MORE CAPITAL

Evening Post, Volume CV, Issue 141, 15 June 1923, Page 7

MORE CAPITAL

BANK OF NEW ZEALAND! SHARES

,£1,125,000 TO BE ISSUED

ANNUAL REVIEW BY CHAIRMAN*

The annual meeting of the proprietors of the Bank of New Zealand was held at ■the bank to-day, Sir George Elliots presiding. Other directors present were: Sir Harold Beauohamp, Messrs. William Eeece, William Watson, and R. Ww Kane. The chairman apologised for the at* senoe through indisposition of Mr. J« H. Upton, Auckland. The general man-i ager, Mr. Henry Buckleton, and thf chief auditor, Mr. E. W. Gibb, were alsa. present. Before the consideration of the reporff and balance-sheet for the year endect 31st March last was considered, thai chairman'announced that "in order to make the capital commensurate with. tha deposits and general business of the bank, and to provide for rendering the maximum of "support to our borrowing customers, the board has resolved ta issue at par £1,125,000 of new capital. In accordance with the provisions o£ the' Bank of New Zealand Act, 1920, one-third of the amount (£375,000) will be offered to His Majesty the King in the form of preference 'B' shares and two-thirds (£750,000) to the ordinary! shareholders in the proportion of, as near as may be, one new share to every three shares on the register in their name on the 27th July, 1923. The offer will, be open for acceptance as soon as made, and will be made as soon as practicable after the 27th July, 1923. Holders of ordinary shares shall be entitled to purchase tha- whole or any of the shares so offered to such holders at auyi time on or before Ist October, 1923. Interest at the rate of 5 per cent, per an* num will be allowed on payments made in advance of due date. For purpose^ of the offer the transfer books of the bank ' will be closed from 27th July to 10th August, 1923, both inclusive.

"A point with regard te> the preferance 'A' shares has been raised," said; the chairman. "The dividend on these! shares is a fixed 10 per cent., but is non-cumulative," 'he,/continued, "thati is to say, that if a disastrous year occurred in the bank's finance when ifc might be undesirable to declare any dividend, there would exist no right to tha Government to be recouped in latefl years the dividend lost in the unfortunate period. It is in the last degree unlikely that such an event will occur, but; the Government is of opinion that tha State interest under the preference 'A' shares would be absolutely secure, and the directors have.felt the force of thel view that the dividend, upon the preference 'A' shares should have a statutory place !is i cumulative. The Government) has intimated that it will become necessary to amend the law in this respect, and the directors have- therefore intimated to the Government that they see na objection to such an amendment be^g" made."

Sir George Elliot then moved the} adoption of the report and balance-sheet* and in doing so said, as compared with the two previous yeaars, last yea* (Showed a'considerable falling-off in'profit of the Bank accounted for chiefly] by loss of interest consequent on reduction during the past year of over threa millions in advances ■within the Dominion; by rediiction, too, since the New Year, in the rate of interest charged upon best accounts, and by lower rates obtained for a large proportion of the) Bank's funds in London.

"The large amount of funds that wsi '. have thought fit to hold outside theDoJ minion,", the chairman said; "has often . been the subject of unfavourable criti- ' cisni, but the wisdom of our policy was | ■proved during the, financial depression I that set in towards the end of 1920, . when, by realising our London and Australian investments, we were able with. ' comparative 'ease to meet all legitimate demands made upon us. The policy of "' the board is to maintain a position of ! great strength and never to subordinv 1 ata safety to profit. To this end we ■ keep a large portion of our resources in, » a readily realisable form, even though i by so doing our profits suffer." > Income tax in Great Britain/ Ausi tralia, and. the Dominion had been re- > duced, he said, but, on the other hand,, ; it had been found necessary to make coni' siderable provision for possible losses alt most all of which were in respect of thf • Bank's. large rural business. < The reserve would be brought up ttf i £1,825,000 by the proposed addition of , £150,000; the carryforward was -£321,- ------■ 937—a slight reduction on last year. ; THE STAFF. ' The chairman made complimentary , reference to the care and attention oi: the London Board of Directors, and to the ; appreciation of the directors of the work ; of the staff, expressed in the granting of bonuses to all members, except junior ( unmarried men, who receive yearly increases on a fixed scale up to £270 per annum. Those who show marked ability were given a higher salary than was provided by scale—a recognition' deservedly earned "by a large proportion of their number. In referring- to the war memorial recently erected in the vestibule of the Bank i n Wellington, Sir George ■ Elliott said of a total staff of 1006 men, 561 men joined up for active service, oi whom 533 were from the New Zealand staff and 28 from the London staff. There were 71 killed and 136 wounded". "THESE UNCERTAIN TIMES." The chairman reviewed the money market, referred to the moratorium, dealt with interest rates, and touched upon a numberof other topics which appear under their own headings elsewhere in this issue. Concluding his speech, he remarked : • ' " In these uncertain times, it is difficult to say what the future hns in store for our Dominion, since we rely for our prosperity on the prices our primary products realise abroad. We are thus-de-pendent on conditions entirely outsido our own control. The purchasing power 1 of our own principal customer—Great Britain—means good or bad times for this Dominion, and the purchasing power of Great Britain again depends upon conditions which prevail in other countries, tries. " One can scarcely think that the prosent exceedingly strained relations between France and Germany can long continue. Nor.should the recovery of Bussia be a matter of more than a few years. With Germany settled down to a grini determination to retrieve its position, and Russia resolved to conduct its life on common-sense lines, resolved also to develop its immense resources, new economic problems will arise, tliq result of which it is impossible to'forecast. Prudence dictates that the people of this Dominion should so conduct their affairs that they shall always be * equal" to either fortune' - " 1 have not hesitated to indicate some defects which exist amongst us. but. on .the other hand. 1 must.-point out that thp vast 'majority oi' uiir settlers are in a. thoroughly sound position. We are in a most favourable position to form'an accurate estimate of the actual fina'srial ti£. tlia country, to* ■dosjaL.'siv^

