BANK OF NEW ZEALAND

Otago Daily Times, Issue 14699, 6 December 1909, Page 3 (Supplement)

BANK OF NEW ZEALAND

HALF-YEARLY MEETING. WELLINGTON, December 3. Tho half-yearly meeting of the Bunk of New Zealand was held today. Mr 11. Jtamchamp, chairman of directors, in tlio course of his address, said:— ■ When addressing yon in June last I mentioned that, consequent upon the con- , scrvativc policy then being pursued by : this ami other banks trading within the ', Dominion, you should be prepared for a ' diminution in our profits. '-Our accounts . for the half-year ended Soptcmber 30 show that these anticipations were realised. Still, the results for the period under review are gratifying, and I have no doubt that at the close of the present financial year we shall be able to transfer. a substantial amount to our reserve fund, and recommend the payment of a dividend and bonus equal to'that you received for the year ended March 31, 1909. In the meantime, for N tho half-year ended September 30 the board has declared an interim dividend of 5 per cent, to the holders of ordinary shares, and a similar amount in respect to the preference shares issued to the Crown. This dividend will be payable at head office on Monday next, 6th hist., and at branches on receipt of advice. Taxation.—lf the proposals now before Parliament regarding the taxation of banks become law, this institution will be called upon to contribute a much larger sum than it now does. Calculated upon the present volume of the bank's business, the increase will amount to not less than £15,000 per annum. It may interest you to know that our taxation under all* heads last year totalled £55,610. This, I may mention, included payments to municipalities and public bodies as well as to the Genera! Government. Willi these preliminary remarks, I desire now to congratulate the shareholders of the bank, and the country generally, on the belter and more promising monetary conditions that prevail to-day, and I do not think it would be improper on ; my part should I claim some credit for the banking institutions of Now Zealand : for the change that has taken place. A■. year ago the banks were criticised inside ' and outside of Parliament for not lending freely, notwithstanding that the'aggro- ; gate of the advances and discounts aa : al September 30, 1908, exhibited a very ' substantial increase on the figures of the | previous year. A good many people ara under the impression that it is tho duty of the 'banks to advance against all and every kind of security. The sooner this impression is removed the better. That the bankers of the Dominion pursued the right course during the past 12 or 18 months is proved to some extent by the easier tendency that now prevails in the local money market The banks are to- \ day in a much stronger position, and quite capable of furnishing all tho legiti- •' mate banking accommodation that may ' be required. The bank returns for the past quarter show the strength, and wo have but to compare the aggregate of the : fixed and free deposits and the advances , and discounts with the figures for the \ corresponding quarter last year to appro- '. ciatc the point. They are as follow:— j Fixed and Free Deposits. i Bank 1909. 1908. j New Zealand ...£10,199,028 £9,496*580 i Union 2,790,889 2,786,531 / : New South Wales 3,009,416 3,057,706 ) Australasia 1,736,224 1,771,716 / :' National 3,243,563 3,197,471 \ ; '£20,979,120 20,310,007 [. (Note. —These figures do not include • Government deposits.) , Advances and Discounts. • New Zealand ... £7,091,411 £8,480,888 i Union 3,160,610 3,371,232 New South Wales 2,505,193 3,211,533 ■ Australasia 2,756,305 3,296,663 ; National 2,657,188 2,857,643 \ £18,170,707 21,217,959 Last year the banks helped their customers liberally, and to this is largely due the fiict that the depression was mild s and of short duration.

It will be seen from tho figures I hava quoted that while in 1907-08 tho imports exceeded the exports by £1,380,261; for ; tho year just ended the exports exceed : the imports by £3,784,151. We are in j effect back to the position wo were in 1 in 1906-07, which was tho year of our '■• extreme- prosperity. It is necessary for j this country to show a substantial excess j of exports over imports, because we have to meet annually a very large interest . liability in connection with public a,nd ' private indebtedness. We liave,< it would ] seem, practically recovered the ground lost . in 1907-08, and we may now reasonably anticipate a further forward movement. There are many factors that warrant this expectation, and it may be as well to make brief reference to them.

Wool.—The prices obtained for the first of tho now season's clip sold in. Wellington and in other parts of the Dominion, as well as at the sales held in the chief centres of the Commonwealth, indicate very clearly that at the moment there is a strong demand for this staple, as was anticipated by our London advices. Values realised at these sales were considerably in ad-

ranee of those current a year ago, and latest London cables show that the mar-

ket presents features of great strength. On November 24 wo received a cablegram from our London offico as follows :—" The sales have opened with strong competition and large atbendanco of buyers. The market is good, owing largely to shortness of supplies. Prices arc to -jd per lb higher." Whother this firmness will be carried into the Now Year is problematical, for wool mon are

likely to be guided by their woll-k;iown maxim—" When wool is clear it is

dangerous; when it is very dear, it is very dangerous." Values ire extremely high just now, and only twice in the last 19 years have they been quite as high. ; There may be a reaction, but in any case i it is very probable that higher prices / than last season will be obtained. New ' Zealand will produce a larger clip this year, and, with the higher range of values, quite two millions sterling should ; be added to the income of the producers, i

Dairy Produce.—The exports of both : butter and cheese show very substantial increases, in quantity, and as values aro practically up to the level of last year, we are justified in anticipating a fairly substantial increase in the income from this source. Roughly, this increase should represent £250,000. Frozen Meat.—Mutton and lamb have, recovered from the depression that affected tliem in July and August, and ■' although the market is showing signs of weakening from pressure of supplies, tho Dominion should, with an increased output, be able to maintain its income from this branch of industry. There is some hope that developments in the chilled beef trade, with the aid of the Linley • process, will take place in the near ,' future. The success of the shipment by ; the .Marathon from Queensland is very encouraging. Hemp has improved materially, the c.i.f. quotations for January-March ship- , mcnls being well in advance of those ruling a year ago. Hemp is, in point of fact, at a remunerative level, and most ' of the mills can be operated to pay. An expansion in the output of this produce is, I believe, one of the certainties' of f-he ', season. Wheat and oats and other grain and , pulse will again add materially to the •' volume of our exports; and, taking all ! tho factors into consideration, I am of ) opinion that when tho produce year ends < on September 20, 1910, tho amount of ■ our exports will establish a record in . point of value. : The prospects before us are decidedly good, and this bank, with its ramifica- ' tions and close connection with the producers, must necessarily benefit. I cannot, however, refrain from repeating a warning note : caution must continue to marl; the policy of the trading community, and ' the land speculators throughout the Dominion must endeavour to moderate their views on values. New Zealand has greatly increased her obligations in recent years, and while she is well able to faithfully meet all engagements, there in no reason why the people should bo handicapped in their work by ridiculously high land values. Caution Ehotild be the watchword of the peoplo now and always.