SHE BANK OF NEW ZEALAND

Otago Daily Times, Issue 16415, 21 June 1915, Page 2 (Supplement)

SHE BANK OF NEW ZEALAND

ANNUAL MEETING. WEMJENGTON, June 18. The annual meeting of shareholders of &e Bank of New Zealand -was held at the bead office to-day. The chairman of directors (Mr Harold Beauchamp) presided. The annual report and balance sheet and profit and lasa statement shows that the profits, alter providing for the expenses of inajaagement, aft bad and doubtful debts, and after making provision for tho annual donation to the provident fund and for a bonus to the staff, are £396,166 16s 9d. From this has to be deducted the interest on guaranteed stock (£26,680 15s 4d), leaving £369,486 Is sd. Of this earn the directors .have allocated in redaction of bank premises and furnituro £50,000, leaving a balance of profit for the year of £319,486 Is sd, to which has to be added the balance brought forward from last year (£51,608 8s IOd), in all, £371,094 10s 3d. From this sum thero has been paid an interim dividend at tho late of 6 per cent on the A and B preference shares (£45,000), and on the ordinary 6hares (£55,699 19s 6d), making together £100,699 19s 6d. Thie leaves available for distribution £270,394 10s 9d- This, directors propose, should be disposed- of as follows: — Dividend at the rate of 4 per cent, on tho A preference shares, £20,000; dividend at the rate of 6 per cent on the ordinary shares and the B preference siares, £72,868 Oβ 8d; bonus at the rate of 3 per cent, on the ordinary shares and the B preference shares, £35,891 18s; transfer to reserve fund, £84,463 12s 10d (making the reserve fund £2,000,000); leaving the balance to be carried forward £51,170 19s 3d. The balance sheet shows the following , : — Liabilities—Capital: * 4 per cent, guaranteed stock, £528,988 10? 6d; A preference shares, fully paid, issued to the New Zealand Governmont. £500,000; B preference shares, fully paid, issued to the Nerw Zealand Government £250,000; ordinary shares, 150,000 et £6 13s 4d (£1,000,000), paid up to £3 6s 8d per share, £500.000; new ordinary shares, 75,000 o± £6 13s 4d, £500,000 (of which there has been paid up at date £475,710); reserve fund (of which £1,000 000 is invested in tho British Government securities, the balance being employed in the business of the bank), £1.915,536 7e 2d: notes in circulation, £1,676,051; deposits, £18,741,657 3s 3d; bills payable and other liabilities (including provision for doubtful debts and for depreciation in investment securities), • £1,670,103 7s 10d; balance of profit and loss, £270,394 10s 9d;—tobaL £26,528,440 19s 6d. Assets: Coin and cash balances at bankers} £4,617,060 16s 9d; bullion on hand and in transit £210,461 9s 3d; money at call and short notico, Government securities, and other securities in London, £5,136,996 14s 7d; bills receivable in London and in tran6it, £3,301,301 8s lid; investments in the colonies and colonial Government securities .£718,681; municipal securities, £242,906 6s sd; bills discounted, £1,186,458 10s lid; other advances and securities and debts due to bank, £10,662,707 4s sd; landed property, premises, eta, £451,867 8s 3d;—total £26.528,440 19e 6d. Profit and loss—dividend at the rate'of 4 per cent, on £500,000 A preference shares ksaed to the New Zealand Government in terms of "The Bank of New Zealand Act 1903," £20,000; dividend at the rate of 6 per cent, on £500,000 ordinary share capital, £30,000; bonus at the rate of 3 per ,cent on ordinary share capital, £15.000; amount transferred "to Reserve Fund. £175,000; balance carried down, £51608 8s lOd;— total, £291,608 8s 10d; 12 months interest on guaranteed stock, £26,680 15s 4d; amount written off bank premises and furniture, £50,000; interim dividend paid on December 12, 1914, 6 per cent, on £500,000 A preference shares, £30,000- 6 per cent, on £250,000 B preference shares, £15,000; 6 per cent, on ordinary shares, £55,699 19s 6d; balance, being tho net profit for the year/ £319,486 Is sd; amount brought forward from last year, £51,608 8s lOd;— totalling £371,094 10s 3d; less interim dividend paid as above, £100 699 19s 6d; balance, £270,394 10s 9d;—total £447,775 5s 7d; balance March 31, 19H £291,608 8s 10d; balance brought down, £51,608 8s 10d; profits for the year ended March 31, 1915, including recoveries, and after the payment of and provision for all interest due and accrued on deposits, provision for bad and doubtful debts, for the annual donation to the Provident Fund, and for a bous to the staff, £755,239 15s— jess salaries and allowance at, head office and 223 branches, and agencies (£211.320 12s 2d), directors' remuneration, including London Board (£4172 5s 2d), general expenses, including rent, stationery, telegrams, postages, travelling, .repairs to premises, etc. (£66,722 Os 7d), audit expenses' account (£2309 8s 6d), . rates and taxes (£74,548 lls IOd), in all, £359,072 18s 3d— balance, £396,166 16s 9d;—total, £447,773 5s 7d.

