UNION BANK OF AUSTRALIA

Otago Daily Times, Issue 18348, 12 September 1921, Page 9

UNION BANK OF AUSTRALIA

INCREASE OF CAPITAL AUTHORISED. NEED FOR CAUTION AND ECONOMY. BONUS TO THE STAFF. (FROM 008 OWN COBRESrONDENT.) LONDON, July 28. At the annual meeting of the Union Bank ot Australia, Mr H. P. Sturgis (chairman) referred with regret to the death of Mr VV. K. Mewburn, whoso connection with the bank had been unique, beginning with a clerkship in 1854, and ending with a seat on the board on his resignation, from the position of manager after 45 years' service. The year's working w;ib very satisfactory. The profits allowed of their placing £20,000 irt reduction of bank premises in Australia end New Zealand, adding £120.000 to the reserve fund, which now stood at £2,750,000, aroiT declaring a dividend at the rate of 15 per cent, per annum, free of income tax. 'xue figures of the year under review, compared with those of a year ago, showed a decrease of £1,276,000. The increase in advances was principally caused; by accommodation given to merchants to finance abnormal imports of goods in the latter half oi last year, and was reflected in the decrease in bills receivable caused by the withdrawal of funds from this side. While the gross profits were higher by about £257,000, expenses were higher by nearly £200,000. Of Ihis £IOO,OOO came under the heading of provision for income tax and corporation profits tax, and rsanuneration of staff in Australia and New Zealand was about £70,000 highor, some £40,000 being due to the higher rate of war allowance granted to the staff during the period under review. EXCHANGE POSITION. The exchange position in Australia, as in other parts of the world, had been difficult. While exports remained practically stationary, imports showed the large increase of £61,000,000 as compared with 1919, or 70 per cent. In New Zealand! imports increased fiv 100 per cent, from £31,000,000 in 1919 to £52,000,000 in 1920, whereas exports declined from £53,000,000 in 1919 to £46,000,000 in 1920. The financing of the abnormal imports imposed a heavy strain on the resources of the Australian banks in London. It became necessary to impose severe restrictions on drawings on London. This policy, though cuusing some 'inconvenience to traders for a time, was very necessary in the interests of Australasian trade generally. The proceeds, of wool, wheat, aasd butter had afforded some relief, and the position had become easier. In view of the depressed! state of the markets for Australian, produce generally and the uncertainty existing in all markets, it was difficult to forecast when exchange conditions would become normal. PRODUCE MATTERS. The Australian wheat harvest was estimated' to have yielded 130' to 140 million bushels, of which there should be an exportable surplus of about 100 million bushels. The crop returned on estimated average of some 14 bushels per acre, a record average for recent years. The wool clip, as a result of drought in 1919 and the early part of 1920 was affected in quantity and quality. The present position of the wool trade is a very difficult one owing lai-gely to considerable accumulations held over from previous clips due, partly, to the policy in the pest <a the Imperial Government in holding off from the market and also largely to the German market having been closed during the period of the war, in'pre-war days their annual consumption of colonial wools amounting to some 800,000 to 900,000 bales. German buying has been much in evidence recently, but owing to adverse exchange, both they and other Continental countries are considerably hampered in their operations. The dairying industry continued to expand, and generally a satisfactory year had been experienced, with prices for products ruling high. The frozen meat trade waa in an unsatisfactory state, due to a drop in values and increase in cost of freights. Since the beginning of this year trade in Australia and Now Zealand had been less active. This condition, and the lower prices ruling for Australasian produots, rendered the outlook for the future somewhat uncertain, but in the immediate future he thought they must look for comparatively quite trade throughout Australasia. It waa necessary that caution and economy should be exercised everywhere, and if this were done in Australasia ho had no doubt os to the future prosperity of those great countries.

THE STAFF. The Australasian general manager (Mr Chambers) was in England, and conferences with him had been of great value. The staff had continued to show the same loyalty as they had done in the past. It was therefore with pleasure that the directors felt justified in granting a bonus, on account of the still hierli cost of living, to the whole of the ntnff in Australia and New Zealand, giving a higher rate to married men with comparatively low salaries, on whom the cost of living fell most heavily. The " war allowances " which had been paid during the war and for some time afterwards were merged in salaries in the course of the year under review, thus making a certainty to the staff of the extra amount, which was liable to reduction or entire withdrawal. The directors asked Mr Chambers to convey to all the officers in Australasia, appreciation of their services and the _ desire that the good relations mi<rht continue.

Mr J. Hodges, in congratulating the hoard, [remarked that the bank had passed through pery critical times in the past, and had [always come out on top.. Their capital .was only £2,500,000, and they had a reserve of b? 750.000.

To Mr H. S. Vincent it had always been a mystery -why the bank had not a greater ru;mber of brandies in Australia, nartieularly in the agricultural districts of New South Wales, instead of, perhaps, in some part of Wrat Australia. however, was a matter for the consideration of the directors. In view of the present methods of taxation, ho suggested that it would be better to remove the head office to 'Australia.—(Cries of "No! no!") THE CHAIRMAN'S KEPLY. Mr Sturgis remarked that tho acquisition if new branches was a question always before ;he directors. It was a difficult question, and fio one was more able to deal with it than Mr Chambers. The corporation tax was a lt-avy burden on many companies, and could not be looked upon as «, very pleasant one. Fie could not say'exactly what it meant to ;he bank, but it was a very heavy impost on business. The resolution was carried unanimously. The report end dividend were adopted and 3ir W. B. Perceval and Mr H. D. Plowor retiring directors) were re-elected to the ward.

At a special general meeting it was revived that the capital of the bank be injrsased to £9,000,000 by the creation if .00.000 additional ordinary shares of £ls each. The chairman stated that the directors icd come to no decision as to when an ssuo should be made. They were of opinion hat the business of the bank called for an •ncrease of capital, and they considered hat anjssne should be made whenever the hue appeared favourable. Mr Wolf Harris moved a vote of thanks to ho chairman and directors, and to the staff, or their conduct of the affairs of the comlanv during the year. The Rev. M. Nachim seconded the resoluion, which was unanimously carried.