BANK OF NEW ZEALAND.

Marlborough Express, Volume XLII, Issue 151, 27 June 1908, Page 5

BANK OF NEW ZEALAND.

ANNUAL MEETING

THE CHAIRMAN'S REVIEW

LAND AND jiABOR OUTLOOK

Onawi association.]

WELLINGTON, June 26. Mr Harold Beauchamp, Chairman of Directors of the Bank of New Zealand, in moving the adoption of the report and balance-sheet at the annual meeting, said that in pursuance of the policy outlined last year the directors desired to build up a strong reserve, and had allocated £200,000 out of this year's profits, making the total £450,000, and with the amount carried forward £504,097. There had been a gradual expansion in deposits, and as the rate was recently raised by a half per cent, the amount would probably be increased. Of late years a large portion of the surplus funds had been invested in short loans and other liquid securities in LondonOwing to the demand this year in the Dominion, better rates were procurable than in London, but the' directors still held that it was most desirable to1 maintain a strong position in that city*. Surplus funds could be readily utilised there, and by reason of the liquid nature of the investments were readily available when wanted here. A certain amount of stringency had been experienced in the local market since the beginning, and rates' had hardened, the recent fall in produce being a cause. The Bank was pursuing a conservative policy, the aim of the directors being to meet the legitimate requirements of their own customers. ■'■ ■ } Since the Assets Realisation Board s account had been, taken over,in; 1906, the amount had been reduced- from £832,457 to £437,780, at which figure it stood on June, 15. Their Colonial Bank property and premises had been reduced to a few hundred pounds, arid now disappeared, being merged in the general premises account. The directors had submitted the state of the provident fund to a London actuary, with a view to strengthening it to enable more liberal provisions to be made for retiring officers. Upon his advice, £5669 was paid into the fund, and it was the intention of the Board to continue this each year while the conditions permitted. The pension fund now compared very favourably with that of other banks, and would help to attract able officers. Pensions would also be provided for messengers. The Chairman devoted some time to the recent fall in prices consequent on the American panic, which) he estimated at more than a million and a half sterling. This would affect land values, and a drop in some respects would be no evil, especially in building land. For farming land there was still an excellent demand, and prices would probably rocede a little when the effect of the graduated land tax was felt and native areas came into the market as a result of the Land Commission. - / '

The labour outlook, lie, admitted, was not so rosy as last year, but after ten or twelve good years the community could stand a light business check without trepidation. He quoted figures showing an increase in the national wealth and a decline in bankruptcy '■■ returns, which, he said, proved that at no period were we better situated to face a set-back. He did not believe that•■? it would last long. From1 America the report's were reassuring, and- money ljad cheapened in London; still, caution should be the watchwprd. Some houses had been over-trading and indiscriminate in, giving credit, ,and farmers had been paying an excessive price for land. The Government had appointed Mr J.iJB. Reid, a director, vice Mr F. de C. Malet, who resigned in consequence of . V •

In recognition of the good work of the staff, the Board had granted a bonus of five per cent, on salaries. Mr Watson, who seconded the motion, said that when he first' became connected; with, the-Bank , m 1894 it was his unpleasant duty to report to the Colonial Treasure^ that oat of £11,000,000 of so-called \ assets less than half were profit-earning, while interest was being paid on deposits etc., aggregating £6,366,000. Now they had profit-earning assets of over £15,000,000, all sound "and good, against an interest-bearing liability of about eight millions. ■ Thife' showed what an uphill"battle'-they,had fought. To-day their profit was over £300,000, and no doubt shareholders might think that they were entitled to a better return for their money. He did not believe that they would have to wait much longer, but they wanted a solid reserve fund first. If they could build that up and pay increased dividends he would be in favour of doing so. More capital, however, would be required in if uture. He explained the position of the Government and the shareholders, and quoted a speech of the, Prime Minister's last session to show that the Government had no intention of interfering with the shareholders' rights. The Government guaranteed a million stock, and had four directors to the shareholders' two; but when that stock was paid off it wasi reasonable to suppose that the shareholders would have more representation—in fact, he thought that they should have more now, though he recognised that the' Government should have efficient checks and fair representation on the directorate.

Mr Beauchamp, in acknowledging the vote oi thanks, read a report from the manager of the Bank's Produce Department in London, dated April 15, ascribing the fall in wool to the American panic,, and stating that relief was looked forward to from the same quartet at a not" very distant date. The -position in the United States was gradually improving, and wool would oe one of tne first commodities to benefit. It was. espected that the meat market would benefit from the influx of visitors to London drawn by the Franco-British Exhibition.

Mr John Mills,, of Port Chalmers, congratulated the Board on the bal-ance-sheet and the satisfactory position of the Bank.

Mr G. Kebbel thought that small depositors should receive more consideration, and that the Bank should pay a higher rate of deposit interest. Mr Martin Kennedy, one of the shareholders' directors, supported Mr Watson's views, and thought that the shareholders should receive a greater dividend. He hoped that the snareholders would soon have more equitable representation on the Board. It was anomalous that while' they owned two-thirds of the Bank they had only one-third of the representation on the Board.

The Chairman did not think that the present time was opportune to increase the dividend. It was a matter, however, which naturally must be taken in hand, and receive the serious attention;of the Board ; but up to the present it had not ; engaged the Board's attentions, as the Board, he thought^ until it had brought up the

reserve fund to such a figure as would compare with other Banks, would be unwise to pay a higher dividend. A motion to increase the directors' remuneration was, at the request of the Chairmajk, withdrawn. After the report and balance-sheet had been adopted and a vote of thanks to the staff passed, the meeting terminated.