BAMS AND FARMERS

Evening Post, Volume CVI, Issue 48, 25 August 1923, Page 21

BAMS AND FARMERS

NATIONAL BANK MEETING

THE DOMINION'S PROSPERITY.

(FROM OUR OWN COBRESrOIfDEXT.) '"•" LpNDON, 12th July. The Hon. W. Pember Reeves, chairman of the National Bank of New Zealand, in his address to shareholders in annual 'meeting _tias a much pleasing story to teiythan at the two previous annual .meetings.. Though/ the burdeo "of taxatioß .?ras ijpart; of his story, and he. menfionea-thjai in" five 'years £830,000 had been p%id',to both Governments as compared*':with £780,000 to shareholders, he sounaed.'.a note of hope, especially regardingtheprbspeot of lower taxation,in ZealSnd;'-;. A special feature of.;£he meeting was the high tribute of praise paid to the National Bank, and tcybanks generally,, on; account of the attitude they had taken up during the -.period of depression. Both the New: : Zealand visitors, Mr. Ranald M. Macdonald (Chrißtchurch) and Mr. Ernest Davis (Auckland) referred to this matter. Through the troubled period, said Mr. Macdonald, New Zealand as a whole had lived by the banks, who had simply provided the life-blood of the country. THE BALANCE-SHEET., Paid-up capital, said Mr. Reeves in the course of his speech, was now -SI,----250,000, and the reserve fund would be increased to £1,260,000. Note circulation, which last year was £2,031,000 at 31st March, was £1,729j000, > Latest figures showed that this was now reduced to £880,000. In explanation of this item he .said that the expansion in note circulation during the last two years was entirely' due to a' change in overseas trade. While importing by both Australia and-New Zealand had been severely cut down since "1920-21, the exporta of. wool, wheat, meat, dairy produce, and other commodities had continued to pour into the British markets, until exports had exceeded imports by many millions. Deposits in, 1922 showed a small decrease of> ; , £53,000;.. this year they amounted to £9,262,000. They were well spread over their branches, and included additions'to deposits in London. Bills payable were down £200,000. On the assets side, coin, bullion, and cash at bankers, were* £1,087,000, a decrease of £433,000, as-.compared with figures at 31st March, 1922, but investments were larger by about £321,000. Bills receivable—British" bills^current and in transit, had increased by £1,611,000. This year the figure was £3,130,000 as against £l,519;O0Q in 1922, while advances were £8,218,000, or £662,000 less than-the previous; year. The total of overdrafts, discounts and British bills stood ,at 31st March this year at £12 - 087,000. On 31st' March, 1922 they were £11,064,000. .During .the "year about £118,000 had been spent on bank premises. The net profit, after paying a bonus of. £13,000-ib the staff, was £229,000, a n increase of £16,000. InSJ^/IL* 116 *•> it showed 4/371,000, an increase of £41,000 over lapt year's figures. The "directors proposed paying the same rate of dividend and bonus as last year—l 4 per cent, free of tax—and that on their increases naid-1 up capital of £1,250,000: . .■; ; j

-. IMPROVED CONDITIONS. j^After.summarising the financial conditions in the United Kingdom and other countries during the past two years the chairman referred to the sitaation in New Zealand, where he said the improvement could be spoken of almost without qualification. Merchants were able with more or less losses, to liquidate stocks Producers had the benefit of a mild wintej.- and of a spring and summer so suitable for dairying that the year had seen another large increase in the output or,.dairy produce. Mutton and lamb maintain the profitable prices with which 1922 opened. Crossbred 'wool,' which formed the great bulk of the Dominion's cup, so improved in value as to leave a margin of profit for the grower while the -wheat yield wag ample for home requirements. The jbyerseas trade left a substantial' balance in 'favour'of the Dominion, while.: an p increased revenue and diminished 'expenditure enabled the Prime Minister not only\tp balance his Budget, .but to show :a surplus of <£1,----315,000, placing, New Zealand among the very few countries in the worldvable just- now to balance their' Budgets. No important labour, trouble ihad; arisen during '.the yearj! though organised labour strongly ■ resented wage reductions made by the Arbitration Court on account of decreased cost of living, but there had not- been a serious strike or lock-out. Indeed, in the laßt two years only one strike—;brief and unsuccessful—had been recorded:'. When it had come to action Labour had shown moderation. Indeed, there was,probably no part of; the world where there was less costly industrial conflict.- This was, perhaps, due partly because .there" was no country, in.which there was actual want and destitution than in New Zealand to-day. ' '

