BANK OF NEW ZEALAND

Evening Post, Volume XC, Issue 134, 3 December 1915, Page 8

BANK OF NEW ZEALAND

HALF-YEARLY MEETING

TAXATION OF BANKS,

The half-yearly meeting of the Bank of New Zealand was held ai the Bank to-day. Mr. Harold Beauchamp (chairman of directors) presided. There were also present : Messrs. J. H. Upton (Auckland), W. B-eece (Christchurch), M. Kennedy, R. W. Kane, and Wm. Watson, directors; W. Callender, general manager; A. E. Mills, chief inspector; and B. M. Litchfield, chief auditor. | There was a large attendance of shareholders. The Chairman, stated that there ware no accounts to review, as at the annual meeting. Instead, he reviewed the present financial situation in its relation to the war. A full report of Mr. Beauchamp's remarks on this head' will be found elsewhere. In dealing in particular with the taxation of banks, Mr. fieauchamp remarked that in the readjustment of taxation, necessitated by the financial situation resulting from' the war, the hanks had come in for more than their fair share of the additional impost. Banks are assessed for income tax, not upon their actual earnings, but upon a hypothetical income based upon a percentage of their aggregate assets and liabilities within the Dominion. This percentage was formerly 15s, but under the recent Finance Act it has been increased to 30s per cent. " Our hypothetical taxable income has therefore, at one stroke, been doubled," he explained. "But this is not all. The tax we have to pay has ako been doubled. It was formerly Is 4d in the £; it is now 2s 8d in the £. The practical effect-, therefore, of these arrangements is that our income tax has been quadrupled, and that we shall now have to pay at the rate of Ss 4d where previously we paid only Is 4d. Hitherto our income tax has amounted to about £15,500 per annum. In future J* J lll be about £62,000 per annum. Added to land tax and note tax our total contribution to the taxation of PwZ^ WiU rMch Proba°ly about ±<120,000 per annum. . "We are not complaining. The bank is doing well and therefore, meantime, cheerfully shoulders the burden laid upon it. But we feel it is an unduly oppressive burden compared with that laid upon others, and we therefore look forward to the time when some remission may be allowable. The anomalous position is that, while it purports to be an 'income tax,' it is payable altogether independently of our actual income. It is quite- conceivable that a bank might sustain losses which would leave it practically without income for some particular year, but that would not relievo it of liability to pay income tax under this assessment. Viewed from that standpoint, I think most people will regard the basis of the tax as inequitable. Whilst we earn we will cheerfully pay; but, under other conditions, we contend that Parliament should, for the purpose of taxation assess our profits upon a more liberal and equitable basis." The special general meeting called for the 22nd October last, for the purpose of amending the bank's deed of settlement so as to bring it into conformity with, the statutes affecting the bank, was. duly held. In response to the directors' request for proxies for use at the special general meeting, and at the meeting to-day, in carrying the proposed amendments, they had received proxies from shareholders representing 73,324 shares, which clearly indicated the general approval with" which the proposals were viewed by the shareholders. BOARD OF DIRECTORS. The retiring director on that occasion was Mr. Martin Kennedy. Mr. Kennedy gave due notice of candidature for the seat becoming vacant, and, being the only candidate, he was declared duly elected. (Applause.) The Chairman congratulated Mr. Kennedy upon the attainment of his "majority" as a director of the bank, and expressed to j him the hope that he might continue in the enjoyment of good health and ! vigour to serve shareholders' interests as a director of the bank for many, years to come. Reference had' been made at one or two past meetings to the services rendered to the bank by Mr. John Murray, a former inspector and general manager, and subsequently for a short time a director of the bank. He died on 30th June last. ~" I, fc is'fitting that I should mention the fact, and place formally on record our recognition of his abilities and our I appreciation of the work he performed ™r the bank," added Mr. Beauchamp. Mr. Murray's distinguished services will never bo forgotten by those connected with this institution." Profits for the half-year ended 30th September last had been quite satisfactory, and the board felt fully justified in declaring the usual interim dividend lof 6 per cent, on the capital paid up in respect of the preference and ordinary shares. MR. KENNEDY RE-ELECTED. Mr. Martin Kennedy, in returning thanks for his re-election, unopposed, also thanked the chairman very much for the personal good wishes expressed in announcing his election to fill the vacancy. Ihe Board consists of six members, four of whom are appointed by the New Zealand Government, representing Dominion ■interests in the capital of the Bank, and two elected by holders of ordinary shares in the Bank. Though the retirement of shareholders' representatives takes place by rotation on 31st March in each year, nominations for election close in July previous. The object of this is that, in the event of a contest for the seat, thore may be time to give .notice to distant shareholders, and afford them the opportunity of voting by post in terms of the regulations. "In the earlier years of my becoming one of your representatives on the board when speaking at these statutory meetings, I called attention to what appeared to my mind the anomaly of Government nominees taking part in the discussions, especially as neither they nor the Government held any shares in the capital of the Bank," said Mr. Kennedy. "Gentlemen, that anomaly, if such it were now no longer exists. The Government now holds a substantial number of shares m the capital o! the Bank, and its no-min'-es moreover tire not debarred from holding shares. The chairman has referred in appreciative terms to the services rendered to the Bank by the late Mr. John Murray. From my" own personal experience of him as a director, and for thirty years previously as a client of the Bank, when he was Chief Inspector, I can unreservedly endorse what the chairman has said on this subject; and having regard to the part he played in the resuscitation of the Bank in 1894, his conduct may be regarded as both public-spirited and disinterested, for he I subsequently stood apart from holding ! any lucrative position in the Bank, which he unquestionably might have had if so minded. The unlooked-for and speedy reepvciy of the Bank confirmed Mr. Murray's assurance, given to tbe Go ; vernment in 1894, that the Bank had an enormously valuable goodwill." . Mr. Kennedy, in conclusion, reiterated his entire confidence in the future of the Bank of New Zealand as §& firefteiit

constituted. The Bank's position reflected credit on the management. It also reflected credit on the Dominion which came to its rescue in its time of need. The resolution amending' the Bank's deed of settlement was confirmed. This concluded the business.