SHAREHOLDERS’ MEETING

New Zealand Times, Volume XXXVII, Issue 8608, 19 December 1913, Page 9

SHAREHOLDERS’ MEETING

Chairman Gives Warning to Borrowers Tightness of the Money Market LABOUR UPHEAVAL AND ITS EFFECTS

The half-yearly general meeting of tlio Bank of New Zealand was held yesterday morning, at the head office. Mr Harold Beauchamp, chairman of directors, presiding over a good attendance of shareholders. RECENT LEGISLATION. The chairman, in his review of the business done since the annual meeting, said:—"Our half-yearly general meeting, at which, as you know, there is no statement of accounts to be submitted, usually takes place early in the mouth of December. The lateness of the date fixed on this occasion was due to our desire to give ample time for the passage of legislation affecting tho bank which was in contemplation when last we met you. That Icgislation is now, as you aro aware, an accomplished fact. Every shareholder will shortly bo furnished with a print of tho Act. Ido not, therefore, propose to take up your time by discussing the details of tho measure. I will merely refer to tho more salient features of it, which arc, that the £1.000.000 4 per cent. guaranteed stock, maturing on July 19th next, will bo renewed for a further period of twenty years with the Government guarantee; and the board has authority, with tho consent of the Minister for Finance, to raise now capital for tho bank to tho extent of £3,000,000, of which £1,000,000 is to bo B preference shares which the Government is to have the option to take up; and £2,000.000 to ho ordinary shares, which tho ordinary shareholders are to have the option to take up in proportion to their existing holdings. Thus, the new legislation has satisfactorily defined and conserved the interests alike of the bank, tho shareholders, and the State, and I congratulate you on this result of Parliamentary action. NEW CAPITAL ISSUE. “The hoard proposes to issue, as soon as convenient, one-fourth of the £3,000,000 authorised, that is to say, £750,000, as follows; £250,000 in 87,600 B' preference shares of £6 13s 4d each, to the Crown; and £500,000 iu 75,000 ordinary shares of £6 13s 4d ■each, to the ordinary shareholders, at premium of 50 per cent, in each enso. The B preference shares will be offered to the Government in accordance with the provisions of the statute. The 75,000 ordinary shares will ho offered to the ordinary shareholders in tho proportion of one new share for every two existing ordinary shares held, but no fractions of shares will bo issued. Tho capital and premium will he payable in instalments as follows: To he allocated. To To Amount. Capital. Premium. £e. d ,£e, d. £s. <l.

“No rebate will b© allowed on any amounts paid before due date, but shareholders will have th© option of prepaying all or any of the above instalments in full on any of the dates prescribed, and the capital amounts included in such prepayments will rank for proportionate dividend as from the date ot prepayment, provided that the proportionate amount ot premium relating to such installments, as mentioned above, be simultaneously paid. “All arrangements will bo completed so that the new capital may be subscribed as at the commencement of our succeeding financial year, viz., April Ist next, and the amount then paid up will constitute additional capital as from that date. The necessary documents in connection with the subscription of th© new capital will be furnished to shareholders in due course. The share registers will be closed some time in March next, and the shareholders then upon the registers will be those entitled to participate in til© proposed new capital issue. To them the application papers will be sent, which must be returned on or before April Ist next, together with application moneys as above mentioned. Arrangements will be made by which proprietors who do not propose to take up their quota of shares may assign their rights to others. “The prospects of the bank are extremely good; and the settlement of the proprietary interests on what I believe to bo a fair and equitable basis, constitutes in my opinion a substantial addition to the value of your property. THE MONEY MARKET. “When I last had the pleasure of addressing you, I reviewed at some length the financial situation and outlook, and remarked that 1 was not sanguine of an early return to easier .monetary conditions. The views I then expressed have been justified by events, and the tightness in the market then prevailing still continues. The Bank of England rate, which had been reduced to 4J per cept., was raised again on October 2nd to 5 per cent., at which figure it still stands. The rate of the Imperial Bank ot Germany is 5 per cent., and that of the Bank of France 4 per cent. You will thus see that the dearness of capital is not confined to London alone; it is the condition of th© whole commercial world, and it is safe to say that there is little present prospect of money becoming more accessible on easier terms. The enormous expenditure on armaments shows no sign of diminution, notwithstanding the drain on capital thereby created; but one of tho greatest causes of the continued dearness is tho demand from all Countries for" development purposes. Tho moment there appears to be tho least relaxation of tension, the market is flooded with applications for

