BANK OF N.Z.

Evening Post, Volume CXXI, Issue 138, 12 June 1936, Page 14

BANK OF N.Z.

ANNUAL MEETING b EECENT LEGISLATION £ WHAT THE EFFECT WILL BE J £ ~~~ c REDUCED EARNING POWER t< h - V Sir George Elliot, chairman of direc- g tors, presided at the annual meeting 2 of the proprietors of the Bank of New Zealand today. There was a large at- z tendance. Other directors present were f Messrs.- William Watson, R. W. Gibbs, f and A. T. Donnelly, also the General j; Manager, Mr. F. W. Dawson and the > chief auditor, Mr. A. L. Hempton. ; In moving the adoption of the report and balance-sheet (which were taken £ as read, and which have already been , published in these columns), the chair- c man remarked that during the year j under review, the total amount of i Bank of New Zealand notes presented ( for payment was £179,326, the amount of unpresented notes at March 31 being ; £324 452. Deposits, £35,746,430, were higher by £2,541,817 than a year ago, the greater - part of this increase being in current accounts. Coin, Reserve Bank notes, and deposits with bankers stood at £6,913.141. Money at call and short notice, Government securities and other securities in London, £8,172,420, showed an increase of £586,952. Bills receivable in London and in transit showed an increase of £799,333, mainly accounted for by larger shipments of wool and higher prices ruling. New Zealand Government securities, £3,397,058, showed an increase of £249,386, but Australian Government securities were less by £264,326. Advances and bills discounted, £22,179,373, were more by £688,642 than a year

THE DIRECTORS AND STAFF. Sir George Elliot reminded those pre :ent that the term of office of Mr. Wil liam Watson, one of the two represen tives of the ordinary shareholders, having expired on March 31 last, he was re-elected unopposed to the position Mr. R. W. Gibbs's term of office wil. expire on March 31 ,next, and he wil again offer himself for re-election. The term of office of Sir Harold Beauchamj and Mr. Oliver Nicholsoft, two of the Government nominees on the board expired on March 31. "Sir Harold Beauchamp's connection with the bank has been an outstanding one," said the chairman. "A nominee of the Government to the board on its reorganisation in 1898, Sir Harold was a director for over 37 years, fifteen years of which he was chairman. The bank, when he became associated with it, was still suffering severely from the depression of the nineties, and he took a prominent part in guiding the institution from a position of weakness tc one of great strength. His reappointment to the board by successive Governments indicated the high esteem in' which his abilities were held. The board has placed on record its appreciation of Sir' Harold's valuable and distinguished services to the institution over a period of so many years "Mr. Oliver Nicholson joined the board in 1924, and was chairman foi the financial year ended March 31,1933 The board has also recorded its appre ciation of Mr. Nicholson's valuable services to the bank during his period oi office." Regret was expressed that during the year the bank lost by death twe members of its London board, viz., Lore Jellicoe and Sir James Mills. The former was a member of the Londor board for ten years and the latter foi twenty-one. . "In the de&th of Lord Jellicoe, the Empire lost a great national figure while Che passing of Sir James Mills has removed one whose business ability courage, and faith in the future oi New. Zealand led to the founding anc development of the Union Steam Shij Company of New Zealand Limited, added Sir George Elliot. He expressed appreciation of the services of the directors of the London board, and alsc of the services of Sir John Higgins and Sir Henry Braddon, the local directors at Melbourne and Sydney respectively 'The management of the institution was being most ably conducted by Mr F. W. Dawson and the high officials under him. "Mr. Dawson is proving a worthy successor to the late genera', manager, Sir Henry Buckleton," said the chairman. The managers .anc officers at various branches, as well as those at head office, were carrying oui their duties in a highly satisfactory manner. They were thoroughly loya! and enthusiastic in promoting the welfare of the institution. It was pleasing to note that the board continued to receive appreciative remarks from customers and New Zea land visitors to London regarding the service and attention they received a' the London office. It was the aim oJ the manager there, Mr. D. F. Reid, anc his staff, to assist visitors in every was possible. The tourist business was one ' of growing importance to New Zealand and the Bank of New Zealand has ful Ifaoilities for arranging and meeting the financial requirements of the travel ling public and overseas visitors.

