BANK OF NEW ZEALAND

Hawke's Bay Herald, Volume XXI, Issue 50427, 3 May 1878, Page 2

BANK OF NEW ZEALAND

The thirty-third half-yearly meeting of the shareholders was held on Thursday in the Banking-house, Queen-street, Auckland, J. L. Campbell, Esq. , Chairman of the Board of Directors, presiding. The General Manager (Mr D. L. 'Murdoch) read the minutes of the last half-yearly meeting, which were confirmed.

The General Manager read the halfyearly report and balance-sheet as fellows : —

The Chairman, in moving the resolution for the adoption of the report, said : Gentlemen, — It has boen the goodjfortune of the occupant of this chair— l may almost say from the first meeting of the bank — to have only congratulatory remarks to make to shareholders, and the present occasion proves no exception to the rule. The report which has just been read will, I am sure, commend itself to you as evidence of the bank's continued prosperity, and, favorable as that report is, it would have been materially better but for special causes ; the principal one being the continued depression on the West Coast of the Middle Island, which has entailed considerable loss on the bank, but which, I am happy to assure you, has been amply provided for out of current profits. A case of default has also contributed to swell losses, but this, likewise, has been fully provided for, and it is a pleasure to assure shareholders that such cases in our experience are extremely rare — in fact, are so exceptional as to reflect the highest credit on the character of the bank's large staff. Another heavy charge upon the profits has been the necessity of extending the bank's agencies in directions which do not become immediately remunerative. I feel assured, however, that shareholders will heartily endorse the action of the board in this matter, the aim of the directors being to make this institution the Bank of New Zealand in reality as well as in name. No opportunity, therefore, islostwhich, either from present appearances or future prospects, offers a fair chance of success to extend to outlying districts the benefits of banking facilities. Your directors consider they best conserve the general interests of _ proprietors by pursuing this policy, thus enlisting the sympathies of the general public, even though at a sacrifice of immediate profits, which are not the sole aim of this institution. We are now represented at no less than 84 localities in New Zealand alone, and shareholders who have had an opportunity of seeing the handsome structures erected at most; of these places, will regard with satisfaction the comparatively small amount represented in the balance-sheet by landed property, bank premises, and furniture— an amount which does not more than represent the Jreal value of premises at head office and two or three of the principal branches ; the cost of the whole of the remainder having been defrayed out of profits. Shareholders, I am confident, will confirm the action of the board in recommending a further addition of £25,000 to the reserve fund, which, with such addition, will stand at the gratifying sum of £325,000. Nothing can more conduce to increase public confidence in the institution than the continued evidence of the shareholders' desire to strengthen their reserve rather than increase their dividend ; and when we consider that we have made a return of 15 per cent, for the past eleven years, with two exceptions, when a reduction of 2£ per cent, was made, and that your reserve fund has within that period grown from £150,000 to its present amount, there cannot be other than a feeling of satisfaction at the policy pursued by the board. The figures in the balance-sheet will commend themselves to shareholders as evidence of a progressive business. Their magnitude, and the consequent heavy responsibility devolving on your board, have a not unimportant bearing on a question which will come before you at a special general meeting, to be held immediately after this one closes. There has been an increase of circulation, deposits, and other liabilities, of about £730,000, while advances under all heads show an increase of about £800,000, other balances remaining much in the same position as in last statement. Allow me to invite your attention to a very noticeable feature in the records of banking in the adjoining colonies, which has a reflex influence on the business of the banks in New Zealand. The sworn averages of the banks shew, that during the past year, in Victoria alone, there has been the vast expansion of three and a half millions in advances, against an increase in deposits of little over one and half millions, and there is no compensating feature in the published averages of other colonies, — in nearly all of which a considerable proportioon of each bank's capital appears to be employed. The effect is seen in this colony, in the extreme rates offered for deposits, a policy, which though necessary to adjust the capital accounts of \ foreign banks, is certainly not calculated to promote the interests of New Zealand, and the consequence of which must inevitably be a growing scarcity of money, and . dearer rates for it. So far as prudence will allow, we protect our own deposits ; but with such a pressure in the foreign banks, no effort of ours can prevent a large amount of the otherwise available capital of this colony finding its way to adjust balances in the neighboring colonies. It may be within the recollection of shareholders that, at the general meeting held on the 28th April, 1865, it was in contemplation to initiate within the bank a guarantee and . provident fund for the officers of the establishment, and to which the directors recommend the bank should contribute. In consequence of the attention of the board having shortly afterwards been called to the apparently superior advantages of the Colonial and Foreign Banks' Guarantee Fund, in London, it was decided to support it in preference to the intended fund within the bank, a decision which has long been regretted. Experience has proved that, if the original intention of the board had been carried out, the fund would now have amounted to such a sum that would not only have given ample security to the bank, but would have afforded a certain prospect of reasonable provision for officers, who, from old age or ill-health, are obliged to retire from the service. The directors now propose to revive the idea of the guarantee and provident fund, but as the great majority of the staff are already guaranteed in the London fund alluded to, and are not liable to be called upon for further contribution (unless under circumstances not likely to arise), they cannot with any fairness be now asked to contribute to more than the provident branch of the proposed fund. To enable the intended fund to start with a fair prospect of success, a liberal contribution will havo to be made by the bank. The subject has been forced on the consideration of the board by the necessity for already making some provision for officers retiring from the service under circumstances which demand recognition, and as the necessity for such provision will be a growing one as the age of the bank increases, the expediency of providing a fund from which such claims can be met, appears not only reasonable, but almost compulsory. Details have not yet been sufficiently worked out to justify the board in saying what contribution will be made to the fund, but it has been thought proper to invite the opinion of shareholders, in case it should not be in accord with that of the board. It is intended that henceforth all officers joining the service will be guaranteed within the bank, on terms somewhat similar to those of the Colonial and Foreign Banks' Guarantee Fund. From past experience it may be reasonably hoped that a fund will soon be accumulated which will afford ample security, and as the success of the