Reserve Fund—Balance per last statement, £1,550,000; pVemtum on new shares issued, less expenses of issue, £365,536 7s 2d; amount to bo, added from profits for the year ended March 31, 1915, £84,463 12s lOd;— total, £2,000,000. The Chairman, in the course of an interesting address, said:—

"Profit and £oss.—The net profits for the year, after paying interest on guaranteed stock and making all necessary appropriations, including provision for this bank's annual grant to the Provident Fund v as well'as a bonus to the staff, and the allocation of £50,000 in reduction of bank premises and furniture accounts, amount to £319,436, as compared with £308,490 at 31st Match, 1914. , Adding the amount brought forward from last year, (£51,608), and deducting the amount of interim dividend at 6 per cent, paid in December (£100,699), the sum available for distribution is £270,394. The directors now propose to pay a further dividend of 6 per cent.-, and a bonus of 3 per cent, on ordinary and 'B ' preference shares (making 15 per cent, for the year), and a further 4 per cent, on 'A' preference shares (making 10 per cent, for the year). The distribution to shareholders will therefore amount to £229,459 for the Of the balance remaining, it is proposed to transfer £84,464 to the Reserve Fund, and to carry forward £57,170. STAFF.

" The numbers of our staff applying for leave of absence, to enable them to join the New Zealand Expeditionary Forces, are largely in excess of those which it has been found possible to spare. The bank's business is such that it cannot bo carried on by the employment of casual hands as required. A certain proportion of the staff, must be men with special banking know-' ledge and experience of our methods of ■working. "Wo are adjusting the staff as we have opportunity, and are allowing more men to join the ranks of the contingents as they can be spared. The number of our men who have gone to the front or are in training now totals 104. To colonial officers half-pay is being allowed, and they receive in addition their military pay. To the London men we are allowing full pay, as their military pav 13 on a lower scale. Many of tho London banks are allowing full pay to those of their staff on active service.

_ "To enable us to set free still more men it has now been decided to engage a limited number of women clerks whoso services, it _ is considered, can be satisfactorily utilised in certain departments of our work. As those clerks are gradually introduced we shall be able to If.aerate more men for military service. _ Yon will see, therefore, that we are doing all in our power to encourage those young men of our staff who are capable of military service to take up ai-ms in the Empire's cause. Those that effor will, I am sure, acquit themselves creditably. The names of several at.tho front arc already inscribed ori the roll of honour, having either sustained wounds or lost their lives in the actions at the Dardanelles. /\ "It is hardly necessary that I should add how greatly we all admire their patriotic conduct. In common with all New Zealanders, we are proud of the soldierly qualities which they and New Zealand's other gallant sons have displayed and are displaying in the struggle with the Turks, and wo confidently look, before long, for a successful termination of the enterprise in which they are engaged, and to hear that the flags of. the Allies are floating over Constantinople, and that the Bospborus and the Dardanelles hare become opei! waterways. WAR AND FINANCE. " It is impossible for mo to avoid reference to trie great conflict that is now convulsing the world. Tho war, in --which practically all the Great Powers are engaged, haa had, and must; continue to have, a very disturbing influence on finance,' trade, and commerce. Great and profound economic ohanges have occurred, and no one can as yet faintly estimate the far-reach-ing effects of the titanic struggle. "The measures adopted by the British Government to meet the financial difficulties precipitated by the war were outlined briefly in my last address. They have proved on tho whole effective, and have gone far to 'assist in maintaining the pre-eminence of London ae the world's great financial centre. Whilst other countries have found it necessary to prohibit the export of gold, Britain has preserved its traditions and maintained throughout a free gold market, except, of course, for exports to enemy States/ " The prevailing conditions m the great monetary centres of the world axe bound

