BANK OF NEW ZEALAND.

Northern Advocate, 18 June 1920, Page 3

BANK OF NEW ZEALAND.

WELLINGTON, This Day.

The ordinary general meeting of the proprietors of the Bank of New Zealand was held at the head office, to-day when iMr H. Beauchamp, chairman of directors, presided.

The chairman in moving the adoption of the report and balance sheet, gave the following review: —

Capita1.;—£2,627,441. Increase £347,453. —This increase represents the amount paid up by shareholders in advance of due date in respect of the call made an 9th January last on the Ordinary Shares No. 1 to 150,000 inclusive, the circumstances and conditions of which were mentioned at our meeting on 12th December last. It will be seen that a large number of shareholders availed themselves of the option allowed them of paying up the amount of the call before the due date (Ist April) under rebate at 5 per cent, per annum, the whole call, with the exception of £152,546 13s 4d, having been received at the balance date. I may mention that of that amount only £44,261 remained unpaid at 2nd instant. Our issued ordinary capital is now £1y500,000 and the amount paid up, in respect thereof, at 2nd instant was £1, 455, 739.

Reserve Fund.—£2,350,000. Increase £150,000. —This increase is the amount added to the Reserve from the profits of the year ended 31st March, 1919. As will he seen by the Report in your hands, we now propose to increase the Reserve Fund iby another £150,000, making the total £2,500,000.

Notes in Circulation.—£s,76s,337. Increase £2,037,088— The greater part of this increase is represented by notes not "circulating" at all in the sense of being in the hands of the public. They are notes of ours in the hands of other New Zealand ißanks; paid to them in settlement of jExlchanges. During the period of the commandeer the transfers of Government moneys in payment of oroduce have passed through us as the Government's bankers and large amounts have, as a consequence, occasionally to 'be paid over in settlement. Adjustments are made with other Banks at short intervals by paying in London in redemption of notes issued to other Banks in the Dominion. Sometimes, particularly .when a Local War Loan has been raised, the balance has been turned \in our favour and we have been holders of other Bank settlement notes, but at present the balance is aigainst us, bence the.-large increase shown. I mention the matter in order to guard, against any misapprehension arising in regard to undue inflation of the New Zealand cur-., frency. I do not think there has been any such inflation here. The increase since 1914 in the amount of the notes circulating in New Zealand, is, I think, mainly accounted tfor by two factors: firstly, the gold (Which people used to carry about 6i keep by them has found-'tf way into )the Banks and been replaced by motes; secondly, our exports have very largely exceeded our imports. lOiwing to exchange conditions, a large part of this surplus has accumulated in Britain, but neither the iexporter, the producer, nor the worker has had to wait for payment; these have received large payments or liberal wages, and it would be remarkable if their posperity had not caused an increase in the circulating medium of the country. I would point out that magnitude does not necessarily mean inflation.

Deposits.—£37,66l,6lo. Increase £5, 945 2i58.—-"This increase reflects the prosperous condition of the country, and will be more fully dealt with at a later stage of my remarks.

» Bills Payable and other Liabilities. —£3,708,306. . Increase £847,915. — An ordinary fluctuation which calls for no special remark.

' Reserve for Taxes. —£340,000. — | A new item in the Balance Sheet, although not entirely a new provision, since in view of the heavy liability to which the Bank is subject for taxation, it had been deemed prudent ito accumulate a Reserve, against it. .This Reserve is sufficient to cover the estimated liability for one year in respect of Income Tax, and it has been decided to show, it as a separate item in the Balance sheet. While referring to this subject, I might .mention, as a matter of interest to shareholders, that the Bank paid the following amounts during last year for rates and taxes:—lncome Tax, £2i85,38'2; Land Tax, £17,123; Tax on Note Circulation, £146,074; Rates, £7,904; total, £456,483. Turning now to the Assets side of the Balance ,Sheet we have:

mm tCoin and Cash Balances, government Notes, Legal Tender Note., ■ Bullion. —Total £8,772,285. Increase £2,052,520. —'Coin, Cash Balances and Government No .33 show a large v expansion. Legal! Tender Notes and bullion a moderate reduction—leavi_ the net increase as above. HY_ -«ey at Short Call and Bills Receivabi. in L0nd0n—£20,283,i642.— Increase .X46i5,587. This increase represents iNghly the growth thac has taken plac\iduring the year in the Colonial deports. As explained in my address a year ago, these funds are held in gilt-edged securities, readily realisable at any time. In ordinary times our exchange operations with Britain and those with foreign countries which have to be settled in London, approximately balance one another. Taking the transactions of a whole year, there is no *viery great difference between the

