BANK OF NEW ZEALAND

Hawke's Bay Herald, Volume XXI, Issue 5527, 1 November 1879, Page 2

BANK OF NEW ZEALAND

The half yearly general meeting of sharelioldcrs was held on the 23rd inst., John Logan Campbell, Esq. (Chairman of the Board oE Directors) , presiding. There was a large attendance of shareholders.

The Q-eneral Manager read the advertisement announcing the meeting, also the halfyearly report, as follows ' — Thirty-sixth Report of the Directors of the Bank of New-Zealan : , to the Half-yearly General Meeting of the Proprietors, held at the Banking-house, Auckland, on Thursday, 23rd October, 1879. The Directors beg to submit the result of the past half-year'a operations, which will, no doubt, be considered satisfactory. The net profit at 30th September, after making ample appropriation for dependencies, considered bad or doubtful, and the usual reductions in Bank premises and furniture, accounts, amounts to £09.033 14 0 To which has to be added — Premiums on 25.521 New Shares taken up, part of 27,509 issued under authority of the Half-yearly Meeting of the Proprietors, held on 2!) th October, 1878 180,613 15 0 Balance from half-year ended 31st March, 1579 9,733 11 0 Making a total available for division of £200,406 1 0 Which it is now recommended to be appropriated as follows :— To payment of dividend at the rate of 10 per cent, per annum 40,010 10 0 To bonus of 5s per share, equal to 5 per . cent, per annum .. 24,505 5 0 To proposed addition to reserve fund . . 180,000 0 0 To balance carried to profit and loss new account .. .. 5,800 6 5 £259,406 1 6 The dividend and bonus will bo payable at Head Office, Auckland, on Friday, the 24th October, and at Branches on receipt of advice. For the Board of Directors. J. Loqan CAurßßiiL, President. Aggregate Balance-sheet of the Bank of New Zealand to 3Oth September, 1379, including' London Office at 31st July, 1879— Liabilities. Dr. £ s. d. Capital £1,000,000 ; less £19,730— par value of 1970 New Shares of £10 each, held in reserve 980,210 0 0 Reserve Fund 375,000 0 0 Notes in circulation 405,105 0 0 Bills payable in circulation . . . . 1,486,557 0 5 Deposits and other liabilities .. .. 6,658,287 13 8 Balance of profit aud loss 259,406 1 s £10,224,625 15 6 Assets, Cr. • £ a. d. Coin and cash balances at Bankers . . 2,054,648 19 4 Bullion on hand and in transit . . 214,075 10 6 Government securities 200,000 0 0 Bills receivable and' securities in London 884,729 6 11 Bills discounted, and other dobts due to the Bank 6,684,624 15 0 Landed property, Bank promises . . 186,547 3 3 £10,224,625 10 6 PROFIT AXD LOSS ACCOUNT. Dr. £ b. d. To dividend on 98,021 Shares, of £10 each, at the rate of 10 per cent. per annum. 49,010 10 0 To bonus at rate of 5s per share, equal to 5 per cent, per annum . . 24,505 5 0 To proposed increase to reserve fund 180,000 0 0 To balance carried to profit and loss, "new account" .. .. .. 5,890 6 5 *259,406 1 5 Gr. £ s. d. By balance from half-year ended 31st March, 1879 9,703 11 8 By premium on 25,521 New Shares, taken up, part of of 27,500 issued undor authority of the half-yearly General Meeting of the Proprietors held on the 29th October, 1878 . . 180 Cl 315 0 By net profit for .half -year ended 30th September, 1879 09,038 14 9 £259,400 1 5 EESHRVE FUND. m , Cr - SB.il. To balance „ „ „ 555,000 0 0 £555,000 0 o Cr. £ b. d. By balance from half-year ended 3Jst March, 1879 375,000 0 0 By proposed increase 180,000 0 0 £955,000 0 0 Audited, f Brkjk. Toxks. I Joseph L, Wilson. The Chairman, in moving the adoption of the report and balance-sheet, said : — Gentlemen, In rising to move the adoption of the report and balance-sheet which have just been read, the usual pleasant duty is assigned to me of congratulating shareholders on the success with which the bank's business has been conducted during the last half-year, and the balance-sheet affords the best evidence of the "maintenance of the bank's position. When I last had the pleasure of addressing you from this chair. I took occasion to recount certain adverse" influences which then existed, and which for the time being had unfavorably Affected colonial interests, Bub we had not