to be reflected, sooner or later, in our local market; and, as I see no indication of easing prospects in the centres, I am forced to conclude that money values are likely for the present, to remain comparatively high. It is true that there is not, in the meantime, any shortage of money; but this is largely owing to the fact that enterprise is stagnant, and that trade- generally is running in much restricted channels. When the future is more assured, tho supplies of floating capital will probably bo quickly absorbed, and money may become source. "After the-work over. If the. conditions of the international settlement arc such u« hold out prospects of a lasting peace, and of cessation of competition in armaments, there may bo after a few year 3 a permanent drop in money values, but I do not think that point will bo readied for some time. Theso are, however, merely iny personal views and I wish it to be 'understood.that I lay no claim to prophetio attributes. "In theso Islands our position'is a highly favoured one. The horrors of this war — the most distressing of all wars—are known to us practically only through the newspapers. But for tho fact that eomo of the best of our manhood has gone, forth to do battle for tho Empire, and that tho list of our dead and wounded is a long one, wo should bo almost unaffected by tho momentous struggle that is in progress on tho other sido of the world. Indeed, it may bo truly eaid that we are actually benefiting by tho tragic events that are being enacted, inasmuch as the war demands havd sent up tho prices of our staplo products to a level never before touched in recent years. "In this connection, it is interesting to note tho values which have ruled in the London market for some of our principal products this season, as eonroared with, the previous year.

with the patriotic enthusiasm of the dominion, these circumstances, which have placed our people in a position to lie liberal, have inspired rich and poor alike to a degree of generosity quite unprecedented, and substantial sums have been voluntarily subscribed for every conceivable department of relief and assistance. Much yet remains to bo done, but we aro persuaded the New Zealand people will bo true to their call and do their duty. "As far as we aro concerned as a board, we consider that, -under normal conditions, wo are justified in regarding ourselves as your almoners only to a email extent; but, existing circumstances being so exceptional, we have felt constrained to subscribe a total of £3050 direct to the relief funds. We have also remitted moneys of various relief organisations to London free of exchange, which service has been equivalent to a further large donation, as exchange on London has commanded a very high premium for many months, and still stands at a high level. This further donation, tbuß indirectly made, is equivalent to upwards of £1800. When we add to this the halfpay which we are- allowing to all our officers on active service with the forces, and which at present amounts to some £7800 per annum, it will be seen that we are making a large contribution for war and relief purposes. We havo no doufot, however, that, in tho circumstances, our action will receive your hearty endorsement. TRADE, INDUSTRY, AND INTERNAL FINANCE. "The New Zealand quarterly average banking statements indicate an easy financial position in tho dominion. Comparing the figures of March 31 last with those of March 1914, wo find the following differences in the aggregate averages of all the banks:— Deposits. Interest bearing—increase £316,029 Non-interesfc bee-ring—increase ... 2.482,961 £2,798,990 Advances. Discounts!— decrease .„ ...£382,690 Net Other advances— increase ...£384,324 Increase 1,634 Improvement during the 12 months in tho position of the public with the banks £2.797,356 ' "The Post Office Sayings Bank figures show a similar large accretion of funds. The excesees of deposits over withdrawals, for the half-year ending March 31 last, readied the large total of £1,188,071. '"These improvement have been contributed to largely by (1) the inoreased value of our exports, and (2) the reduced value of our imports—the margin between which will probably be lound, when the returns for the year ended March 31 are complete, to be the highest that has been touched for many years past. "For the year ended December 31 lastnthe latest date to which complete returns are available—the figures are:— , Exports (excluding specie) ' ...£26,453,900 Imports (excluding specie) ... 21,5}4,200 Surplus exports ... £5,109,700 " The surplus for the previous year ended December 3L 1913, was £1,156,731. " The increase in the exports is due in a large measure to the enhanced prices commanded by our primary products. "The decrease in imports is attributable to several causes:— (1) The caution exercised by merchants and importers when ordering supplies in the early days of the war. (2) A lessened demand consequent upon the more economical style of living that has been in. vogue since the war , began. (3) The impossibility of obtaining many lines of merchandise from Germany and Austria, and the inability of British manufacturers and exporters to fill orders. (4) The lack of tonnage and tho difficulty of shipping ■ owing to congestion at the London docks. "The export figures for the quarter ended March 31 are available and amount to £11,205,000, as against £9,993,100 for the quarter ended March 31, 1914. The import figures for the same quarter are, however, not complete, but the Customs revenue . for' the quarter is said to amount to only £737,000, as against £935,000 for ,tho quarter ended March 31, 1914, showing that there has_ been a substantial fajlinj* off in importations. This is, of all in the direction of widening the margin between imports and exports, thus increasing the credit balance on the dominion's trado as ■ a -whole, and, consequently, the funds available herd