ANNUAL MEETING OP PROPRIETORS

amounts which we receive in London and those which we pay out there. •During the last few years, and especially during the year which has just closed, the value of our exports which have 'been paid for in London has very greatly exceeded the cost oi imports and other payments whicn have been made there. The tendency lias therefore been towards the accumulation of furius in London, and this is the explanation of our now holding so large an amount at that point. In accordance with our usual custom, provision has heen made for the writing down of all our Londoa investments to a figure at which they are readily realisable: Owing to the increased value of money in London, the funds we have employed there have ibeen yielding a very satisfactory return.

Investments in the Dominion — £3,824,764. Increase £548,602. — This increase is occasioned by the Bank's subscription to the last New Zealand .Government Victory Loan. The assets included under this and the two previous headings—Coin, and Money at iShort Call, etc., —are equal to 69.75 per cent., or roughly 13/11 in the £, of the Bank's liabilities to the public.

.Commonwealth and Fijian Gov eminent Securities —£239,317. Increase £105,001.—'The increase represents further investments made in the loans of the respective Govrnments. ,

Advances. —Bills discounted, £1,----502,:233, increase £26,483; advances, £17, i 9ia9,6)15, increase £539,828. First total, £19,431,848; second total, £566,311. This increase is comparatively small.

Landed Property and Premises.— £361,108. Decrease, 38,759. The sum of £50,000 has again been appropriated from profits in reduction of this account. It is this appropriation that causes the decrease shown. The usual outlay in respect of repairs improvements, etc, is of course continually going on. Shareholders who hav e travelled throughout New Zealand and have seen a good many of our offices will understand that the amount at which the Bank's properties stand in our books and in the balance-sheet is a very low figure compared with their actual value. Th 6 writings-down for a considerable number of years have been on a very liberal scale, and I think it probable that for som c time to come it may not be considered necessary to make further appropriation for this purpose.

Profit and Loss.—The nett profits for the year are £419,046 as compared with £388, 022 at 31st March, 1919. This is after paying interest on the Guaranteed Stock, maki«g the usual grant to the Officers Provident Fund, and also providing for a special grant to that fund of £100,000, paying bonuses to the staff, writing £50,000 off Premises and Furniture Account, and making all th e necessary provision for Bad and Doubtful Debts and also for depreciation in the value of other Assets. The amount brought forward from last year was £146,224 making a total of £460,270 now to b e dealt with after providing for the £105,000 disbursed in the 6 per cent, dividend of December last. It is now proposed to pay a further dividend of 7_ per cent and a bonus of 4 per ce_Tt. on th e Ordinary and "B" Preference Shares (making with the December dividend already paid 17i per cent for the year), and a further 4 per cent, on the "A" Preference Shares making 10 per cent, for the year. This will make the total dividend and bonus for the year, £268,----760. Of the balance remaining, £296,520, we propose to place £150,----000 to credit of the Reserve Fund, and to carry forward the residue, £146,520, to the next account.

Dividend.—ln view of the increase in the amount available for distribution, after making ample provision for all contingencies, the Directors have felt justified in proposing a small increase in the rates of dividend and bonus on "B" Preference and Ordinary Shares. It is, therefore, recommended in the Repovt now submitted to you that the total distribution for the year upon those shares shall be 17i per cent., instead of the 15 per cent, which has been paid for the last nine years upon the Ordinary /Shares and upon the "B" iShares since they were created in 1914.

Aggregate Assets.—Before passing from my review of the BalanceSheet figures I desire to direct your attention to the fact that our Aggregate Assets are now nearly £53,----000,000, the increase during the yea. having amounted to £9,699,259.

Board of Directors.—The members of the Board appointed by the Government, whose term of office expired on 31st March last, were Messrs. William Recce and David J. Nathan, It is with great regret that we have to record Mr. Nathan's sudden death on 20th March. He had been a member of the Board for three terms of two years each. His wide experience

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and Ibusiness knowledge made him a most useful Director, and his valuable counsel was always made freely available to his colleagues in their deliberations. The vacancy caused by iMr. Nathan's death has 'been Ailed by the Government appointing Mr. George Elliot, of Auckland, who is widely known in ibusiness circles, a director of the hank. Mr. Elliot is with us to-day, and I have pleasure, on my own and your behalf, in extending to him a cordial welcome. Our old colleague, Mr. William Recce, has, I am pleased to say, been re-appointed a director. These appointments are for a term of two years from 31st March last.

