The New Zealand Times SATURDAY, JUNE 20, 1925. BANK OF NEW ZEALAND

New Zealand Times, Volume LII, Issue 12169, 20 June 1925, Page 4

The New Zealand Times SATURDAY, JUNE 20, 1925. BANK OF NEW ZEALAND

Thirty-one years after the famous reconstruction, the bank which handles half the banking business of the Dominion presents another favourable balance-sheet. They are thirty-one years of State control within reasonable limits, and every year a good one. When the previous year was beginning it had been determined to substantially increase the bank’s capital—so well had the large business in its hands been conducted. That year could only obtain part of the benefit of the increase, but results were, nevertheless, very satisfactory. The year now under review by the chairman of directors—the president, Sir G. Elliot—has received the full increase, and the results of the use of the new capital have fully justified the step taken. Before that result other banks of the Dominion had given justification to the policy by determination to seek more capital themselves. The forward policy has now increased the bank’s capital to nearly nine and a quarter millions, including a reserve fund of over two and a half millions and undivided profits of over half a million. After provision for every possible contingency, the bank’s net profit shown is i,'Biq,ooo. Its turnover is enormous. The State’s capital draws a handsome dividend, and the taxation paid by the bank to the State is large. Is there anywhere a State Bank that does as much for the State? The bank has kept strictly within the limits of good banking principle, avoiding long-dated advances. But the need for such advances is met bv the Government through the Advances to Settlers policy. It was Sir Joseph Ward who saved the banks of New Zealand from that danger by initiating the advances policy. This debt of gratitude has not been forgotten by the country. The country was curious to know what the president would have to say about the gold standard. He has drawn the line between exchange and currency. The exchange has, as he has shown, improved very greatly. The question of a gold currency stands over. A review of the produce markets is always made on these occasions, and Sir George Elliot has complied with custom more briefly than some of his predecessors, but sufficiently to stamp the outlook as distinctly good. But Sir George is not entirely a fair weather prophet. He sees in the balance of trade a great danger to the stability of this country. His statement cannot be gainsaid. But in the great volume of our trade a favourable balance of only about four millions is very inadequate, as it falls far short of the amount necessary to meet the interest due outside the Dominion. We agree with Mr Watson that the president touched this matter but lightly. The occasion required a volcanic jWarning. The question is, however, largely in the hands of the bankers, and the country expects them to see to it.