foreign coun- /;'■'.■ "h'. ' tries-' "',.-, ' - : r: 6,161,285 . _ andi purchased,.. . Vy. ■' ;j ;;-,',■ -12,951,Q60 Total exports for year. . \-■,... , .;.'■;; endingoMarch 31st '£48,G97;587 - ' ■'■;.'.'.• TotaMrnportsifor year •- - .:• "J,^,, ending : ManSh.' 3lßt, ~ „,. ■- JE03,Q2£,806 While the. surplus ■ in, the national , accounts was.a satisfactory, indicatoon ■ of prude*ceH in i the {conducts.of ::the country's finances", the burden of '■ .taxation was stiD very : severe. In,-this connexion the chairman, remarked upon the .competition : 'that' Bants have;. .to face from; Government' Departments, which pay only triflling taxation, or.'no taxation at all, in connexion .with .their activities. "For instance, the average amount of loans current in the Government Advances' Department for the year ended March 31st, .1925, was approximately The; income tax paid • by. the Department was , £4757, whereas, "on a similar amouhli: of advances, any Bank trading in the Dominion - would require to' pay income tax amounting to £70,875., _ Post Office Bank. Another instance : "The Post 6fn.ee>' Savings Bank: has deposits of over. £47,000,000, on which iio^income.tax. whatever is paid. , If any. joint Btock Bank had-such an amount on deposit, and lent itout, less a requisite, cash reserve, it would have to pay annually about; £300,000 -in.-.in-come tax alone. ' j "It is no argument to say- that it would merely be taking money; out of one Government pocket and putting it into another"' for the Post Office . Savings Bank to pay taxes-in-the same proportion as the joint stock Banks. That is hot the case; the real effect- would be that the Savings Bank would.have to pay its depositors alraost-iper cent, less interest' than it does at-present; or, looking at'the. matter from another point of view, by reason of the nonpayment of income tax, the Sayings Bank can afford to payl per cent, more for its deposits than a joint stock- ba.nk can afford. . _ "Probably nowhere else in the Engworld does a Government compete with the Banks on such, lines as in this country. The function, of a Government; Savings; Bank .is. to encourage thrift amongst, the .poorer classes of the- community by providinK undoubted security for the,investment of their savings.' In Great-Britain-no

depositor can pay in to the Post Office Savings Bank more than £SOO in aJiy oue year;. on which sum he is allowed interest at the rate of 2} per cent, per annum■'; in the-EPrt'ited States the limnof a deposit, account is 2500 dollars, and the rate oi'.interest' 2 per cent, per annum. In New Zealand tlio limitis £SOOO, and interest at the 4 per'cent; is. paid on tho first■ £oOO and 3i. per .cent, is paid'on the balance. If the Post Savings Bank deposits were. in ' the. hands of the Banks,; they would be omplbyed in the development of the nastbral, agricultural".' and? industrial interests; as', it is,'they are used by:tho Government, and 'are'diverted from ,the channels m wh'icb they ;cbuld "most usefully be employed..;. ' :.- ;: ; ; ;' -''"' . ■..' •■ . •■•e:'. ■ In'-.*l9ls.'.the' Post. Office. Savings _,■„._■ Bank-had-ondepbsit '. ■ >.■ 'S^ISG 3G5 >- ' .. .'.-. In'l9ls'-tho Joint. Stock Bank?.'. ■.-■;:-■. ■h. R d-.:on deposit .'• ■..;•• ■ •;• 3MM,603. ond, ; .in 1K!.":,.., ....,.-..• 49,502,199.. r "T-ii'ese'figures speak'.for! nndxomptetelyrdisproVe tl< allegation; of certain critics who declare thf. the, Government favours', the IJanKs. '; .... primary Producers. After' references .. to ■ : the position j regarding meatJreezjng.companies- and the 'finance of joint.stock companies —aheße-.'ace; reported m. another,col-..; umnVthc chairman outlined a new scheme of' long-dater loans ..decided upbh'byiho'Bank,.;and concluded:with some, remarks biv the outlook, coneernirig which he;said:—- - • . :■■■<■■ <■■ ■?'Although many :pf.our,pnmary,producers' have'had. an • unprofitable year,. mainly' owihg-.to ■ adverse weather cbnditions,, present prices for;, produce,- as ; a- nibQle, -"are. remunerative,to/farmers who:hold' the: land at, its vilue; :it:.:is:quite.