provident fund will in a great measure depend on the absence of claims on the guarantee fund, the staff will have a personal interest in noticing the acts and habits of fellow-officers, and will feel that any irregularity remaining uncorrected may entail future personal loss. In conclusion, I have a pleasure in recording the continued rapid growth of the colony in population, wealth, agricultural and pastoral prosperity, a growth which gives confident hope that, as in the past, our business in the future will prove progressive and remunerative. No better proof of the developing power of our railway system can be adduced than the rapid increase in the price of freehold lands, and no better proof of the prosperous circumstances and improving position of our population than its ability to acquire freehold homesteads. Amidst a prosperous community banking must prosper, and your directors claim to have carried out the policy of encouraging all to look for legitimate accommodation according to their means, a policy justified by results, and warranting that continuance of support from the public which has always been so liberally extended to the Bank of New Zealand. With these remarks, 1 beg to move the adoption of the report and balance-sheet.

Mr Firth, in rising to second the adoption of the report, said : I shall have very little to say in seconding this resolution, inasmuch as the figures laid before you show with great clearness the position of the bank, the extent of its operations, and their result with regard to profit. This is done, in my judgment, as clearly as it can be done. The remarks of the President have also elucidated the operations of the bank, leaving very little to be said in addition. There are, however, one or two points which, with your permission, I should like to notice. Among the remarks made by the President was one to the effect that in the neighboring colonies there is a difference of some two millions as betwixt the deposits received by the Victorian banks, and the advances made by them. This extraordinary discrepancy is likely to have a more or less adverse influence on banking operations in this country. It may have arisen, I think, from the circumstances of the colony of Victoria and the adjacent colonies having suffered much during the last two years from unexampled drought ; this fact entailing; great losses on the constituencies of all banks requiring great support from these institutions to be given to their constituents. Every one present will be aware that this colony has not been exposed to any such severe periods of drought as the neighboring colonies have suffered from time to time. With the genial climate and fertile soil of this colony, we may expect a fair share of prosperity in the future to an institution like this, whose fortunes are bound up with the interests of the country. There is another matter in connection with agricultural operations of this country, which has been already referred to by the Chairman. It is a matter of great importance, indeed, when we are considering the future of institutions of this description. This is, that owing to advantages of climate, and other favorable circumstances, it has been found possible to aid in giving to the land a perennial fertility, inasmuch as by rotation of crops it has been found possible to preserve the growing powers of tbe soil from season to season. In the neighboring colonies this has not been found possible, the greatest difficulty being found in those countries to raise root crops and artificial grasses. To take South Australia, for instance, which is shut out from growing other crops than wheat, the effect of this means that it has to export one of the main elements of its future prosperity, having little else to put in its place, sending away from time to time a most important element of its wealth in the shape of cargoes of wheat, which are not replaced by any other produce. We need not, when we regard these circumstances, be surprised to find that, while this year's yield has been on the whole equal to the average in the other colonies — 7f bushels to the acre — in this colony, taking the statistics for Canterbury alone, based upon the returns already made, the yield has been at the rate of 23 bushels to the acre. In this province I have not seen any returns, but my experience enables me to arrive at a closely approximate estimate ; the average yield has been 32 bushels. This is a result due to the advantages I have spoken of, the genial climate and the fertile soil with which we are here blessed. 1 look forward, therefore, to the future prosperity of this institution, based as it is on such a solid foundation as that indicated by the natural advantages it possesses. Having just returned from a visit to the Southern portions of this colony, I am well pleased to be enabled to state that I beheld there the elements of the highest prosperity and wealth. I can confirm the remarks made by the President with regard to tlie buildings of this bank, having had an opportunity of inspecting a great many of them. I must say the selection of the sites reflect the greatest credit upon the early friends of this bank, inasmuch as they are placed in the very centres of business of the towns where they are erected. Tliey present all the appearance of the substantial and commodious structures, and would not disgrace any banking corporation. I have no doubt they are worth more than the amount set down against them. I have great pleasure in seconding the resolution, that the report and balance-sheet be adopted. I have no doubt that by means of the careful and "wise management which has hitherto done so much for the institution, we may expect still greater profit to tlie shareholders, and not only to them but to the country at large — upon the advancement of which, as a basis, the operations of the bank will have to depend. The resolution for the adoption of the report was put and carried unanimously. auditors. On the motion of the Chairman, seconded by Mr A. K. Taylor, Messrs. G. P. Pierce and B. Tonks were elected auditors, in the room of Messrs James Watt, resigned, and J. C. Stone, absent from the province. Mr P. Dignan moved a vote of thanks to the directors and officers of the bauk. Mr James Robertson seconded tlie motion, which was put and carried unanimously. The Chairman returned thanks on his own behalf. Mr Murdoch, in returning thanks for tho officers, said : It affords me great pleasure, on behalf of the staff, to return our thanks for your vote. 1 cannot, on behalf of the staff, promise more in the future than we have done in the past, because I should be sorry to think that among our numerous staff there is one officer whose heart is not in his work. But, encouraged by this renewed expression of your confidence in us, I may safely promise that our combined efforts will be used to make the future success of the institution as conspicuous as it lias been in the past. Nothing can more conduce to this than your continued expression of confidence in the staff, and the unvarying kindness with which we have been treated by your directors. I have much pleasure in again thanking you for your vote. special meeting. The meeting was made special for tlie purpose of confirming the resolution proposed at the last half-yearly general meeting, to the effect, " That in clause 50 of the Articles of the Deed of Settlement, in lieu of the words ' one thousand,' the words c two thousand five hundred ' be inserted. It was necessary that one-third of the capital of the bank should be represented in person or by proxy, and Messrs Hill and Tonks were appointed scrutineers, to ascertain whether the meeting was properly constituted. Tho scrutiny having been declared in effect that there were 29,500 shares, represented at the meeting,