General Management.—Mr. William 'Callender, to whose retirement, after a service of fifty years, reference was made at last meeting, relinquished his duties on 31st January last, and Mr. Henry Buckleton assumed the position of General Manager on Ist February. GENERAL REVIEW.

The observations I have made complete the necessary review of Hie Bank's affairs and of the figures of the 'balance-sheet, and, before moving the adoption of the report and balance-sheet, I now, according to my usual custom, proceed to take a brief review of the general situation. ,

New Zealand's Financial Position.—New Zealand has enjoyed a series of years of solid prosperity, and, although the facts and figures have been presented in various forms, it will not be amiss to reproduce some of them in order to emphasise the point.

The banking returns for the past quarter reflect the position very clearly. The free and fixed deposits disclose remarkable movements. The figures for a series of years are as follows:—

As compared with 1914 the total deposits have more than doubled, but the gain is mainly in the free deposits —'i.e., the current account balances, which show an increase equal to more than 150 per cent. The fixed deposits have increased by about 50 per cent. In the six years 1914-19. the deposits increased by £14,800,000, while in the past year the gain is nearly £12,000,000. The phenomenal growth in the last year is probably attributable in great measure to the exceptional and large disbursements —upwards of £18,000,----000—made by the Government in connection with the repatriation of soldiers, which must have increased Bank deposits to a very substantial extent. It is also due, in some degree, to improved shipping facilities which have enabled a larger quantity of produce to be realised upon by exportation.

The returns of the Post Office Savings Bank afford evidence to the same effect. The figures of the 'Savings Bank deposit accounts for the same period are as follows:—

At 31st March, 1914 . .. 17,422,563 1915 . ~ 19,802,753 1916 . .. 23,147,158 „ 1917 , .. 26,901,830 1918 . . . 30,281,798 1919 . .. 34,454,130

We understand that for the year ended 31st March, 1920, this amount has been considerably augmented but to what extent we are not in a position to say as the figures have not yet been published.

The discounts and advances of the Banks have igrown to a moderate extent only:—

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In the* six years the advances and discounts comibined have increased (by the moderate sum of £8,375,292. In the last year a decrease is shown.

A glance at the figures of the country's commerce throws a clear light on the causes of the movements in deposits and advances as above disclosed. Our exports and imports have been as follows:—

From the year 1914 onwards the excess of exports over imports has been exceptionally large. In the six years 1914-19 the exports have exceeded the imports by the huge sum of £60,559,584, or an average of over £10,000,000 a year. Here we have disclosed a further source whence banking deposits have been replenished and advances reduced oi rendered unnecessary—in short, the explanation of the present easy local finaii'cial position and of the prosperous conditions generally prevailing in the country. But he would be a sanguine man who would affirm that similar conditions will prevail over the next ensuing years. A continuance of such prosperity cannot Ibe expected. It depends upon favourable world conditions, the prospects for which are at the moment, not at all encouraging.

n Government Revenue and Expenditure.—The returns of Revenue and Expenditure for the year ended 31st March last show a satisfactory position. £ The Revenue amounted to . 2(1,081,340 and the Expenditure to .. 23,781,925 .Surplus for the year .. 2,299,415 Both Revenue and Expenditure have shown rapid increases of recent years, the former having more than doubled and the latter nearly doubled during the last five years. The progress disclosed is interesting and I therefore give the yearly figures: War ended Revenue Expenditure Mist March £ £ 1915 12,451,945 12,379,803 1916 14,507,530 12,493,107 1917 15,355,194 14,058,770 1918 20,200,222 15,120,288 1919 22,352,372 lSj-73,599 1920 20,081,340 23,781,925 Adding the surplus for the year . . . . £2,299,415 to the accumulated balance at 31/3/19 . . £15,i2i39,561 we have a total of funds in hand .. . . £17,538,976 of which £15,180,!250 are in "Invest ment Account" and presumably Topresented by securities on hand in either the Dominion or London, No doulbt Repatriation Advances bulk! largely in this total, I PRICE LEVELS. The question of the cost of living continues to be a "burning"' one, and the fact that prices have continued to rise notwithstanding the conclusion of hostilities and the return of the fighting men to peaceful avocations, is leading many to wonder how long existing price levels are likely to bo maintained. Some there are who affirm that high prices have come to .stay, but in that view I cannot share though I admit that the range of future prices may be somewhat higher than before the War. In the Naploleioni'c W*ar English prices rose 75 per cent, and they took eight years to become normal again. In the American Civil War prices rose 100 per cent, and took over twelve years to become normal, How long it will take on this occasion to reach normality it would be impossible for anyone to forecast, but it .seems obvious that the process of deflation has set in. In Ame-

