BANK OF NEW ZEALAND.

Otago Witness, Issue 2372, 17 August 1899, Page 15

BANK OF NEW ZEALAND.

THE ANNUAL MEETING. WELLINGTON, August 10. The annual meeting of the shareholders in the Bank of New Zealand was held this afternoon, the chairman of directors (Mr J. JR. Blair) being in the chair. The attendance was small. The Chairman, in moving the adoption of the raport and balance sheet (already published), said: — The following iB a comparison of the figures of the" present balanoe sheet '■with those of the balance sheet at 31st March. 1898:— ' LIABILITIES. Capital, March, 1898, £2,893,042; March 1899, £2,912,354— in increase of £19,312. This increase represented the amount collected during the year on account of the second call. Out of atotal call of £500,000, there had now been received £412,354. Notes in circulation, £593,905 in 1898, as against £666,223 in 1899, an increase of £72,318. The note circulation was one of the signs by whioh the public gauged the progress of the banks of issue. From this point of view, the expansion shown was vary satisfactory. The growth indicated increased trade activity and freer circulation of money. Of late better attention has been given to the condition of notes issued, and possibly, consequent on the cleaner state of the circulation, had tended to increase the number of notes in the hands of the public. Bills payable, £1,219,927 in 1898, as against £698,355 in 1899, a decrease of £521,572. This decrease was without significance. It was accounted for by the decreased requirements of the New Zealand Government in the way of remittances to London. The loan raised by the Government in the early part of the year rendered unnecessary the customary remittances for the provision of interest on oolonial indebtedness. Deposits, £7,626,140 in 1898, as againßfc £7,834,481 in 1699, an increase of £208,341. The increase shown was entirely due to the accumulation of moneys in the New Zealand Government account. The other deposits of the bank showed some decrease, due in a measure to writing off large reserves that had been held in suspense against certain old dependencies of the bank, and in part to tbe continued decrease of the bank's fixed deposits in London, where, he might say, the bank's policy was to contract its deposit connection. In pursuance of that policy, the ijank was now taking no fixed deposits in London, but was paying off all" aB they matured. Other liabilities, £260,202 in IS9B, as against £164,628 in 1699, a decrease of £95,574. This decrease was accounted for almost entirely by fluctuations in the departmental accounts — notably, by drawings on the contingency fund in adjustment of old dependencies, against which that fund was held as provision for contingent losses. Bills rediscounted, £34,375 in 1898, as against £4763 in 1899, a decrease of £29,607. This movement was of no significance. Tha item reprexpnted bills receivable, which the bank had discounted in London, and its increase or decrease was entirely dependent upon the financial condition prevailing in London from time to time. ASSETS. Money at short call, bills receivable, and securities in London, £1,460,309 in 189S, as against £1.803,396 in 1£99, an increase of £343,037. The increase was due to the accumulation of funds in London, principally as a consequence of bringing to account of the New Zealand Government loan moneys already referred to. Investments in the colonies, £2,609,888 in- 1£93, as against £2,540,288 in 1899, a decrease of £69,600. The decrease shown was due to the redemption of the Assets Realisation Board debentures during the year. Bills discounted, £1,719,930 in 1893. as against £1,613.911 in 1899, a decrease of £106,019. Advances £4,218,318 in 1893, as against £4,025,236, a decrease of £256,082. A large part of this shrinkage was accounted for by the writing off of amounts held in reserve against doubtful dependencies. The balance of the decrease was normal, and might perhaps be taken io some extent as an indication of greater prosperity on the part of many of the Rank's clients, who required to lean less heavily upon the bank in connection with their business than they had hitherto done. Only £425 remained outstanding in respect of the £450,000, which the first call of £500,000 was estimated to produoe. This account should disappear altogether during the