-.a ! pose' that many'; farmers : in New Zea-. land are in difficulties—the' percentage: is by-no.;means largo. Unfortunately, however, '.hlany: of those who; are ..In. difficulties,-a;re returned : soldiers who' certainly deserve abetter fate. _ ■ --'Experience has shown that in some districts' land has been brought intouse that should. have' been' lef in its virgin state, .for its actual.value is less than ; the; cost, of the improvements, effected. .■-'...■'• "The' Minister for- Lands is dealing with',' the' position in regard to larid.' leased from 'Government, in a manner entirblyfarmer himself, his views,-which he makes known with refreshing freedom,., must-Scarry weight'..\yith farmers., .. '■'f-'During; the, past.;year there has.. : not been• mudji' dem'and;for farm land; ■. and np'tf. many, would-be biiyers'_ are .able to' pay. a /reasonable prppprtibn ,'.of ; pur-, chase money incash.' / .' .. ',' ..;:::;•''-•: ...:AvHard Winter.. '■.--.. '.'/ Except.: in ; a ;'few- ; districts, if- looks. as'if "the.;"country,were in.'for a.- hard, winter.■ V To'-, aggravate. matters, ..tho general:, strike iii < Great' Britain -will doubtless .'result'; in a' reduction of her purchasing power, which' must to some'; I extent aSffeet; the, prices:-of the .'seagoh's produce. ■ ',-.•.', ,'■'■■'•- .-"There is r ;unfortunately, in..-the Dominion ,'■ rather;,' a tendency to, take '.'a glo6my : yiehv .of- the situation, whenever ■ a' seUback-;'is,experienced,,... and. also" a tendency, ti; become. extravagant wh'en'-times and downs' are: inevitable—at,'is the; average that hasitoVibe-reckbned^W/ith.'-. ... \- : -. "Tb gauge, truly the conditions of any country, one must::talie -a .long period of time into consideration. In' the case of our. own .coufatfy,'looking back over the. years, one cannot but be deep.ly impressed with the steady march of progress , and prosperity; -■ Although for the; moment- that march has somewhat slackened,' there is hot the slightest' doubt that in 'the comparatively not distant future' it will be _ renewed and quickened .with fresh -life and vigour. . -. - ••' : . • ■•" " ■ -.-.-.". • ■'"l|t'me close.this survey,.with,".a, remiftder,- although;it.may be'.d'. repetition, bf what ;I have previously Said, that'as.we in-New Zealand depend on the Mother Country for so much .of our material- prosperity ,"-it isourbbunden dhty,- not -only; aS'.'-lpyril citizens of the Empire, .but in resolute' self-interest, to assist to our .r+tmbst the trade of Great', Britain- by": purchasirig —British fqods; in so doing-each individual.may elp, bo it.ever, so:little, :to. unite'and .strengthen the commercial bonds' .of Empire." '.. . ■ In seconding the motion for the adoption of the report' and "balancersheet, Mr Watson' referred to a- long past time when V amount of odium, was cast on■'■ the" directors and staffs of Banks owing.jo the losses made, wfth Nowadays-some critics -referred terms : 'tp the success of the: Banksi But while wage? •and 1 -' prices of .-most -other' services;bad risen very materially, the' public"'did not have to pay much more than .before the war for banking service. 1 .The strength of a Bank was to the benefit of its depositors in providing undoubted security for their deposits-; to borrowers in affording confidence aeainst pressure so long ■ as they fulfil their, obligations ; and to buyers of • exchange. in ; giving safety in the conduct of L lh.eir business. -,'._' ■ -■■:'■, ../:.■: Eesults of Sound Policy.,;' In seconding the motion for; tyhe; adoption of the report' and balancesheet. -Mr W. • Watson' Said:. "I "congratulate voubn the, position of the Bank, has been.fullv dealt; with '■' by '/the chairman.' The- excellence .of