Rica, Japiui and, to a lesser extent, in Great Britain, prices of commodities have already slumped, the speculative fever has been curbed by the Banks restricting* credit, and financial crises have resulted. The changes lhat have taken place in these countries are bound to have far-reaching effects. In the matter of regulating prices some people are disposed to look for relief to Government intervention and control; but while, as a ter-

porary measure, good may result therefrom, it is fairly certain that no permanent relief can he secured in that way. The generally accepted view among people qualified to judge is that the less Government interfres with trade and industry the better. This principle was well enunciuted by Lord Macaulay over half a century ago when discussing suggestions that had then been made for Government control of and assistance to trade. He remarked:—

"It is not by the intermeddling of the omniscient arid omnipotent iState but by the prudence and energy of the people that England has hitherto been carried forward in civilisation; and it is to the same prudence and the same energy that we now look with comfort and good hope. Our rulers will best promote the improvement of the nation by strictly confining themselves to their own legitimate duties, by leaving capital to find its most lucrative course, commodities their fair price, industry and intelligence their natural reward, idleness and folly their natural punishment, by maintaining peace, !by defending property, iby diminishing the price of law, and by observing strict economy in every department of the State. Let the Government do this; the people will assuredly do the rest."

These views will find general acceptance among the political economists of our day.

In searching for remedies for the .existing evils we naturally first make an endeavour; to seek the causes of the evils that! we wish to-remedy. There we.foni ourselves at once on debafajble'ground. One school of that currency inflation is** at the root of .all price inflation. Another school affirms that pn.ce inflation is solely the result of the operations of the ordinary laws of supply and demand. For my part, I am disposed to attribute the appreciation in prices, from which the world is at present suffering, to no single cause but to a variety of causes including both of those just mentioned. The question is a very complex one, because a multiplicity of influences are at work to bring about the result arrived at, exercising a vary-, ing degree of effect according to varying circumstances and the nature of the commodity concerned. It would certainly be wrong to ascribe to any one particular influence the whole responsibility for the unenviable situation in which we now find ourselves. But in looking for remedies, as we undoubtedly must, if we are to restore ourselves to more tolerable conditions, we can see broadly individual influences which tend to the perpetuation of price inflation, and if these be dealt with and removed, even though only one by one, we shall be assured that we are gradually traversing the road which will lead us back to more reasonable price levels. Among these remedies the following unmistakably take primary place:— (1) The exercise of • the strictest economy in public and private expenditure. (2) Honest effort to increase production Ro the utmost possible extent. - ; - ... t (3) Encouragement and development of every class of industry and uncompromising discouragement of all speculation. (4) Deflation of the world's currencies, which will to a large extent result from the application of the three remedies first mentioned, Along these lines It is our duty to proceed if we wish to hasten a return to more normal conditions, and I venture to affirm that, if the above remedies were put generally into active operation, it would not be long before a welcome and substantial 'change in the situation would become apparent,

Some 101,400 acres of land ar c to he opened for Selection this month. A additional area of 4306 acres will b e opened in July. The "Grown i}_nds Guide" (obtainable ait any L,and Office) contains particulars of over 571,000 acres already open for selection. Upwards of twenty-seven million superficial feet of milling timber in the Auckland Land District and 408,000 superficial feet of timber in the North Auckland District are to be offered for sale by public auction

The publication of private correspondence extending over ten years between King Leopold of Belgium and August Marie Beerheart, onetime Prime Minister, shows clearly that the old monarch—one of the shrewdest men who ever sat on a throne—(believed that the Germans, if they ever went to war again with France, would take the northern route to Paris through Belgian territory. He warned his prime minister. He tried to impress upon the French statesmen of the time that there were plans then being laid in Berlin to ensure that the next war would ibe a swift and bloody one. Hence, King Leopold started the Liege-Namur forts. But the pleadings of Leopold fell on apparently deaf ears, and he passed away grieved that so little consideration had been given to the* proofs that he furnished. On the occasion of his last trip to London, England, he saw the late King Edward, to whom he divulged secrets that are not given in the correspondence referred to. King Edward is said to have assured Leopold that, whether he would be alive or dead at the time of the next war, England would stand by her treaty if the Empire crashed under its performance. The world knows the sequel.