loans literally from every quarter of the globe. “We cannot, therefore, expect to find n very free market for our municipal and other loans. This hank has been entrusted with the negotiation of a largo total of such, to bo placed as soon as circumstances admit, but tho prospects of favourable flotations, for tho reasons already ’stated, do not seem at all encouraging. There is, however, little doubt that money in reasonable amounts can ho obtained, provided that tho borrower is prepared to pay flio lender’s price. We shall have to choose tho most favourable moment to approach tho market; and, ns tho unexpected sometimes happens, wo may xieriiapa hope that it will occur in our near experience, in which case it will certainly be gratifying. IN PESSIMISTIC MOOD. “Owing to tho stringency during the whole of the half-year, we have effected no loan flotations in London for any local bodies during tho period. The market has latterly been in a most pessimistic mood, and those corporations whoso finances would not admit of postponement of their applications have had to submit to onerous terms in order to raise tho funds they required. The general investing public appear to bo shy of oversea securities, as the greater part of colonial, municipal and other loans floated during tho half-year has had to be taken up by the underwriters, who at one time became so heavily loaded with stocks that they had to call ;a halt and absolutely decline to consider any further issues until they had been able to dispose of a reasonable proportion, of their burdens. With conditions as they stand to-day, I am bound to recommend New Zealand local bodies, having loan issues in prospect, to postpone any action in the meantime, and to avoid making any commitments for outlay. GOVERNMENT LOANS. “Tho New Zealand Government placed a redemption loan of £3,500,000 at 4 per cent, in October last, in the shape of ten years’ debentures convertible into i inscribed stock at £lOl. The issue price was £9B 10s. In this connection it is interesting to note the terms on which other recent colonial Government loans have been floated:— Issue Price. New South Wales £3,000,000 at , £ 4 p.c. in March, 1913 98 Now South Wales, £1,500,000 at 4 p.c. in August, 1913' 97i Victoria, £2,000,000 at 4 p.c. in September, 1913 98 Canada, £3,000,000 at 4 p.c. in September, 1913 98 West Australia, £1,000,000 at 4 p.o. in November, 1913 97 Canada, £4,000,000 at 4 p.c. in December, 1913 97 It will be seen that the New Zealand Government was able to obtain for its loan the highest price of the year. All things considered, therefore, the Government of this Dominion may well be congratulated on the success of the operation. LOCAL PROSPECTS. “ Turning now to the more local aspect of the matter and the money supply on this side of the world, we find that Australia is anticipating a good season, and rates for money are said to be weakening there somewhat, lenders being prepared to advance on mortgage at fully one-half per cent, less than they were demanding a few months ago. In New Zealand the season, owing to the excellent winter, promises to be perhaps the most bountiful ever experienced, and as prices are, on the whole, good, the net yield should be most satisfactory. In point of fact, I anticipate that at the end of the current produce season, covering a period of twelve months, our total exports will approximate £25,000,000. “ Both in Australia and New Zealand, however, monetary ease resulting from the excess of exports is not likely to bo experienced to any great extent, because, though exports have largely increased, imports have increased in even greater ratio. For permanent relief, therefore, we can look only to tho central market of the world, and until London money becomes definitely cheaper, there seems small prospect of much ease in the Dominion. THE LABOUR TROUBLE. “In tho midst of so much that was favourable in tho circumstances of the people of this country—a bountiful season, with a large prospective export of wool, butter, cheeso, mutton, and other products; with good prices ruling in tho markets of tho world; with abundance of work for our people at a high average of wages fixed by agreements made under tho authority of our courts—wo were suddenly confronted last October with a strike, at first a small affair, hut quickly turned by mischievous agitators into tho most serious industrial upheaval that the country has ever experienced. What tho trouble is all about, most people have a difficulty in explaining precisely. It is not wages, for that at one time fruitful cause of dispute is not mentioned; it is nqt hours of labour, for no one has complained. The real question at issue appears to be whether the Federation of Labour shall be recognised as the controlling authority in Labour questions. Tho employers say ‘No!’ because the federation has declared itself as inimical to existing social conditions and a disregarder of industrial agreements and obligations. The employers claim that they should be expected to treat only with Labour unions so constituted as to provide a means whereby the equitable settlement of any disputes that may arise shall bo assured. For this purpose they claim that the unions must register themselves under the Industrial Conciliation and Arbitration Act, which provides the necessary tribunal for hearing and adjudicating upon industrial disputes. This certainly seems a reasonable attitude to take up in the interests of all concerned; but it does not suit the Federation of La-