tho. Bank's, staff of officers ill their various spheres warrants confidence as ■ to the continued progression of- the | institution/: Thirty-two years, .ago .a cohsider'ablo. aiiiqutit'of odium;.was.cast ] ou- tho .directors 'and:'the,;staff.:..of the' Bank owing, to j losses' mhde : -„-wifli : ;.cu>., tomeis. ' Enowihg how, times were then,;' I-did - not join: in ; the adverse criticism"- levelled'"against the .''previous directors ;;of the-'Bank of Neil Zealand; as was.evidenced 'by my twenty-one days''examination : \■, before the : Parliamentary 'Committee. After the removal of the' head office to Wellington, however, all available, -treasures were taken -to avoid ,a. .recurrence of past "misfortunes.' " F.or'! several years none .of \h& profits' were shareholders,, which body, did : npt then include■.:tho/Government,,and ; after-. I wards- only small; dividends were feaid,. until'.by- additions to reserv.es,,:. dus-| closed and internalj the-Bank; wasvin, a strong, position. Other:.banks;;adopted the"' same-•principle;, of:;, ahiassing ,; re-., serves, and as. all; joint stock' banks BCr ' long to numerous worh 'and save.f'it is- surely.;riof to; the loss 6f Hhe.'public- that from;their reserve's . banks-'arb' ; chatted;tov sengment. their dividends. : Yet^by : ';some:cM'ips thevsubcess'of tho banks;"has;.-' been ferred. to in hksh:'toims,,,aild-. I.jWph-. cliiied' to'.think .that,-'those, wh,'*'how blame us-for our- prpspents»..-;,•.haye ■ much''in- common'»witn formerly blamed us' foi" ottr- adversity. Thank'goodness,- they• are.-a-very minor, section of' -;• - ■.■ 1' "While wages and prices of,.most : other"'services.'have rpn'-'very;- maten'ally, and the expenses of banks have increased in accordance therewith, the public do not have to. :pay. much more, tlian before the war fort'banking -..Mr-, vice. The strength of a bank is. benefit of; its depositors,-; ir£-providing undoubted security.-for .their, deposits; . to' borrowers; in; affording. r : confadence against |tuhl. their obfigatioHs; ; .a^d''to,buyers-ot ; .ex-. change, in. giving safety ,m. the .conduct of their., Business. h - , ...'• • ';' To joint stock,.enterprise, must be conceded ari ; important,.,parti of', th» prosperity of; this, country, * and it' may not be too much-to say=i>hat,the Bank, of New Zealand has-been'foremost>m that particular: : Its- ; funds havb ;-been employed, .in the ■ deyelopineht oflapo; I ahd» trade; and. in^desistar^ce : to; pubttc bodies, and there. are mafty' companies and- individuals torday,-.-. in , good positions-, which- they, -owe ; , to > its. backing.••■' With increasing.'strength;its fii&tions 1 will undoubtedly tend .to. tbe.' further, benefit,, of hare- been- associated ,■ with • the ..Botesince -. 185)4.- when the heftd . o»ce ;-was transferred to .Wellington.;', period of- office will ,expirs;.ion; mx?n «sißt, : '-'-1927.-;' an.d r ;ani' 'emboldened .-.to, seek' aliother'•'reiiew'M- 1 'of :tho confidence; which' you. liave-v'soVlon-g.;.RlaCed -m,_ ms<.. and -to; ■stopd-.-.fqr'.r^etectidn^;as';a dire.c-. tor in Decerhher 'ijex-C''-"_ '"..-'.:. :£.'.-. ';■ Directors' ' The-Hon.,. Mr T. Shailer ;< Weston thanked the chairman fortius ;iAferestmo- address, and made remarks on the long term : : loan''' scheme t , (which are reported /.under that heading). .He said.ho- had:seen' tho Bank, grow from investments of hundreds of thousands to investments ofvmilliohs:- The; long term loan -department would, be.a- great increase v of -. .responsihility, - -apd ho thbu'ght the directors not: reoeiy*: in" adequate remuneration, as coiripflred°with other directors" and', their c6ni : parirtive : - responsibilities; -.He was --a sliarebolder' J in ■ \:othei- -banking, institutions, ' s'a> ; :+hat the shareholders' in . this ■ Baiik were .much indebted to the : wise '.-arid profitable in which the surplus funds; of this Bank had -been" employed; during tliev last : few years; liV, less capable hands:thp" return ■would-have been -.very much l6ss, ;Tho profits..he i-eferred.: to had -been made;' not, at the 'expense, ; pf thecustomers:in.^New.Zealand..: .;.. . ... .