LAI. OUI. AND uAI'IIAL. I Upon our national industry our ~ll_i<: jiat.Omu i.i. uep.Jliiri. A C.i* ... :i .-.Luntuii ii u£ proauctiua U..i!ed ' lv :i metnod oi distriout ..oii ui'u vi. iv*.< requisites ox a .*_- _i&ii'_ pli.■oiCcti and moral .veii-bemg. ' \\ <i n.. l-y v..niiiu*i' irom ..■■juiure tue ju_.wj. or i,iL'e. Production, indeed, is prerequisite to distribution, for without the lormer the laUer is int possible. To-day these two great factors in our national life leave much to ue desired. aii intelligent and sincere co-opera-tion between the two great agents or production—i-auour and Capital — is aiDsoiuteiy essential to an ameliorated condition of our peop_e, and yet tnat Kind of co-operation, not only in _.ew Zealand but in the OidWorul, seems to ,ue diminishing rather than increasing. The policy of organised Laibour the world over is to fight Capital and not to unite with it. The world is confx-onted with an unparalleled economic crisis. Want and starvation are stalking through Europe leaving widespread death, misery and suffering in their track. Unfed and uncllothed millions are crying* in despair for food and raiment. Lack of a reasonable measure of comfort ; s widespread owing to an insufficiency of the necessaries of life; and before this sad spectacle the mutually destructive struggle between Labour and Capital seems to ,be growing more and more bitter and intense Strikes on the shallowest pretencooj ever increasing demands for shorter hours; .imitation of output and a conflict growing blindly ever more acute between employers and workmen, seem to justify almost a gospel of Despair regarding our social and economic future..

Never before in the history of the world have the needs of increased production been more clamant than to-day—never before were the two partners, Labour and Capital, more ibitterly estranged and antagonistic. Ido not say that the blame—for the spectacle is a sorry commentary on our civilisation —is wholly with on,, side or the other. Capital has never ■sufficiently brought to its consideration of the claims and aspirations of Labour the lamp of human sympathy. Recriminations and denunciations in the present great world crisis will serve no purpose <but that of intensifying the evils of the estrangement and diminishing the hope of reconciliation. "It is better to strive for the good than to rail at the il_"—to remedy the cause than to denounce it.

'Two great desiderata call aloud for recognition: First, more sanity on the part of Labour—it should cease to be so immersed in agitation and so blind to its results; and secondly more genuine evidence of willing cooperation and concession on the part of Capital.

Crusades against the soaring cost of living, profiteer-hunting, fixation of prices—these are but symptoms of the disease of a paralysed or arrested production, and the remedy lies in getting to the root of the evil instead of applying palliatives. to the symptoms. If the days of radical changes in the structure of our industrial system is inevitable the sooner it is recognised the better, and the utmost human effort must be made to find a just and permanent modus vivendi.

Much of the present bitterness between the two great agencies must ibe due to misunderstanding or simply blind antagonism, and our unflinching determination should be to dispel these causes by bringing the parties as much as possible together. I do not ignore the stupendous difficulty of the problem, but it must be faced and solved or national disaster is before us. To this end the proposal that the Prime Minister should call a national industrial conference of both employers and employed is surely ,a step in the right direction. This would at least disclose more clearly root causes and basic differences and open up a possible path to genuine co-operation .and industrial concord.

In a land like this, so richly endowed by Nature with all) that is necessary for solid national comfort and happiness; with a sturdy race of purely British blood and a climate that stimulates energy; it is surely deplorable that industrial antagonisms should so paralyse the hands of industry and stifle' the creation of wealth that many have to face want where plenty should be their Hot and comfort their heritage.