then fully realised tlie effects of the disasters of the previous period, nor did we then anticipate suck an unfortunate result in the agricultural operations of this colony, nor such a long continuance of low prices for wool and cereals which has since prevailed. The diminished spending power of the people, the contraction of Government works expenditure, the necessity to pro vide large remittances to England for public and private liabilities of the colony, have all had a tendency to increase the pressure on our monetary institutions. But the absence of any heavy failures sufficiently proves the readiness with which these institutions responded to the demands made upon them, and it is the best proof of the general soundnoss of the commerce of the country. As a consequence of the lavish orders which a previous season of unexampled prosperity had induced importers to send to England, and tho diminished consumptieii from tho causes to wliich I have alluded, stocks have in many cases accumulated to an inconvenient extent; but the corrective measures which have now long been in operation are already producing an appreciable effect, and we may confidently look at an early date to have this temporary difficulty fully remedied. The past season has been one of unusual severity to agriculturists, who, in many ciscs wore overburdened by speculative purchases of land ; and this, in conjunction with the bad harvest and low prices, has caused not a few failures among this class of the community. But though numerous, they have not involved any serious amount, and with the improved prospects for this season — in the exceptionally promising condition of the growing crops, and the enhanced price of wheat — it may be reasonably expected that much of last season's loss to our farming population will this year be recouped. As affecting this institution, although we have as usual been exposed to exaggerated reports of heavy losses, I am happy in being able to assure you that these have mt exceeded the average", and ample provision has been made for them. When I last addressed you I reported the result of the issue of the new shares which had been only partially completed. The fmal result, as noted in the balance-sheet, is that of the 27,500 shares offered to shareholders we are left with only 1979, which have not yet been offered for sale, but which tho directors will take a favorable opportunity to realise. From t^c public prints shareholders Avill have been made aware that we have given notice of our desire at the end of six months from tho Ist inst., j to terminate the existing agreement as to the Government account, the terms of which have proved of a disadvantageous character. Beyond a mere acknowledgment of our notice, no indication has yet been given of the intentions of the Government, which is sufficiently accounted for in the present political complications, which practically have brought public business to a stand. While prepared for a severance of the connection, which on the whole has existed so satisfactorily during eighteen years, we have intimated that we arc willing to negotiate for a continuance of the account, if terms can be satisfactorily arranged. The Directors have given much consideration to this subject, and in the course they have adopted are assured they best conserve tho interests of the shareholders. Eef erring now to tho figures in the report and balancesheet, shareholders will, I am sure, be pleased to find that, notwithstanding the largely increased amount of capital on which dividend has to be paid, the profits of the last year admit of the usual dividend and bonus, and we are able to carry forward to next hnlf-yeur the sum of £5890 6s sd, after crediting reserve account with £180,000 — the premium on the issue of the new shares, as far as these have been floated. The anticipation of a reduction in dividend has had a depressing influence on the prices of shares, but the Directors arc glad to assure shareholders that although the net profit shows a diminution on the previous half-year, owing to the increased provision which the present condition of tho colony makes it expedient to put aside for possible losses, the usual dividend and bonus is confidently expected to be maintained. The untoward state of the colony .during the past six months, and the fact that during that portion of the year business is always less active than during the wool and grain season, will sufficiently account for the diminution which appears in some of the items in tho balance-sheet. There has been a reduction in the note issue of about £60,000, and of over £800,000 in bills payable in circulation, which, although resulting in lessened profit, may be accepted as the best evidence of the measures adopted by importers to reduce theiu too heavy stocks. There has been a reduction in current accounts of a little over a million, which is largely due to fluctuations in Government balances, the remainder being the natural outcome of the general depression caused by bud harvests, low prices, and reclamations on consignments of wool and grain. The condition of the home market having been favorable for the realisation of securities, advantage was taken of the opportunity to realise the bulk of the Government bunds held by us at last balancing period, and the proceeds have been temporarily utilised in strengthening our coin and cash balances at banker's, pending a favorable opportunity for re-investment. Our coin in the colony at date of balance amounted to about £900,000, and at the Bank of England £1,100,000. Our lessened liability in London accounts for the diminished amount of bills receivable and securities held there. The contraction of our advances, it will be seen, approaches the decrease in our current accounts, to which I have already referred, and is in a great measure the effect of largely diminished purchase of bills in London drawn on the colonies — another evidence of the wholesome and timely check given to a previously too-extended importation. Shareholders will have reason to be gratified at the large addition proposed to bo made to our reserve fund, which will now stand at £555,000, and to which it will be the policy of the Board to continue to make such additions from time to time as our profits may warrant. Every addition to this fund not only increases tha intrinsic value of your shares, but increases the dividend-earning power of the Bank. We have been asked from time to time whether there is any special investment of this fund. I need hardly tell you that there is no uniformity in the practice of Banks on this subject, but the majority follow the course we have adopted of making no special investment of the reserve fund. Practically, although it swells the general dividend-earn-ing power of the bank, we usually hold Government securities to a larger amount than the reserve fund, and, though at present this is not the case, the deficiency is more than represented by the largely increased amount of coin and cash at banker's. I assume that the real purport of the question is, docs the bank hold such reserves or immediately convertible securities, as afford reasonable protection in all contingencies ? and I think no one will doubt this if the balance-sheet put before you to-day is. examined and understood. Another question has been asked : Does the bank hold any shares in any unlimited company? The answer is simply that it most certainly does not. It has also been asked if it is intended to register under the Bank Act which is now being considered in England, but as our liability is already limited under an Act of Incorporation, and we have no information as yet of the provisions of the proposed Bill, no consideration has been given to the subject. It remains for me now only to close these remarks, and I may be permitted, in retiring in ordinary rotation as one of your Directors, and consequently vacating, the President's chair, to embrace the present opportunity to express the conviction I entertain, that the severe check which the colony has sustained during tho past year will be attained with the most beneficial results to the community generally, as tending to lessen the over-specidative spirit which previously existed, and to lead all engagod in business to confine their operations within more legitimate limits. We have in the colony of New Zealand every element which leads to and secures prosperity. Climate alone would ensure its future greatness, for we know by statistical proof that no country in the world lias greater agricultural and pastoral capabilities. And it is the colony upon which both tho capitalist and the labourer in the mother country now look with longing eyes as the refuge where to find a new field of enterprise, and create a new homo. With the progress of the colony, which nothing I feel assured can retard, will also progress this institution, and should you at a future time again do me the honor of electing me to a seat at your Board, I have no misgivings but I shall then find this bank still maintaining, under my successor, the position of precedence which, I am proud to ' say, it held when it devolved upon me to oc- i cupy this chair, aud which it still holds on