•• The--report -and.; •balance-sheet: were unanimously adopted.' ,;. ~ :-.y.:. • • The Hon. Mr 1 - Shailer AYestoh- moved that the remuneration-of directors .be increased'by, the"sum.of £lsoo."divisible among,sJ> them',': in such. propprtioii's;"'as thev mav;. determine. sfood that -this .was to be inserted ui the,;.Bill. a«d,: of .course, ;if the. extra responsibility was 'not thrown upqii the directors' the .additiopo.l'kmbunf would not be wanted.'He understood that tile nresent rflmuneifvtibn''wa«. :.aj)d noticed- thatihanks with'-pl'but lialf the-amount bf.'funds to look pajring their directors £IOOO a'year. ' \ Englanfl Our "Best rMarket. Mr.W. H.; .Millward, in seconding the hibtion, congratulatedthe director's, the general-manager, .and other officers, who had, been instrumental in producing the splendid results" placed before, the shareholders. : Present.: econpmic conditions - indicated, af, lean period, lahead. but the figures in the balancesheet showed, that the ;Bank was. i^..,- a' strong; position .to help-iand 1 carry-on legitimate production arid enterprise. Mr Millward adae^Tthat lie {was pleased ,that the.chairman;had onbe again urged. New Zealandito, do. all "the trade :pps- ; sible with Great Britain. In'b'elping ib incfease the purchasing power* of our kith .and: kin; be';dix!ect~ty assisting ourselves,.... Those. w^b' handled New Zealand pfooucts knew, that tho only fe^ar ;4 *n#consistent market for our meat and .dairy produce was England, to pav de;pended large]y..up6n.its^expo : rts. So far ; as- the directors', remuneration was concerned'; lie".did.-not. that arw.'of "the shareholders that :iii- • ■ -.- ■■'■■■■ ■ ■•••-. '."-M-.:. r./.t-.- v -r<t.- .-..•;•'..■

creased' responsibilities' were .well worth additional,-increment* ,was sure;he was expressing ' the i desire ;'of ;■ shareholders* when he sincerely-wished the gerieral manager,, and.''his' ; officers,-.t%;.fullest; possible,.success .to' • their} propped extended -efforts.' . The-motion was put'andearried^unanimouslyv ■.-,'. ',.",' i\ i •'■' The chairman warmly thanked shareliolders.f fbL, their ■; sup^orf. of;' the increase 'doctors' > remunerations, .and.; their, . : . - ■ ■• -^thanks:: to;StafiY; /■;■ - mpve'd-'a.hearty',,vpto of tha^st'oithocehefal, Manager and staff>fbr:.,th|ir .'splendid.sejrviceSidurmg ; the past-year. Mr,' Buckletoh's heart and the 'Bftni; of; New Zealand, and ; : he ; - had under him thoroughly .-trustworthy ..and' reliable .officers.; Th'ev;:wer.e:all living so' close to the' they did. nqf;see;;the great-, neis institution;: vlt:-was':ia wprld;' r .inßtitution, and the greater the inst'itutibjfcbecamo the better,'fpr-. Now. Zealand;;'V ;• . , ""'''"'. " '• v ''-v' ■ ""' "■ In?seeonding v the moti6n,';Mr'Gjborge .; Shirtcltffb's'Kid;it went ' that -'the:;[resuj.ifl disclosed %Qm ; year. to inot. loyal' a^Vl. the B^nk'sf'O^mr^': The" : B]ihk-;h^ c a. ; mostf minibiTj]! W s'Sjff $&,Mw /'marked.^ arid . oiitstanai,hj^attiity,;',hut-:alßo>.e|i6 lovai** toLv.tli^^^tfrae"- Qf '-'ti&B■'';tif^'Krf7^' J! HIS- J *-■ . Shirt'cK'ffe'=|:6^ci)Wlv; VewpJ(asi^df;;};Mif'.'; :' the Ba^^/¥;;^'' , '';i';:;;' : , . .CArried'u^nimous^iv;; .; 3 .' t - , ' :^.-v^ . vote^«f r. Mr Bank^d^tt3ed^;to;vno^i^hsjd6^rile> } exteh*;s-bn}>th'o ' mahagers,SandAto;a lessldegreevthevgen-; i oral sta"ff,vdischargf their, duties. toihe:,satisfied' ; with ; the'wort:bf ;the;staff^the;result; ; \ of, feltjSure.! ; that thpsepreMntwo.iiJdibeJasto : .at the enormous" vplunib-of which the • staflF.^had:; : the year; to: produceHthe'profits: earned by , the Bank.'; He waslglad'to be able to that.. amongst...tiie .senior, staff:, they ihad. several officers of tiie highest: promise, who, with the training experience they Jwere now obtaining, wouldv-be ; positipnsi '■;■'■ Amongst' .the '■? pfficerß; fjfcre; \ a \ ise, were:;being : portillStieSijOf' .(jua]ify.inp^r;Cr^pOT^ir>Utl : ; rx)sitio^S|^>P^'ri'ng;'his:: feeeSttvVisit-, to" \ the : ; ■ much gratification to iMm .to v'fintf*. the - Bank K^ejfjdySd' tne.. higKest', reputation' in; finan^ial;circles; : •: I*