NEW LAWS AND THE BANKS,

Sir George Elliot next referred to recent legislation, including the Reserve Bank of New Zealand Amendment Act and the Primary Products Marketing Act. ' "Some of the legislation," tjie chairman said, "directly affects.the trading banks. For instance, they are to lose from August 1 next the handling o£ the exports of dairy produce, and should wool and meat come under the Government guaranteed price and marketing scheme, the effect would be that the banks would be entirely deprived of the normal means of replenishment of their London funds and would have to purchase all their exchange requirements from the Reserve Bank of New Zealand. _ "I need hardly say that the Goveinment's proposals in this direction will seriously affect an important branch of the trading banks' business, a business they have developed and carried on since the earliest days of banking in New Zealand." Having briefly outlined the provisions of the two Acts in review, the chairman remarked that one effect of the Primary Products Marketing mea-i sure will be that, as from August l next, the financing of all dairy produce exported from New Zealand will be • undertaken by the Reserve Bank of New Zealand on behalf of tlll : Zealand Government instead of by the I trading banks on account of the dairy companies as in the past. "The trading banks have played an important part in financing and developing the dairy industry from the inception of the cooperative scheme m New Zealand," Sir George Elliot reIminded his hearers. hut "It is not too much to say that but for the assistance given by the banks, the dairy factories as a whole would n * be in the nourishing position they aic today. In view of the services rendered to the dairy industry, it is to bregretted that the Government, infam ine its proposals, has decided to take away from the trading banks an important portion of dairy produce fi ance which in the past has been tiandled by them with the utmost satisfaction to all parties.

"The loss of the London exchange in connection with exports o» this produce will make unprofitable the working of some of our branches, the existence of which has only been justified because of dairy factory connections.'

A SiRONG POSITION The external trade returns of the Dominion and the trading banks' returns, since 1932, were quoted and commented upon. Sir George added that the total trading banks' balances with the Reserve Bank at March 30 amounted to £8 937,618, or, say, £5,600,000 in excess of the statutory balance required to be deposited. In addition, they held in London assets ■ in connection with their New Zealand business ag gregating the sum of £14,143,369 (New Zealand). The trading banks were therefore in a position to materially extend their lending operations in New Zealand. The London funds of the Reserve Bank of New Zealand and the funds of the trading banks held in London relative to their New Zealand business together amount to over £38,000,000 in New Zealand currency i position of considerable strength. Sir George then reviewed the circumstances out of which assistance was given by the Government of the day to the Bank of New Zealand during the crisis of 1894. His remarks on that subject are reported elsewhere in

his speech, Sir Georgi Elliot said that progress towards eco nomic recovery has been made durin; the year. Trade had been more active The yield from sales tax showed ai increase of 13.7 per cent, oyer the pre vious year. Building activity wa, greater, unemployment figures ha< been reduced. On provisional figures the Dominion internal revenue for th< year was £26,170,000 (exceeding esti mates by £430,000), and expenditun £25,900,000 giving a surplus of £270,00(1 "In conclusion," he said, "may I em phasise, by no means for the 'irs time, the urgent necessity of facing the fact that for New Zealand the Umtec Kingdom is to all intents and pur poses its only market. Ii due regarc ib paid to the manifest advantages per taining to a closer reciprocal trade re lationship with the Mothei Country and if that reciprocal trade relationshii is wisely fostered, New Zealand, witl its genial climate and fertile soil should find that general prosperity is not unattainable." He then moved that the report anc balance-sheet be adopted. Mr. R. W. Gibbs. in seconding th( motion, said: . "The chairman has explainet fully the variations of the figures o the year, and the results for the yea] must, I think, be considered by you al as quite satisfactory. These results havi not been achieved without very care ful management on the part of th< executive and the managers of oui various branches, and reflect grea credit on the staff for the care thej have exercised during very troubloui times. The year has certainly not beer without worry and anxiety to all coil cerned. Your representatives on th< board have been in daily touch witl our widespread business, and the know ledge gained by having passed througl various crises in years gone by hai proved invaluable in dealing with th( situation of the past few years. Th( figures of the balance-sheet show i position of great strength, and w( :iave ample funds at our disposal tc meet all ordinary requirements of oui sustomers, and I think I am right lr saying that no reasonable applicatior for assistance has been refused. Witl these few remarks, may I here men tion that my present term of offict expires next year, and I hope I maj tiave the honour of continuing to b< trusted with an oversight of our mutua interests," The motion .for the adoption of the report and balance-sheet was carnec .manimously. Mr. William Watson, shareholders director, returned thanks for his re election. ■ Mr. Stronach Paterson said. 1 lee. that it is a privilege to move, on be lalf of shareholders of the bank, <■ learty vote of thanks tQ the boarc >f directors, the general manager, anc he staff, for their very efficient and sue •essful services during the past year \s regards the board of directors, tin. notion applies not only to those mem Ders of the New Zealand and Londor aoards, and to the local Australia Erectors whose names appeal on tni. rear's published balance-sheet, but alsc o Sir Harold Beauchamp and Mr. OU /er Nicholson, who inthe past >ew iave again rendered invaluable ser rice to the bank, and the absence o whose names from the published bat ince-sheet is neither the fa " lt nor i£ •esponsibility of shareholders. T!hf lirectors and the general ma " shaping and implementing the policj )f the bank throughout the uneeitain ies of the past year, have had an ex optionally difficult j . nonths ago there was certainly p nise of improved export prices anc ? improved internal trading conditions md consequently of a less stormypas ;age than had been experienced in th< wo or three preceding yeart>. T {H' promise has been reahsed but the ad vantages have been greatly onset 3 political and financial /olume and the importance of recen eeislation, hurriedly enacted, affect n| finance and banking, are as grea .c intention, its objectives, and it: iltimate effects are at P" s ® nt d °gf Ul 'f When the Governments Budget ' "resented, and as the Goyernmen n-oceeds to implement recent le isla ;ion, this uncertainty will be dim n shed, possibly even completely dis celled. hope fob. PRUDENCE. "We can only hope that the actua cutting of the Governments polic. nto elect will be guided by prudenc* md discretion, and that the dangerous y wide powers which recent legisla ion gives to the Government will no , e used in such a way as to endanger he stability and prosperity of finan -ial and trading enterprises such a: 'his bank, in which the tself is the largest of its shareholder, md proprietors. "Meantime, this uncertainty is . rravc handicap to all commercial an. inancial enterprise, and must continui o be a very grave anxiety to the direc ors and the general manager of th« tank. We hope for their sakes, as well ls for our own, that this uncertainty vill soon be dispelled, and that they vill be able to set and pursue a course hat will result in the current year m is ereat, or even greater success than las been achieved in the past year.