the Chairman declared the meeting legally constituted for the performance of the special business, and moved the resolution. Mr Tonks, in seconding tho motion, said he had, since making tho proposition, spoken to several of the sh; upholders on the subject, and they agreed with him that it was high time what he saiggested should be dono. It was to the interest of the bank that the shareholders should do full justice to their directors.. He had great pleasure in seconding tl?ie resolution. The motion was put and carried unanimously. This concluded the business of the special meeting.

Thirty-third Rbpoht of tub Dihkctohs of tub Bank OY NEW ZKAbAND, TO TUB HAIiF-YEARLY GENKRAIi jlebting ok tub proprietors, hkm) at tub Banking-house, Auckland, on Thursday, 25th April, 1878. The Directors have much pleasure in again meeting 'shareholders with a favorable report, which affords evidence of continued progress aud success :— The net profltat3!st March, after making ample appropriation for all bad or doubtful dependencies, and for reduction of bank premises and furniture, amounts to . . . . £82,567 19 4 To which has to be added— Balance of undivided profit at 30th September, 1877 £1,790 4 5 Making a total available for division of £84,358 3 0 The following appropriation of which is. now recommended— To payment of division at the rate of 10 per cent. per annum £36,250 0 0 To bonus of 5 per share, equal to 5 per cent. per annum .. .. £18,125 0 0 To proposed increase to reserve fund.. •• £25,000 0 0 To balance carried to profit and loss new account .. •• £4,983 3 9 £84,3.13 3 9 ■ The dividend and bonus will be payable at the head office, Auckland, on Friday, the 2o'th April, aud at the branches on receipt of advice. For the Board of Directors. J. Looan CampbkMi, President. ' aoorkoatb balakck-Bhkrt of tiik bank ok nkw ZkaiiAKd at 31st March, 1878, ikcludino London Office at 31st January, 1878 :— Dr. £ a. d. Bank Stock 725,000 0 0 Reserve Fund 300,000 0 0 Notes in circulation 502,557 0 0 Bills payable in circulation . . „ 2,138,074 S 5 Deposits and other liabilities.. .. 0,800,070 4 9 Balance of profit and loss at September 30, 1877 1,790 4 f> Net profit for half.year 82,507 1!) 4 £10,550,059 13 11 Cr. £ s. d. Coin and cash balances . . . . 972,834 (i 9 Bullion on hand and in Uansitu . . 452,880 11 0 Government securities 770,000 0 0 Bills receivable, and securities in London 2,073,101 14 10 Landed property, Bank premises, furniture, &c. . . 124,311 15 4 Bills discounted,- and other debts due 'I to the Bank 0,157,528 C 0 ' , . £10,550,659 13 11 PROFIT AKD LOSS ACCOUNT. "' Pr. £ s. d. To dividend at the rate of 10 per cent. „ „ per annum 56,2r»0 0 0 .To bonus of 5s per share . . . . 18,125 0 0 'To 'proposed Increase to reserve fund.. 25,000 0 0 To balance carried to profit and lossj -;: .;.',' new account " „ .. „ 4,983 3 9 £84,358. 3 9

„ Or- £, ad. By balance of profit ami loss at 31st Marc}), 1878 82,50? 10 4 By balance from last half-year 1,700 4 5 £84,358 3 9 RBSEHVK FUND. Dr. £ a a. To balance 325,000 0 0 £325,000 0~0 Cr. £ s. d. By balance from last statement . . 300,000 0 0 By proposed addition 25,000 0 0 Audited i^0"0~O