tier cent, of the banking business of the Pominion is transacted by our Bank. The . Information thus obtained, the knowledge .■which we possess as to the spirit in - ■which the great majority of our people ; have'met .the difficulties of the past two or three years, leads me to look forward ' jrfth confidence to the future of the Do- - minion, and to expect that the years, to '. come .will -witness steady progress. , " New Zealand is a land peculiarly fortunate. It is a young country, but its '.vary youth should be its chief asset. '"Every day it is making its own history, j • and its own traditions; if it remembers 'ihe value of co-operation between the ■'- classes, that history should make pleasant reading in the future." '■BUSINESS STEADILY INCKEAS- ' :, ING. ' Mr. Watson, in seconding the motion ' for the adoption of Ijie report and bal--anee-sheet, congratulated shareholders on L the strength and continued prosperity ot ■the bank, which had warranted the 'hoard in resolving to increase the capital. •■Tiie shrinkage in. advances since ■ last year • must not be taken as a de•crcMain the general business of the ' bank, for the advances last year were 'unduly swelled by the unusual and high-pricud importations of goods, which : were being gradually got rid of. What -really mattered was that the general ..operations of the bank were steadily increasing, and must continue to increase :"svith the population of the Dominion; it -•■was from thesis that the prorite of the .■Sank were made, and he was confident Jthat, unless some unforeseen national j: calamity should occur, the future workting would permit of the same rate of 'dividend as -before being paid on the "increased capital, as well as regular addictions to the reserves. This opinion was 'based on his knowledge of the soundjness of the assets, the careful policy of :!-tJie Jjoard, the excellence of the general .■management- and staff, and the very -valuable goodwill, to which might be .added the confidence engendered by 29 .years' experience of the progress of the • institution. Of course) what he , said ['must be taken as his own opinion sole;ly,' and in no way as .committing the aboard, whose ■ views the chairman alone ; was entitled to express. • "It will be my turn to retire by rota".tioii. on 31st March noxt," added Mr. iWatson, "and my long service embold- ( ena me to again stand for re-election as of the shareholders' representatives jat the meeting to be held in Decem;ber, when- I trust to receive proof of ■your continued confidence." Zl The report and balance-sheet were then adopted. ■•■■ ':• .CONGRATULATIONS. ':•. . Mr. John Mills (Port Chalmers) said .'he had been requested by a number of •shareholders in the South Island to congratulate Sir ..George Eliot and Sir Harold Beauchamp upon the honour of '■■• knighthood conferred upon them'by His !,' Majesty the King. The speaker enlotheir services and moved, on behalf of the shareholders generally, a motion of hearty congratulation. ,: In seconding the motion on behalf of ;the Wellington and North Island shareholders, Mr. T. Shailer Weston said that those who had been shareholders ". since 1900 must recognise the very great ;",part Sir Harold; Beauth.amp had' played '■■in the development of the bank. Sir ...Harold Beauchamr> could always look ;; back up*on: that with a feeling of satisHis work had not only bene"iitedths shareholders of the institution, but it had been of great advantage to the Dominion. He had done a great deal to raaka the Bank of New Zealand .".one of the big financial institutions of .1 the'world'. The bank held a position similar to that which the Yokohama Specie Bank, of Japan, holds, and was wm.ost.on terms of equality.. with the fiv» big English banks. A CRITICAL TIME. . During 1 the last great crisis, the work of past yeara had been thoroughly test■ed, and although there might have been '.some errors ot judgment in the past, ■'yet everyone was liable to make some •errors of judgment, and it was inevitable Zthat «yen big men should make some yet he thought one could say -this : Comparing the assistance which the Bank of New Zealand was to this country in our time of stress, with the assistance .