"As regards the staff, there is noth* ing more essential to the continued success of the bank than that it should have a conscientious, efficient, loyal, and contented staff. Shareholders are convinced that the bank has such a staff and congratulate themselves accordingly. The staff has carried its h-rve had to be met in recent years, and full share of all the difficulties that is entitled to its full share of credit for fhe successful surmounting of those difficulties. In addition, the staff this ve?r "s faced with a difficulty peculiarly its own—but shared with the staffs of other banks operating in the Dominion Shareholders are watching with interest and with sympathy the efforts of the staff to preserve the individuality and the traditions of its profession. Whatever may be the outcome of those efforts, sliareho ders are confident that the relations of the staff to the management, and to the proprietors of the bank, will continue to be governed by mutual confidence and loyalty, and will result in efficiency and contentment.

BANK'S FUNCTIONS

"The balance figures, and your very clear explanation of them, leave noth-

ing for shareholders to question, and but little for them to comment on. '•The bank's functions arc to give the jublic efficient financial service to irotect the interest of its depositors, ,nd to make profits sufficient to pay axes, provide for all contingencies, ind return an adequate dividend to its ;hareholders. ■ The last-mentioned of hese is not the least important and inv failure of the bank to discharge his function would react to the detnnent of the whole Dominion. It is lot a crime, but a public service to nake adequate profits and jpay ac ' c ~ luate dividends. "In the past year our bank has xulilled these functions. After fulfilling ill the other functions I have menioned, the maintaining of the divilend for the past year, with a reducion in the carry-forward of only some £9000 is no mean achievement, and ; am sure that shareholders will readlv join with me in offering our hearty •ongratulations and grateful thanks to he directors, the general manager, and h Mr t3 C.' J. S. Harcourt said that Mr. stroriach Paterson had covered the 'round very fully, but he thought the 'emarks which the chairman of direcors had made with regard to the Lonlon staff applied equally to the New Zealand staff and that not only the ihareholders and the bank's customers jut the public generally were quite latisfied with the way in which they lad been met by the staff. The motion was carried with acclanation. , , .. The chairman then thanked the ihareholders for the vote of thanks hey had passed to the directors. It vas pleasant to receive the appreciaion of the shareholders of the efforts >f the directors and the staff. The general manager (Mr. Dawson) >n behalf of the staff, thanked the neeting very much for the vote of conidence in himself and the staff which lad just been passed. He also thank:d Mr. Paterson and Mr. Harcourt for he kindly terms which they had used n speaking of the staff. He himself 'elt that they had an exceedingly good ind perfectly loyal staff, and he was mite sure that they would stand by he bank at all times. The managers lad had a most difficult time during he past few years, and he thought hat they had carried out their diffi:ult duties exceedingly well. He might tate that from time to time he had ■eceived letters from the bank's cusomers, voicing their appreciation of he services of the staff.