"A statistical comparison of the trade of New Zealand with previous years would bo apt to be misleading, because of the great disturbance caused by tho war. The difficulty of importing goods and the advances in prices on the one side, and tho high prices for exports on tho other side, make an examination of the position almost impost sible, for we have always to bear in mind that, after the war, drastic changes will follow. The values of some commodities must necessarily decline, and others will probably advance; and a new view must be taken of the situation. '

"Financial ease is apparent, but it is ease which, like the calm before the storm, may presage strain and stress later on. The accumulations in the hands of the banks are undoubtedly duo to apprehension with regard to the future, and a desire on the part of the depositors to be prepared for possible eventualities. This is clear from tho fact that tho increases in deposits are principally in tho non-intarest-bearing class—i.e., the current accounts.

"This is not an encouraging feature, because it indicates, to some extent, commercial and industrial inactivity. Building, except in tho war of Government undertakings, is largely at a standstill; and investors are disinclined to • enter into commitments. Business on tho stock_ exchanges of the dominion is also verv restricted.

"At the same time, prices of shares in regular dividend-paying financial and industrial companies stand at a satisfactory level, and shares are well hold, there being few sellers. At the oommericemnt of tho war a "sharp decline in market values occurred, but as confidenco returned recovery became rapid, and to-day there arc few stocks in favourite, companies which can bo purchased to yield more than 5 to 6 per oent. '"The export of meat from the dominion, otherwise than for tho British Government, is now Early in the year the Now Zealand Government, acting on behalf of the Imperial authorities, commandeered the whole of the meat in store and all future surplus for export. Tho meat is purchased on the basis of a fixed tariff, which gives reasonably remunerative prices, while, at the same time, it prevents exploitation of the Imperial Government and of tho British consumers by speculative buyers. "It seems to me that a similar scheme, controlled by the Now Zealand Government, and worked probably in i co-operation with the British Government, would be effective to put a stop to operations by the American Meat Trust in this dominion, should any dangerously aggressive action here bo attempted by the trust after the close of the war. "Owing to the serious shortage in tho wheat supply of the dominion, importations of wheat and flour have- been made from America, and Australia, a large part representing purchases made bv the Government in the public interest. The Government's judicious action in this respect undoubtedly has had the effect of steadying tho market, and preventing an advance in tho price of "tho staff of life" to a figure which would almost certainly have necessitated reduced coneiimption. Tho pressure upon yteamer freight space from New York and San Francisco, owing to this nnd other causes, has_ been so great that quite a number of sailing vesesls have boon recently chartered for the trade. "The conditions of the dominion'a staple in-

