THURSDAY, JUNE 20, 1912. THE BANK OF NEW ZEALAND.

Hawera & Normanby Star, Volume LXVIII, Issue LXVIII, 20 June 1912, Page 4

THURSDAY, JUNE 20, 1912. THE BANK OF NEW ZEALAND.

It has been well said, that although money is an agent created by man, yet he knows comparatively little about its operation. As a general fact, however, David Hume's definition stands the test of experience, aiid money certanly operates as an oil which smoothes and quickens the action of the wheels of industry. In proportion as it does this scientifically, it prospers itself, and helps industry to prosper also , as a matter of course. For a practical illustration of this we need only turn to the report of yesterday's annual meeting of the Bank of New Zealand. The annual balance-sheet and the statement made by the chairman, Mr Martin Kennedy, both appeared in yesterday's Star. The net profits for the year amount to £331,182, as compared with £295,270 last year, and for the year, on all the shares of the Bank, the directors pay a dividend of 15 per cent on ordinary shares, and of 10 per cent —the statutory limit —on preference shares. The wage thus earned by capital is substantial. Yet the Bank has been doing a studiously cautious trade in money, and steadily adding to its reserve fund, which six years ago stood at £81,294, but, with a transfer of £200,000 from the year's net profits, is now brought up to £1,200,000. This shows that the Bank's policy Is marked by much caution, i though not sterilised by it. In ract, it is made clear by the steady increase in the Bank's business and by its earnings, j that the Bank —in Mr Kennedy's words —has "responded reasonably to the j calls" made upon it by the men who enter on legitimate enterprises and con- ] duet progressive industries. This is the true gospel of the employment of money, and the Bank's own operations prove how satisfactory are the results j which follow upon it. And there is sub- ] stantial assurance that as the recent past has been, so will the immediate j future be: for, as Mr Kennedy says, I the Bank's present policy is "to maintain itself in a position to meet the legitimate requirements of its established I connection and of the dominion's industries and trade." So long as this policy is faithfully followed, the Bank will continue to prosper, and the material pro- | gress of the country will be proportionately helped through its instrumentality. It is true, that banks play only a modest part in this connection, for in a country like ours much depends on i the promotion of settlement by the! State, and, as Mr Kennedy himself points out. the State cannot act effectively in this matter unless it borrows in the outer markets and spends with spirit no less than with prudence in bringing Crown and native lands —by nieans of roads, railways and so forth — into productive occupation, and acquiring other lands for closer settlement. Of course, when production and industry are thus added to, the banks stand to gain along with all other businesses in the country, and it is incumbent on them, as well as on the Government, to qualify their prudence by a generous spirit in their dealings with' men of sense and character actively interested in reproductive investments. Speculation or encouragement in speculation spells rain, as the Bank of New Zealand itself has_ occasion still to remember ; but with sure markets and good prices for the country's staple products, with progress in settlement and expansion in industry, surely a bank's right attitude to present and prospective customers should be one of frank or even inviting sympathy. The Bank of New Zealand's own policy with respect to" new branches and agencies is described by Mr Kennedy as one expressive of a desire on the Bank's part to meet the growth of settlement, and doubtless,.while loyally adhering to the principles of prudence, the directors will cultivate and maintain a similarly generous disposition towards all men of the right stamp to whom its assistance would be invaluable in their own legitimate interest and in that of the country. Of course it will do this, for its directors know that, by doing it, they will gain for their invaluable institution increased confidence and increased custom.