THE BUDGET. I For the first time for many years New Zealand, in March, 1922,. failed to balance its Budget. Revenue had fallen short of expenditure by £340,000. Happily, the lapse was brief. Bevenue at £27,579,000 had been this year £1 329 000 above the' estimate. It had been only £547,000 below the receipts of the previous year,'and this despite the faot that due to the abolition-of the supertax of 20 per cent, on land and income tax, receipts from this source showed a reduction of £2,267,000. Expenditure, at £26,264,000, was £2,203,000 less than in. the previous year. This, though not so much as was hoped for, was substantial, and the Government was entitled to credit for the net result. BURDEN OF TAXATION. j "In the Middle Ages," Mr. Reeves continued, "in the days of. that (estimable monarch King John, chroniclers tell us that the capitalists of the time, who were Jews, were persuaded to pay the rough-and-ready supertax of those days by having their teeth pulled out in rapid succession. But I have not read any--where, that even these maltreated Hebrews were ever operated upon by two dentists pulling away "at the same time. This is our position. "We pay taxes to two Governments—those of England and New Zealand. Of the rival wielders of the" 'official forceps', I would "nay thai, while England is the more scientific, New Zealand has the stronger wrist. The net nesult is that in five years we have paid in rates and taxes no less, than £830,000, while we have distributed to our share holders only £780,000, It is, therefore, with, sincere ./thankfulness .:'that we .note that .taxation-has bec'm somewhat reduccJ inithis country, and that file prospect of a substantial reduction in New Zealand sccrns good. The; public accounts fo> the year reveal a position which should make: possible a substantial-and immediate, reduction. . Public opinion calls fu'this, fcince it is. plain that the burden of taxation is retarding a further trade re-" vival, preventing the fall'in the cost of living. Moreover, it is also deterring the introduction into the Dominion of capital, which is understood.to be available, and is certainly necessary- if development of the, country is to be rapid; It is, therefore, very satisfactory that the Prime

I Minister fully recognises the need for still I further economy, S o that there is reason to expect that the income tax will be -reduced to at most the 5s maximum recommended by the Commission." After giving some details regarding the public debt, Mr. Eeeves said that he guarded himself once more by pointing out that the practice of borrowing some millions annually could not go on' for ever. , j IMPERIAL CONFERENCES. Brief reference was made to the Imperial Conferences. "* "The political conference," said the chairman, "owing to a recent action of the Canadian Government and a recent proposal from South Africa, neither of which seems to me wise, is of unusual interest, and may have- difficult points to' settle. I hope that :New Zealand wiil be represented there as strongly as-possible. There seems .tq.be,some hope that the economic conference,'maj■.4?ad'-to 'more practical results thto tHe'-passing of ; benevolent resolutions.;'vlt.is understood .that the Governments' -represfented. there'will avail themselves ,jj fully ■ of the advice of selected experts.: If ; ; tTiey'do'this\and give themselves; fuirtime, to-consider the complicated questions.'with' which they will have to deal, we may expect the Conference to bear valuable fruit." THE CHIEF INDUSTRIES. Imports and exports were the next subjects dealt'with. Great as the progress had been over the past decade, said Mr. Reeves, it was safe to say that pro-' duction- could be carried much further. He then gave an exposition on dairying and milk yields, followed by an analysis of the wool situation. "The position is remarkable," he said. "It is known that stocks of old wool have been passing into the hands o| manufacturers, and this has served to mask the falling supplies. But with old wools almost exhausted the true prospect is being revealed. The outlook for growers, of this community is, therefore,, full of promise. All the ; indications are' that 'wool will command good prices for. some time to. come, and should it o<ioir that trade with Centoal and Eastern Europe becomes possible, prices would inevitably improve, for Central Europe is'in great need of woollen goods." A level re-' tnnneration to the'sheepfarmer had continued throughout the year, and with fewer sheep in every country over the past ten years it was reasonable to anticipate that through the current year the-average prices of mutton and lamb would be maintained. Small shipments of lamb which had been made to America had given satisfaction, and,/while the Americans were not great muttoneaters, the decrease in the number of their" sheep suggested " that America might become something of a market for New Zealand lamb. Beef was negligible as a factor in New Zealand's exports. It was well sometimes to compare the ,lot,of th» Dominion with that of others, if- only to obtain a correct perspective. Compared^ with the United Kingdom, with- Canada, and with the United States, the lot of the New Zealand farmer was happy. . Land.returns and exporte were above pre-war levels; costs of production, .of shipment, and of realisation were being gradually, if slowly,. reduced, and all that was necessary to the continued success of producers was a readjustment of ideas to meet post-war conditions. It was true that of the 407 bankruptcies in New Zealand for the. year to December, 1922,193 were of farmers, but it was also true that in every case the failure was due to buying land at absurd prices. • < ADVANCES TO FARMERS. r "Some complaints oh behalf o! farmers are made against the trading bank* iji New Zealand," said Mr. Reeves. "Let me give pur position. '• Our advances to 'farmers represent 31 per cent, of the total number of our clients/ 'while in amount .they come, up to. 3Z per cent. Even these figures do not include ad-' vances to -farmers' co-operative companies, . stock, and station firms, etc., advances which, are used by them to trance farmers and pastorali6ts. Dairy companies banking with us receive their supplies from 18,620 shareholders, of whom only a, percentage are our own customers. I venture to think that the fact that 37 per cent, of our advances are to men on the land will convince the unbiased that we* are not neglecting them. Further, when the importing boom of 1920 and the coinciding slump in produce- values combined to create grave difficulty, we were forced to put pressure on the commercial community to reduce stocks and liquidate- t&eir liabilities. To the man on. the land, whose position, however difficult, was yet Bound,' w» continued a full measure of help, and ever increased it where there was a fai* case fo» doing so." : . '