bour, which aspires to being itself the sole arbiter of such questions. And so the strikers, who are under the domination of the executive of the federation, remain on strike, and presumably will continue so until they throw oif the yoke of the federation. HOW THE WORKERS SUFFER. “In tho meantime, tho only certain things are that the whole trade of tho community has been disorganised and upset, and that a systematic attempt has been made to absolutely destroy means of communication with the outside world. No regard appears to bo paid to the enormous loss of wages to the workmen, who, themselves, seem to forget that men who earn their living by work paid by the hour can never overtake the hours lost, that it is just so much absolutely cut out of their lives. A merchant whoso business tho strike throws out of gear does not suffer in a similar degree because, generally speaking, ho is able to sell to-morrow tho goods which the strike has prevented him selling to-day; but not so tho workman, whose time is his capital, for with tho waste of ono goes tho loss of the other. It is, indeed, a strange thing that tho workman cannot see that in movements of this kind ho must, on every occasion, be the greatest loser, and, indeed, the most extraordinary as well as the most certain conclusions to be drawn from the circumstances of this senseless strike are, first, the astounding ignorance of the workman of tho economic nature of his own valuable capital, viz., his labour; and, secondly, diis equally astounding credulity in listening, oblivious of the most obvious lessons of his life, to the wicked and stupid representations of unscrupulous demagogues who, in order that they may bo spared tho necessity of doing any honest work themselves, sponge upon him for the means of leading an idle life, while they poison his mind with their absurd, impracticable and revolutionary theories. AN ENCOURAGING FEATURE. “It has been an encouraging feature of the struggle that tho call of tho federation’s executive for a general strike was not uniformly responded to by the Labour unions. This shows that a large proportion of tho workers of the Dominion are not in sympathy with tho aims of tho federation, and are not disposed, at the bidding of revolutionary Socialists, to voluntarily involve themselves and their families’ in needless sacrifices, and their country in serious losses. I believe, if the Labour unions were to make it a fixed and invariable rule that no strike should ever be called until a secret ballot of the union or unions affected had been taken and had resulted in approval of a strike by a majority of at least one-fifth of the votes polled, strike troubles would not loom as large ns they at present do in tho industrial landscape. It will bo within your recollection that the secret ballot of the General Labourers: Union resulted in a Tote of 3 to 1 against striking at tho call of the Federation of Labour. “As the strike developed, there naturally occurred a certain amount of disorder, at ono time presenting a threatening appearance. But the strike leaders very evidently underestimated tho resources of society for its self-preservation, and they entirely overlooked the fact that it was not in tho least likely that the producers of more than nine-tenths of the exportable produce of the country, wore going to sit idly by while their property was being held up or destroyed at the bidding of a small knot of irresponsible persons styling themselves the executive of the Federation of Labour. FARMERS THE COUNTRY’S GUARDIANS. “Shareholders beyond New Zealand may he interested to know that, shortly after the declaration of the strike, now unions of waterside workers were formed and registered under the Arbitration and Conciliation Act, and these unions, largely composed of country hands, and known ns the arbitrationists, have been able to successfully cope with the loading and discharging of produce- and merchandise at the various ports -throughout the Dominion. The farmer has indeed proved himself to be not only the backbone of the country (as has long -been recognised), but also tho country’s guardian and protector. If the present attitude of tho leaders of the Federation of Labour is to bo taken as an indication of Labour’s attitude generally, it evidences a design to disintegrate the existing social order; and in that cast, tho salvation of the State, as well as its prosperity, would seem to lie in the multiplication of the yeoman pro prietary to the utmost extent possible. Thus, tho strike developments have furnished a fresh argument in favour of the encouragement of land settlement and the subdivision of our large estates. THE GOVERNMENT COMPLIMENTED. ‘The Government arc to be complimented on the firm way in which they have dealt with tho disturbance and are now bringing to justice offenders against law and order and others charged, with incitement to crime. Conduct of tho kind must, of course, in tho interests of society, be rigidly repressed and severely punished. Tlie thanks of the community are due to all the special constables who, at considerable inconvenience and bodily risk to themselves, placed their services at the disposal of the authorities. They are also deserving of praise for the admirable self-control they displaced in the face of occasional extreme provocation from the lawless element among tho mob. “Before passing from the subject. I fool that it devolves upon me, as representing an important section of the financial interests of the country—interests which really concern the honest, well-doing worker as much as the employers—to stress most emphatically the exceeding folly of the resort to strike methods with the object of righting a wrong—real or imaginary. Profit cannot result from the precipitation of loss. The waste involved in a strike is simply deplorable, and the set-back which industry sustains is almost incalculable. And, to crown all, the strike usually fails to achieve tho end for which it was planned. Therefore, when considered calmly and dispassionately, resort to the strike can only be regarded as little short of insanity on tho part of the workersENORMOUS ‘ LOSS. ‘As showing tho enormous loss that may be entailed by strike action, some interesting statistics are given in ‘The Economist’ newspaper of September 27th and October 4th, It appears that in the year 1900 there were in England 648 industrial disputes, affecting 188,500 workers and involving a Joss of 3,150.000 working days. In 1911 and 1912 there were 1724 strikes and lockouts, affecting 2,400,000 workers and involving a loss of 50,600*000