my retiring from it. I now beg to move "The adoption of the report and balance S IMp1 Mp J. 0. Firth in seconding tho motion said • There is the less reason for my offering to the shareholders any lengthened observations, as the very full address of the PW^J* will have already made you aco^aintccl with a great many of the conditions which have affected this institution during the past six months genial souon tlttoush which ye arc now yield than for years past, and it is the genrnJ i opinion of those most capable of giving a* ::; ««* *» ir r^i^ss; ss an agricultural and pastoral po*.nt ot view, v^ eve ££ bSer. We'have all been an tl gating for a considerable period a »™f notwithstanding tto }^ W JScSkl vulod in respect to the production ot colonial W There £ l'ttle doubt, so far as wool is tnool. xnere is i. . been concerned, a revival ot uauc ji" o , , a termination. We ma V, I for ward, looking to the /.» P"*'™ a revival of trado at no dn Jho coltnv X rate there is likely to acorn. * advantage arising from the -^J^St through which England lion PJ B f'\^X still passing, which Will be ten. nd ™ * - s nnd gmtion from the mother couiltn . . g ukoly other colonies, an emigration TO , o goi , fc to embrace an extremely valurtbx " ' . colonists. I refer to English former* ». "'" i laborers. I may state that there «1, its way a deputation from Lincolnshire f»> — the* " -puUition representing, perhaps »v 400 or 500 farmers and their families— -w.

are sent out to this colony to inspect its capa- ' bilitics and to report thereon with as little delay as possibla. Sliould the report of the deputation be favorable— as there is little doubt that it will be— it is probable that a largo number of farmers from what may be called the " garden oi ! England " will soon arrive in the colony. All these immigrants to this country, having money in then- pockets, i and skill "and knowledge to employ their capital to the greatest advantage for themselves andfor the whole community, will be so valuable an accession to our population that it is not necessary for me to say more on the subject. Another advantage winch the colony will obtain, as- it appears to me.irom the recent temporary depression, will be the information that will suggest economy uid greater caution on all sidW, as coti n P ared wl j Jl the periods of good times tfrtd gb^d trade, in conducting alike the individual aa<c6 general affairs of the colony. I cannot bttt thrift* that, these two elements — better information) ajntl the practice of economy — will be attended with the happiest results in the future vthen the good times return. I have to congratulate you upon the favorable report that has been laid before you, considering the extreme difficulties connected with banking business during the last half-year, I hope that we are on the eve of better times, and that this Bank will continue to occupy the high position that it has hitherto held. (Hear, hear.) The General Manager explained that the audit was signed by Mr J. L. Wilson, in consequence oii the rather sudden severe illness of Mr Samuel Browning. There Avas no possibility of obtaining the services of Mr Samuel Browning within the time necessary to have the audit ready for the half-yearly meeting, hence Mr J. L. Wilson was selected, and every shareholder would acknowledge that gentleman was thoroughly competent to discharge the duty. (Hear, hear.) The motion for the adoption of the report and balance-sheet was put from the chair and carried .unanimously.