-' rendered by the' Commonwealth Bank to ■ Australia, one could say that the com- , parison was altogether in favour of that ; rendered by the Bank of New Zealand 'to this country. In fact, in some re■i epects the Bank of New Zealand had been of assistance to Australia, 'notably in the matter of assisting in respect to exchange. He was sure they all hoped • that Sir Harold Beauchamp would live .;. long 1 to enjoy the honour which had been conferred upon Km. As to Sir George - Elliot, his honour had come to him al- ;! most at the beginning of his career. The ; speaker alluded to the work of Sir .George Eliot in connection with Samoa : find _as a member of the Railway Com■./mission. The honour conferred upon him -; .must be also regarded as an honour to ".' the bank. Those who had heard his ■: speech that clay must recognise that the j affairs of the bank were in the hamis "of a man of exceptional ability. The '•words of his address were pregnant with .- meaning,- and- his remarks showed that J^ ..was a,'man who had the courage cf -■his opinions. His reference to the larm.ers^ ; and as to facilities as to credit :' which had been afforded to them, might, ,no doubt, be unpalatable to some, ;'. but what ( had been said was in the in'.terests of the Dominion, and more es- ; pecially of the sound and stable .'farmer himself. The'-motion vias carried by acclamation. '• " Sir George Elliott thanked those present for their congratulations. .; In returning thanks, Sir Harold Beau- ■^ champ remarked that of all tie congratulations he had received there were"none "he more sincerely valued than those :• ■which had been accorded to him that .■day. The Ions; period of his connection with the bank had been an extremely /interesting and valuable one, and duriu'" that period Jib had been the recipient of ;man'y acts of kindness and consideration ,lrom the shareholders. '> ■ THANKS. •- ■ Mr. T. Shailer Weston, in moving a vote of thanks to the directors, general manager, and staff, remarked that they know the difficult period which Mr. Buckleton had had to pass through during the past few years. Ho was sure he expressed .the opinion of all present when he said they had every confidence in Mr. Buckleton's judgment, and that they trusted he would be long spared to look after the bank's affairs. Mr. J. Milne seconded the motion, .■which was also carried with acclamation. Sir. George Elliot returned thanks on behalf of the directors, and added that he had agreed with the remarks which had been made about Mr. Buckleton, and as to the services which he had rendered to the bank. The services which the general manager and .the staff had given was largely responsible for the very fine balance-sheet which had been presented to the shareholders from year to year. Mr. Buckleton, in-acknowledging tho vote of thanks, said he very much appreciated the remarks which had been made. .He endorsed what had been said as to the trying times which' during the last lew years had been gone through, particularly by the branch managers, and also by the senior officers at the head office. Ho concluded -by assuring those present that the officers of (he bank ■would 'd0..a11. in their.power to advance the interests of-the shareholder.^..;" \ ' JIOVKMESf3 1S~:OE I~iHE-SHAKE'S; For some time past public interest in ordinary J&ftfss El tieJ3sjjk. e£ New. <

Zealand has been particularly keen. Wellington Stock Exchange reports, which, reflect, more or less,' prices on other New Zealand exchanges, show that sales were made in March, 1921, at as low as £2 0s 6d. In June, 1922, tho price was from*£2 12s 6d to £2 14s 6d, rising to as high as £2 17a, and doming back on the announcement by the General Manager (Mr. Henry Buckleton) in August, of that year that there were then no foundations for the rumours that there was to be a .new issue of capital, and that there had been no change in the position since the annual ■meeting, held in June of that year; in fact, when the issue of further share capital would be made had not been seriously considered by the directors. The shares have been steadily rising this year. They opened at £2 16s 6d in January, went'to £2 19s 6d, and receded to £2 16s ex-dividend, closing at £2 17s 6d. They remained round about that figure until. April, wheii the rise began again, sales being effected at £3 to £3 Is 9d, but falling again towards the end of the month During June they have been dealt in at £3 Is 6d-to £3 2s 9d, cum dividend.