working days. Other countries have suffered similarly; but I have only available the details relating to France, where, during 1912, there were no loss than 1116 slrikes, affecting 267,000 workers, with a loss of 2,318,000 working days; an improvement, however, on the previous year, when tlie loss through strikes was equivalent to 4,096,000 working days. “These are significant figures. They show that these struggles are imperilling national prosperity, and indicate that, if allowed to go on unchecked, they will almost certainly lead to national disaster. Every true patriot must feel that they emphasise the urgent need for careful consideration of the difficult problems involved, with tho object of discovering a satisfactory solution. THE STAFF OF THE BANK. “In tho course of tho discussion which took place in Parliament when tiro bank’s bill was 'under debate, reference was. made by some of the speakers to the pay of our staff, which is .apparently considered inadequate. In view cf this, I have had some comparisons made between the position in 1900 and 1913, and I quote them below for your information In 1900. In 1913. Number ol officers employed 353 957 Average salary paid £l7l 11 0 £196 2 i) Total ol provident funds £143,163 0 0 £193.747 0 0 Maximum pension payable... £330 0 0 £SOO 0 0 Minimum pension payable ... £IOO 0 0 £l5O 0 0 Bank’s subsidy nil £10.512 0 0 Staff's oonti Ration £2,610 0 0 £4,965 0 0 During tho period under review, i.e., from 1900 to 1913 (both inclusive), the board lias contributed to the provident fund an aggregate of £71,782, whilst tho concurrent contributions of the staff themselves have amounted to £49,396. “In addition to the improvement which tho above figures evidence, the bank has paid a steady annual bonus commencing with, and including, the year 1904. The rate of tho bonus has been 5 per cent, of salaries, except in 1911 —the bank’s jubilee year —when 10 per cent, was paid. The actual ariio'ant of bonuses distributed year by year has boon ns follows: —

“No bonus was paid ns at March 31st last, the staff having been informed on the occasion of tho last distribution in 1912 that it would probably be discontinued and that the board would, in all likelihood, prefer to make more liberal increases in the salaries of deserving officers, rather than pay a bonus in which deserving aiid undeserving share equally. The current year is the first on which the bonus has been missed, but 1 may mention on tho other hand that the salary increases granted as at March 3dsfc, 1912, were unusually liberal. Some two years ago a scheme for improving the position of the junior staff was formulated, and adopted by the board. Under this scheme, youths, entering the bank’s service at, say, seventeen years of age, after completing their six months’ probation, commence at a salary of £GO per annum, and rise by yearly increases until, in their seventh year of service, they receive remuneration at the rate of £l5O per annum. Thereafter, further steady annual increases, if merited, are granted. The bank has also established a fund for the pension of its aged messengers, and is gradually endowing another fund, which will eventually be available for the relief of specially necessitous cases. “From tho foregoing it will bo seen that the position of the bank’s employees is an improving ono; that the board is not unmindful of the interests of its deserving servants, and that the advantages offering in the hank’s employ should attract to its service men ef a satisfactory and efficient class.' BOARD OF DIRECTORS. “We now coma to the actual business of the meeting, the first of which is the election of a representative on the board Mr Martin Kennedy is the retiring director on this occasion and, being eligible, has offered himself for re-election. As there is no other candidate for the appointment. I have much pleasure in declaring him duly elected. (Applause.) INTERIM DIVIDEND. “The next business is the interim dividend. Tho profits for tho half-year ended September 30th last, while somewhat below those of the corresponding half of 1912> are still very ample, and we have every reason to expect that those for tho current half-year will prove satisfactory. Tho board has •therefore decided upon making ithe customary distribution. A dividend at the rate of 6 per cent, is declared accordingly, and will be payable in Wellington to-morrow, 19th inst., and at branches on receipt of advice. £ do not think there is anything more calling for remark by mo, and, as Christmas is at hand, I will conclude by wishing you all the compliments of the season.” (Applause.)

On application not later Ilian April 1st. 1114 1 5 0 0 16 8 0 8 4 On July 1st. 1914 1 5 0 0 16 8 0 8 4 On October 1st, 1914 1 5 0 0 16 8 0 8 4 On January 1st, 1915 1 5 0 0 15 S 0 8 4 On Apr! 11st. 1915 1 6 0 0 16 8 0 8 4 On July lit. 1915 1 b 0 0 16 8 0 8 4 On October 1st. 1915 1 5 0 0 16 S 0 8 4 On January 1st, 1915 1 5 0 0 16 8 0 8 4 Ifl 0 0 6 13 4 3 T *8

March 31st, Year ended 1001 .. 6534 „ „ „ „ 1905 .. 5793 ,, „ „• „ 1900 .. 0140 „ „ „ „ *507 .. 6717. „ „ „ „ 1908 .. 7077 „ 1909 .. 7280 „ .. I 910 .. 7485 „ „ „ „ 1011 .. 15,491 1912 .. 8415 £69,938