That production in New Zealand has suffered grievously from the causes I have indicated no one can

deny, and the following table is but eloquent proof of that conclusion:--

At. the close of 1919 there .were in store 126,7i22,*2'32 lbs. wool and 2,107,672 cwt. <of meat, which, under normal conditions, would nearly all have been exported, and should therefore be credited in the above table, in which case the average _or 1915-19 would, in respect to wool, be increased by over 25,000,000 lbs., and would convert the apparent shrinkage into an actual increase. But, even after .making alll such allowances, the average increases are not encouraging and, unless a great deal more is accomplished, the pinch of "hard times" will be felt with some severity. The values of our products are declining, and, when the Imperial purchasing scheme terminates,, a new set of conditions is bound to arise— a set of conditions that will be full of difficult problems for bankers, business men and producers. Wool, meat, tallow, hides and skins have already receded from the high level reached since the Armistice was signed in 19,18. The statistical position in respect to most of these products makes it inevitable that prices must go lower. For instance, in the case of wool, the quantity in hand is far in excess of the consumptive capacity of the available spindles and, even if all the spindles that were in operation prior to the war were in operation now, the weight of woo; would be more than could be dealt with in a reasonable time. With the embargo placed* on speculation by bankers the world over, spinners are operating only from hand to mouth and they are safe in pursuing such a policy, for the wool is at their call; whenever they require it. Meat, too, seems likely to present serious difficutlies because .of the enormous quantity in store. There is not yet sufficient shipping available to clear the coLd stores, and, even if transportation oouM be arranged, it would not prevent prices from falling. Though some of our produces may hold to something .Like their present values. —dairy produce for instance—the general tendency is downwards and, should the decline be anything like 25 per cent., the situation woulld become one of some seriousness. In the six years, 1914-19 —the years of war prosperity —the exports aggregated £202,590,(595, or an average of £33,705,110 per annum. A drop of 25 per cent, would reduce Una to £25,323,----837, and bring us down to the level of 19.14, when tie exports were valued at a little more than twenty-six millions. Such a shrinkage would be immediately reflected in the Treasury returns and, unless the strictest economy is exercised in every department of The State, increased taxation would, in that event, seem to be unavoidable. Businesses which have been built up on the basis of inflated prices, and land values that, have been rushed upwards on the same basis, would suffer severely in the process of deflatioa.

Land Values. —in several of my past addresses, 1 have referred to the high prices paid in this Dominion for country lands and pointed out the danger of basing land values upon current pric_s ruling for produce. .Similar warnings have been uttered by others occupying responsible positions, but so far they have gone unheeded.

Repatriation.—A large expenditure has been going on in connection with the work of repatriation of soldiers, and a total of I_,6__ men had up to the end of May last, received financial assistance from the State in some shape or form.

This repatriation work is most desirable, lt is in the interests of both the men themselves and also of the country, and it is satisfactory to know that such a great deal has been done.

Immigration. —It seems to me that one of the pressing needs of our country at the present time is population. All classes of the community are suffering from lack of labour, and the present production of field and factory could be, with ease, almost doubled if the necessary labour were available. The energetic prosecution of public works in the country is also greatly impeded by the dearth of necessary labour. The natural increase of the population is much too slow to meet the needs of the country. Unless some special effort be made, immigrants will undoubtedly be attracted elsewhere and be lost to New Zealand. The Commonwealth Government, it was recently announced, have an immigration campaign in view and intend to adopt extraordinary measures to divert the surplus male and female population of the United Kingdom to Australia. It is* to Ik? hoped that the Now Zealand Government will he no less aggressive.

[ Money Markets. —The conditions of the money markets of the world point lo tho probability of scarcity of money and coiisequeiii higher lending rates in the not distant future. The deflation of the currencies, which 1. -held by most economists to be the essential p_t_l_mi__-iu-.y lo the rt.e_tabl_sh__._nt of satisfactory linaiicial condition, and the speedier revival of industry and trade, wlil inevitably be. accompunicu by appreciation iv the value of money. l.educed supply will mean increased value of the quantity remaining available. A preliminary movement of t'hi* naiui. has

already taken, place coiisequeiii upon the restriction placed by leading banking institutions in various parts of the world upon facilities for speculation. An i:p\vard tendency in 'he vt-iuc of money is apparent. The Bank of England rate is now 7 per cent., to which it was raised from U per cent, on 15th April last. The British Government is paying G_ per cent, on its Treasury Bills, its Exchequer Bonds with a currency of two years are reported to be yielding over 71 per cent, to the investor, and flat loans with a currency of 25 years and more are returning to the investor

£6 Os „d per cent,

Ali borrowers-, both Government, public and private, must be prepared to pay higher rates for future accommodation.