dustries leave little room for complaint. It. is tnie lint in *oino parte serious droughts have prevailed, mid that, owing to the commandeering of ships for tho transport of troops, is temporarily a scrioin shortage in freight facilities, ' with somipossible loss k> farmers, who. liming brought, their stock into condition for killing, have found themselves unable to sell to the freezers, or get thr-ir Ktix-k killed and frozen on their own account. On the other hand, phenomenally good prices, us 1 havo oh-endy shown, lmve boon rulinyr for wool, frozen meut, nnd dairy product-.; mid the better prices linvo, in moM, <'a«<-s, more than compensated for tho reduced yields. "As a consequence of the deficiency of freezing and storage facilities, movements hiivo l>ooll initiated at various points throughout the dominion to establish new freezing works and refrigerating stores. In considering all such projects, it, should of course not hr overlooked that tho present is a time, when exceptional and abnormal conditions prevail, and -that, in ordinary circumstances, the existing facilities for dealing with the frozen products of tho country are, probably, in most enses quite adequate. It will therefore be politic that the promoters of such Bchomrs should consider carefully whether or not there is a permanent opening for the establishment which they have in contemplation. If what they have in view is designed simply to meet the present temporary necessity, wisdom would. I should sny, dictate tho abandonment of the proposed venture. THE OUTLOOK. " I think we may look for a continuanco of good trade. The end of tho war may bo followed by heavy taxation and unemployment in those countries now engagoii in hostilities, but New Zealand' is stijl bound to find an outlet at rerrfunerative prices in Great Britain, the Continent of Europe, and tho United States of America for her wool, frozen meat, dairy produce, etc. It would, of course, bo unreasonable to expect tho abnormal rates at present ruling for tho articles enumerated, but there is little doubt that the demand which will then exist for* our primary products will onablo us to face the future with equanimity and assist ns in discharging the heavy liabilities •we have directly undertaken in connection with tho war. " Tho war is costing the Government a substantial sum, and I am convinced that prudence and reasonable economy aro being exercised in the expenditure. The cost of the war roust bo met by increased taxation, and no doubt we may expect to have proposals submitted under head in tho course of a few days. The country is" well able to face this inoreased taxation; indeed, looking at all the circumstances, it was never better fitted to stand such a preesure.

"As I have already mentioned, the commandeering of so many of our insulated steamers ior troopships has hampered exporters considerably, <ind Ivas caused somo inconvenience; but the Government is making every effort to provide a sufficiency of insulated ships, und it is anticipated that tho difficulty will be overcome bv the end of July. "Some change in the incidence of trade is certain to follow the rupture of tho old commercial relations occasioned by tho war, and new trade l-outes aro already being pricked out on tho map. Germany," for long years to come, will, I hope, be commercially ostracised. The trend of public feeling the world over seems to point in that direction. New outside- markets will therefore have to bo exploited, and fresh industries, within tho Empire itself established and developed. In seconding the motion Mr Martin Kennedy congratulated tho chairman upon his most interesting and informative address. The chairman having eo fully reviewed the conditions, there was little for him to add beyond a word of congratulation on tho position of tho bank. No doubt it was a matter of great satisfaction to them all that, notwithstanding the trying time in tho financial world, they were able to lay such a report and balance sheet before the shareholders. He commented specially on the fact that the reserve fund had now reached tho £2,000.000 mark. At one time, ho mentioned, ho was strongly opposed to tho Government being permitted to take up any shares in the bank. Circumstances had, however, led to a radical change in his views in this respect, and he was now propared to admit that tho combination with the Government was a happy one, and calculated to achieve the very best results, both for the bank and the country. The motion for tho adoption of the balance sheet was carried.

In moving a very hearty vote of thanks to the board of directors and staff, Mr John Mill said he was sure that there was not one shareholder but would agree that the board and staff deserved great credit for the way in which they had handled the business of the bank during the last fewyears.