coming year. Lancled property, premises, T ntc. (£^15,577), showed a decrease of £16,260, accounted for- by the sales of properties not ' now required for the purpose of the bank — principally the _premises"f qrmerly occupied by the bank at Newcastle, New South Wales, The Bank of New Zealand Estates Company " assets in liquidation (£455,063) showed a decrease of £85,378. Of this, £30,617 was accounted for by the writing dowD of the assets out of the bank's profits for the year. The balance of decrease represented realisations effected during the year. He reminded shareholders that tbe appropriations made for estimated losses on dependencies of the Bank of New Zealand Estates Comoany • covered only such accounts as had been finally determined at 31st March last. The 'cost of the Audit department for the 12 months under review was £2725 19s Id, a« -against £2703 for the preceding year. This'included a continuous audit of the Assets Realisation Board as well as of the board" expenses of management. The precentage'of management expenses to gross profits for the tvv> year' s^dscl respectively 31st March, 1833 "and 1699, showed: Gross profits, 1899. £391.7?5j l^S, £365,586; management expenses, ]?."?£ £183,411; 1898, £183,0:6; percentage of expenses to profits, -1899, 46.8 per cent; IS9B, 50 per cent. The total numiwi 1 of c-.rrfnt accounts in March, 1899, was 33,','jkj. Mr Blair went on to refer- to the position tha bank held in the colony, and the inie ' portant factor it was in the oolony's welfare, and pointed out that the bank held between 30,000 and 40,000 accounts and employed about 600 officials, "drawing about per annum. This was -no great eomforfc fo" " shareholders, but it was ft, point worth' men"-" tioning. The year had -been a prosperous - one with the bank, and "he thought he would be quite justified in Baying' 'that the coming' year would be an improvement on the last. Phe bank had made certain economies, whioh would exhibit themselves in next year's balance sheet. The present position was a satisfactory one, except that shareholders were not drawing dividends. But it must be remembered that the increased prosperity of the bank wont to strengthen their position. It was hard io sa.y when a dividend would be paid. They would have to rely on developments without depending on prophecies. The development of the gold industry in the colony had been beneficial to the bank. Low prices had ruled for produce, but this had been compensated for by a bountiful harvest, and it must also be borne in mind that people as a whole benefited by low prices. The development which was going on in shipping must have an undoubted beneficial effect on New Zealand trade. The reduction of freights must tend to stimulate the prosperity of the colony, and in this increased prosperity the bank must participate. He was sorry he could not say when a dividend wmild be f o#th- j coming, but shareholders had reasonable hope • of ultimately getting one if the bank con- | tinued to prosper as it had been doing. The money of the shareholders had gone into eir- } culation towards the welfare of New' Zea- i land by helping to foster its industries. This might not be very comforting to shareholders, but, nevertheless, it was a fact. .The .bank was now in every sense '" the Bank of New Zealand." He moved the adoption of the reports and balance sheet. - -j Mr 11. Beauchamp seconded the motion, i Mr ICebbell said he could not see the necessity for two boards — an Assets Board and a Bank of New Zealand Board. He would be quite satisfied if the latter administered both institutions, as it would save money. If the Government could be induced to hand the assets back to the bank they could be handled more economically. The directors should move in this direction. _. -- j Mr Blair said this proposal would not suit the bank. He preferred to give the Assets Board all of the assets if the Assets Board would give the bank the money. ! Mr T. W. M'Kenzie said no doubt the As- ' sets Board wa9 the weak spot of the bank on .' account of its heavy expense. He complained ! that shareholders knew nothing about the I Assets Board, and they appeared to do just as they l^ked. It looked as if they would absorb all the assets in payment of salaries. It would have been better if the Government had taken over the realisation of the assets, because the board was very slow in realising on the properties. The Land for Settlements Act had been against them in this. An endeavour should be made to sell mere of the properties without actually forcing the sale. He would like this aspect of the question brought under the notice of the Government. He complimented the chairman upon his very , full, clear, and correct statement of the bank's position. i Mr W. Coffey asked who were the respon- ! sible officers of the Assets Board. | Mr Blair said the baak directors had absolutely no control or Btatus in the matter. '• Messrs Todd. Seddon, and Fraser were the • Assets Board, with Mr Foster as general manager. He sympathised in a measure with Mr M'Kenzie's view, and thought if some basis could bo arranged for finality it would be better for the bank. But at present the ; bank could not interfere in any way. Mr Coffey : Then it amounts to this : that the property of shareholders is in the hands of irresponsible officers. j Mr Blair : Oh, no ; that is not so. i Mr Beauchamp pointed out that the Assets | Board had to present a full report to Parlia- | ment each year. Last year's report showed

{ hat the boaxd had realised between £450,000 and £500,000 out of the £2,700,000. Mr Watson explained how the Assets Board came to be formed by the Legislature. In 1894- "the bank was in a bad way, and the Heposits-were running out. It was felt by the management that the deficiencies in the globo .assets might interfere with depositors' money/ and it was decided by Parliament "in the direction of separating these assets from the bank altogether, and the Government endorsed bonds of full face value to the bank. It was thought the Government should in consequence of this have a voice in the appointment of the Assets Board, and Messrs Seddon and Todd were appointed by the Government, and Mr Fraser. a very competent man, by the bank. If the bank took over these^ assets again they would have to "be responsible for the deficiencies. The Land for Settlements Act had done a lot to retard the sale of the properties. The motion for the adoption of the report and balance sheet was agreed to. Mr T. W. M'Kenzie moved a hearty vote of thanks to the directors, general ""manager, and stuff for the efficient manner in which they had carried on the business of the bank. He said they had done good work. He referred to the question of economy, and although he <vas not in favour of small salaries, he thought some of the high-salaried men should be looked to in. regard to. reductions. If the directors sa\v they could carry on the bank's work efficiently with smaller salaries, they should do so. Mr Coffey seconded the motion. He thought the directors were doing their very best, and they had the fullest confidence of shareholders throughput the colony. He hoped they would still further lift up the bank,,. > ■The motion was carried unanimously. „ Sir Blair briefly returned thanks. Mr Martin-Kennedy said there was an impression that the £50,000 a year paid to the Assets Board was a serious tax on the bank, but he wished to point out that the bank got interest on debentures of something like £80,000. oo the assets arrangement was really a benefit to the bank of something like £20.000 or £30,000 annually. That was the serious deficit that took place before this arrangement was made. If the colony wos willing to face a deficit of one million on these assets the bank would then go free. It would be a good thing for the bank if the colony would say " we will Jet you have the debentures and keep the assets." The bank could then go on fairly and freely. Mr Bpauchamp said that what would afford the bank the greatest possible relief would be to obtain a release from certain large lander assets, which could be taken up by the ' Government for close settlement. He believed the Government could be persuaded "to do this. This terminated the business-