The Prime Minister, the Bight Hon. \V. I. Massey, has, on more than one occasion, urged the necessity for economy, and the injunction cannot be too strongly emphasised at the present time both as regards public and private expenditure of every description. Unfoi'tuaately, the public does not yet appear to have appreciated this necessity, because expenditure of every kind continues for ihe most part on as lavish a scale as ever. But in this respect New Zealand is not singular nor by any means the worst offender. The whole civilised world has been indulging iv a riot of extiavagance, and the reckless outlay has contributed to feed a flame which, if not quenched, may shortly develop into a conflagration which may threaten the very foundations of ordered civilisa-

tion.

It will be noted that the Minister of Finance has just issued the prospectus of a Government loan of two millions, with a currency of ten years. The issue price is to be .par and the rate of interest five per cent., subject to income

tax. The. Minister further intimates that another loan, of considerably, larger amount than this, is practically certain to be offered locally before the end of this year.

The Minister of Finance is, I believe, wise in not endeavouring to obtain his requirements m Britain or elsewhere outside the Dominion; such borrowing if practicable would at present be unduly expensive.

Future of Produce Markets" and Trade.—With the cessation of the Imperial Government's purchase of produce, the producers of New Zealand must make the best arrangements they can for the financing and marketing of their produce.. The banks ..will, no doubt, ou terms-and conditions to be arranged, be called, upon to-provide very huge sums for this purpose. That the position is full of difficulty and danger must be obvious to all. The stores are full of produce which cannot possibly be moved before the flush, of the next

season, shipping is still scarce and likely to remain so, and the terminal markets are glutted so far as meat and wool are concerned. It may bt : , desirable, if not imperative, to look for new markets for wool and meat, but in this connec-. tion we can but turn to America, which is the only country apart from Britain that can offer a market. The Britls. Government is itself endeavouring to avail itself of the American market in an effort to quit its own accumulations of wool and meat. The prospects in the United .States appear no better "thar. they arc in Great Britain. Wool offered in New York registered a sharp decline ,and it is yet to be determined ■whether a reasonably good market can be secured there for mutton aid Jamb, although, for the latter, arrangements have been made for several shipments within the next few months totalling, in all, about 500,000 carcases

The motion for the adoption of the report and balance- sheet was seconded by Mr W. Watson.

Ala rch Quarter ' DiscountsAdvances. Total. £ £ £ 1914 1915 1910 19.17 191S" .. 1919 19_0 2,017,107 1,634,418 1,437,655 1,552,863 1,223,465 1,484,612 1,280,188 21,649,643 22,106,144 22,246,237 26,142,067 28,094,431 30,719,032 30,761,854 23,666,750 23,740,562 23,683,892 27,694,930 29,317,896 32,203,644 32,042,042

AI larch Q 1914 1915 1916 1917 1918 1919 1920 Juarter. i Free Deposits. 13,475,771 15,958,732 19,091,949 20,970,702 21,614,302 24,363,681 34,814,896 Fixed Deposits. 10,554,479 10,870,507 12,182,104 13,385,S3S 13,S91,195 14,485,145 15,850,195 Total Deposits. 24,030,250 26,829,239 31,274,053 34,356,540 35,505,497 38,848,826 50,665,091

Calendar Year. 1910 1911 1912 1913 1914. 1915 19)6 .. 1917 1918 .. 1919 Exports. £ 22,152,473 18,9S0,1S5 21,511,626 22,810,363 26,253,925 31,430,822 33,281,057 30,013,184 . 28,438.187 52,573,520 Imports. £ . ! 6,748,223 18,7 82,608 20,576,57'.) 21.<>53 r 032 21.144,227 20,658,720 25.045,403 20,7.2,124 24,131,720 30,308,90. Excess of Exports over Imports. £ 5,404,250 197,577 935,047 1,156,731 5,109,698 10,772,102 8,235,654 9,871,060 4,306,458 22,264,612

Increase or Wool (lbs) . . Meat (cwt) . Butter (cwt) Cheese (cwt) Tallow (cwt.) Hides (No.) Hempt (tons) J5 .ports 1914 220,472,S9S 3,229,970 434,067 863,770 490,300 412,822 23.92S Annual Average. 1015-19 214,008,975 .••1,475,407 376,154 000,510 359,208 20,4!i:; Decrease. *P£i- cent. 2.9 decrease 7.0 increase 13.0 decrease 23.0 increase 2.0 increase 1_.0 decrease 1 ' !.) increase