PROSPERITY AND INDUSTRIAL PEACE. ] " The crigis which came at the end ofj 1920, after a quarter of a century of prosperity, istruck.the farmers with a suddenness that, must have been stunning. To an onlooker, moreover, it would seem distinctly a good thing for the community _ that farmers . should be awake to their changed position, and should be actively discussing means {or improving their methods'and organising the business of production. The schemes they j discuss—pools, land banks, and so-forth —may not always stand analysis, and, indeed,. usually do not, but their very ! discussion is a sign of: mental energy, will spread information, and should lead to the discovery of improvements. It is better that farmers should try and think their position out than that \they should sit still. At the same time,- I cannot help thinking that if New Zealand critics look over the.world abroad they may come to regard their own troubles . with comparative philosophy; New Zealand has her troubles; but she has an honest Treasury, trading classes who are. trustworthy, farmers who in-1 crease production, and workmen who are at work. .Her people can point to industrial peace, improving trade and prices, -in which all classes share with, at any ] rate, an approach to equity." I After announcing that the directors | had asked Mr."-J. B. Reid, of Ellerslie, to join them, and expressing thanks to ! the staff both in New Zealand and in London, the chairman moved the adoption of the accounts, the declaration of a dividend at the rate of 12 per. cent, per annum for the six months ended 31st March last,-together with a bonus of 2 .per cent, for the year, both free of income tax; the placing to Reserve Fund of £10,000, and to the" officers' pension and gratuity funds 1 £22,500; the carrying forward of the balance, £145,557.. This was carried. .Mr. H. F. Freshwater and tbo Hon. Arthur M. Myers were re-elecled to the bo^rd. MAGNIFICENT'^ SERVICE. In proposing a resolution thanking the. directors, general 'manager, and officers of the bank for then- services, Sir. Ranald Macdonald' said that they all knew Uie'-lieadquartevs staff in London; who were always most obliging and, cap-, iiblc, .oiit many '.shareholders did' not'know whata good staff they had in New Zealand. The- bulk of the money was earned at that end, and they depended very largely upon Hie general manager, managers, -and-, staff out there. The members of that staff were known throughout New Zealand for courtesy and competent handling of business. As the chairman had indicated, they had passed through a. very troubled period during which New Zealand, as. a whole, had lived by the banks, who had simply provided the life-blood of the country All thinking people in New' Zealand were

I absolutely, satisfied that the banks had carried out,their duties to the country in the best possible manner. Beforethat period no one could have conceived that the hanks could do .what they actually had done during, the' difficult two years. They had '.undoubtedly rendered magnificent service to the country. (Applause.) Lieut.-Colonel Sir Lambert Ormsby M.D., J.P., D.li.; seconded the vote, and said that. the . chairman had mentioned that the'reserve''fund was equal to the paid-up capital, \yhenever that was the case a ' bank /was in a very sound position^', and, therefore, the best thanks of the shareholders were due to the directors for their careful attention to the business. -.As regarded the staff, he felt that he'must mention Mr. Arthur Willis, who was the essence of courtesy, business, and . kindness to every customer who came from afar to the bank in London. After travelling for miles over land and sea'they felt they found a friend in him. (Applause.) Mr. Ernest Davis said that, as a client of the bank in New Zealand, he would like to support what had been said about the staff there and about the ser- : vices which the banks had" rendered to the.country. The banks had "'played the game" right through the crisis. He regretted the retirement of Mr. Lawßon, who held the esteem and respect of all the bank's clients in the province of Auckland. Directors present at the meeting- were • Sir Austin E. Harris, K.8.E., Mr. H* F. Freshwater, Mr. Bobert Logan, and ■ Mr. Lindsay E. Smith.