A BANKER'S COUNSEL.

New Zealand Herald, Volume LXVI, Issue 20426, 30 November 1929, Page 12

A BANKER'S COUNSEL.

The large number of New Zealand shareholders in the Bank of New South Wales will welcome the new

arrangement by which the report and balance-sheet and. the text of the president's address to the annual meeting in Sydney have been made available for immediate publication in New Zealand. The Bank of New South Wales is the first among Australian banking institutions, both historically and in the

magnitude of its operations, and it is appropriate that the observations delivered from the chair at its an-

nual meeting, informed as they are by intimate acquaintance with the social and economic conditions of the whole of Australia and New Zealand, should reach as large an audience as possible. To achievn this 1 widespread distribution preparation of the address , had necessarily to be completed some time in advance of its delivery, and during

this interval the situation in Aus

tralia, which forms its principal subject, has been in a measure changed by the Budget speech of the new Federal Treasurer and by intimations of the Government's financial policy. Mr. Buckland's purpose, however, was not to examine the details of any political programme but to survey the general situation of Australia and to indicate the need

for greater prudence. Indeed, he has repeated with stronger emphasis warnings that he has given in the past. There is a graver note in his speech on this occasion, a warning that a critical stage has been reached, since the embarrassment produced by "extravagant and often unproductive expenditure" in past years has been aggravated by a sharp contraction in the national income. To a

large extent. Mr. Buckland's speech

is addressed to Australia rather than New Zealand, but there is much in it which can be profitably studied in New Zealand. His observations on production costs and taxation, overseas borrowing and monetary experiments are equally applicable to New Zealand, where perilous dgctrines do not lack advocates. New Zealand interest in Australia's progress is directly illustrated by the participation of many of its citizens in the fortunes of the Bank of New South Wales, and any tendency to indifference will be checked by the disappointment at the dividend announcement, which will scarcely be assuaged by the reminder that the bonus has been annually accompanied by a warning against expectations of its repetition. In simple fact, the directors feel the prudent course is to conserve the resources of the bank. The remarkable growth in the amount of advances during the year is alone evidence of the need for caution, for they have now risen to almost 90 per cent, of the deposits. Conditions have been adverse to the normal accretion to the bank's resources, while the demand for accommodation has grown, and the disparity is a symptom of difficulties which in many cases may not be fully surmounted. It is the policy of such great national institutions to sustain their clients against misfortunes, even when these have been created by general and individual imprudence, and there is a measure of its Service to the public in the sharp contraction of declared profits in the last two years—the reduction being clearly due to provision against the unknown contingencies of a difficult situation..