The Bank of New Zealand.

Press, Volume LXII, Issue 18722, 19 June 1926, Page 14

The Bank of New Zealand.

The annual address of the chairman of the Board of Directors of the Bank of New Zealand has for some years past stressed very strongly the urgent need for economy, and has sometimes been more cautionary than encouraging to the general public. The address of Sir George Elliot at yesterday's meeting of the Bank, however, was, perhaps a little surprisingly, quite cheerful in tone. The Bank itself, of course,,has had.a very good year, and the Directors, while expressly warning shareholders, through the medium of the chairman's address, that they must not regard it as certain that the Bank will always make such profits as it has in recent years been able to make, feel that they can safely extend the scope of the Bank's operations. They are proposing to obtain legislative authority, to make long-term advances on the amortisation principle, following the example of. the State Advances Office, and to this end they propose to issue special new capital.to the amount of £1,406,25.0, on which a dividend of 7i per cent, will be paid. 11 this. plan is carried through, there will be some easing of the demand upon the. resources of the State Advances Office, and there are, as the chairman points out, good'reasons why the State Office should receive some relief. The chairman, as we have said, does not share that gloomy view of the outlook which is taken by a good many people: It. is true that the prosperous times following the recovery from the slump of five years ago have resulted in a certain amount of extravagance and an excessive volume of importation, importing orders are being reduced, and circumstances will enforce economy. The pinch of the present never seems to be "made less sharp by the thought that we were more comfortable- yesterday and shall be comfortable again to-morrow, but it-is right to remember that every country, like most individuals, has its ups and downs. One must, as Sir George Elliot says, take in a period in order to gauge truly the progress of the country, and it will hardly be questioned that there has been a steady, march of progress for many, years past. Nevertheless the statistics of production do seem to suggest that without a special effort this progress will not continue. A portion of the chairman's address is occupied with a defence of the Bank against those, who are always ready to accuse it of unduly exploiting the public' In the course of his defence he .mentions some facts which have a bearing upon a political issue of much importance. The State, as he says, is competing against the Banks, and competing,, although he does not use' the word, unfairly. The Post Office Savings Bank, for example, pays no in-come-tax, and yet a joint A stock bank doing business.on the same scale and in-the same way would pay £300,000 in. taxation. The. Advances Department pays income-tax amounting to only £4757 on operations for which a private bank would be mulcted by the Tax Department in the sum of £70,875. These ( are pertinent examples of the way in which the State, when it engages in ordinary business, neglects to operate on a ' financial basis \.hich would sustain a. real commercial test