THE BANK OF NEW ZEALAND

Otago Witness, Issue 3197, 23 June 1915, Page 5

THE BANK OF NEW ZEALAND

ANNUAL MEETING

INFORMATIVE ADDRESS

WELLINGTON, June 18

The annual meeting of shareholders of the Bank of New Zealand was held at the head office to-day. The chairman of directors (Mr Harold Beauchamp) presided. The Chairman, in moving the adoption of the report and balance sheet, said

“The momentous events of July and August last, involving the British nation in the great European conflict which is now raging, and the consequent unprecedented conditions under which the finances, trade, and commerce of the Empire have been conducted —and to which I shall refer more fully later —will, no doubt, have made the bank’s operations for the year of more than usual interest to shareholders. It will have been with satisfaction, therefore, that you have perused the directors’ report and balance sheet which were distributed some days ago, and from which you would see that the board, after making provision for all bad and doubtful debts, depreciation of investments, and other appropriations, was able to recommend a distribution to shareholders on the same scale as in recent years. “In accordance with our usual custom, I will refer briefly to the principal items in the balance sheet. “ Capital. —The capital of the bank, as at March 31, was as follows: —

“ At our December meeting I mentioned that the 559 shares unapplied for of the issue of 75,000 new ordinary shares were being offered to shareholders for sale by tender. Applications were received aggregating 10,794 shares, the average price tendered being £l3 3s 9d per share. Ihe 559 shares were allotted to the highest tenderers, at an average price of £ls 10s 6d per “With regard to the guaranteed stock, this, vou will note, .appears at £528,988, as against £1,000,000 in the previous balance sheet. The old stock matured on July 19 last, and, the bank’s finances being in a strong position, the board decided not to underwrite the new issue, but to give existing holders the option of exchanging their “The amount shown in the balance sheet represents the extent to which holders have availed of tbe option. The balance of the old issue, with the exception of a few thousands that have not yet come in, has been paid off; At a suitable juncture the bank will make arrangements to issue the balance of the new stock; but in the present unfavourable state of the London money market nothing can be done, and, the bank s finances being easy, wo are able, without inconvenience, to await the arrival of a favourable opportunity. “ The Reserve Fund. —Last year this fund was increased to £1,550,000 by the transfer from profits of £175,000. I have pleasure in announcing that this year’, by the addition of the premium received on new shares (less expenses of issue), £365,536, and the transfer from profits which the board proposes to make (£84,464), our reserve fund will stand at the substantial figure of £2,000,000. Of this amount £1,000,000 is invested in British Government securities. “Notes in circulation (£1,676,051) are more by £686,169 than at March 31, 1914. This large increase is due to bank notes having been legal tender since the commencement of the war. Gold has been gradually withdrawn from circulation, and notes have replaced it. “ Deposits, which include free, fixed, and Government deposits, stand at £18,741,657 — an increase of £671,044, as compared with the figures of a year ago. Government balances arc somewhat less; but deposits from the public—both free and fixed —are substantially larger. The causes and significance of these movements I shall deal with presently.

'• Bills payable and other liabilities stand at £1,570,103—an increase of £265,647 on the figures of 12 months ago. “ Coin, Bullion, Money at Short Call, ETC- —Coin and cash balances at bankers and bullion together amount to £4,827,522, as against £3,377.185 at March 31, 1914. The laciGctsGS in our note circulation and deposits—to which I have just referred—and the o-encral financial unrest render prudent the maintenance of larger gold reserves. “ Money at short call, Government securities, and other securities in London, together amount to £5,135,996. an increase of £60.243 as. compared with 12 months a tr o . The totals under this heading, together with the amount of bills receivable and investments in the colonies, are, I may mention, equal to 64.41 per cent, (or 12s lOd in the £) of the total liabilities of the bank to the public. “ You will be pleased to hear that full provision lias been made for all depreciation in investments, the whole of our investment securities having been written down to the minimum Stock Exchange official quotation at 31st March last. “ Bills receivable, in London and in transit, exhibit an increase of £137,220, as compared with the figures a year ago, and now stand at £3,301,301. I may say here that ample provision has been made for any deficiency in respect of bills hold, drawn upon banks, merchants, and others in belligerent States, and which, owing to the war, were not provided for when due. The aggregate of these, you will be glad to hear, is comparatively inconsiderable. “Advances. —As compared with the fiß'J res of a year ago, bills discounted are

loss by £93.568, and now stand at £1,186.458." Other advances (£10,662,707) show an increase of £582,248y-a natural movement in view of our additional capital resources.

“ Landed Property and Premises.— After appropriation from profits, now made, of £50,000, this item stands at £451,867, as compared with £449,577 a year ago. “The bank’s steady growth entails a considerable annual expenditure in providing suitable premises for the satisfactory conduct of its business. “ I may mention, with reference to the Wellington and head office premises that the accommodation which was provided 18 years ago, when the building was erected, ie proving quite inadequate for the requirements of our present greatly increased business, and the directors have had under consideration for some time the question of enlargement so as to provide the necessary additional facilities. It has been decided to place another storey on the building, and to enlarge the banking chamber by taking in practically the whole of the space on the ground floor. This will give a considerably increased area for the use both of the office staff and the public, and will, it is expected, meet all requirements for many years to come.

“ Profit an t d Loss. —i.he net profits for the year, after paying interest on guaranteed stock and making all necessary appropriations, including provision for the bank’s annual grant to the Provident Fund as vVell as a bonus to the staff, and the allocation of £50,000 in reduction of bank premises and furniture accounts, amount to £319,486, as compared with £308,490 at 31st March, 1914. Adding the amount brought forward from last year (£51,608), and deducting the amount of interim dividend at 6 per cent, paid m 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 ■''ear. Of the balance remaining, it is proposed to transfer £84,464 to the Reserve Fund, and to carry forward £57,170. “In looking over the profit and loss statement, it will be noticed that ‘ rates and taxes ’ are some £13,000 higher than last year. This increase is very largely due to the increased note tax, consequent upon the temporary expansion of, the note circulation. BOARD OF DIRECTORS. “To fill the vacancy occasioned- by the death of the Hon. Thomas Fergus, referred to in my last address, the Government have appointed Mr William Reece, of Christchurch, a director of the bank. Mr Reece is, as you are aware, well and favourably known in commercial and financial circles throughout the dominion; and he will, I am sure, prove himself a worthy and capable successor to the late Mr Fergus. 1 am pleased, on your behalf, to extend a welcome to him to-day. The term of office of Mr J. xi. Upton and myself expired on 31st March, and the Government have renewed our appointments. At the first meeting of the board in April last, my colleagues _ did me the honour of re-electing me chairman of the board for the current year. LONDON BOARD.

“At our last meeting we expressed our acknowledgment of the services rendered by the London Board in the groat crisis of last year. The local directors, as well as our chief executive officers there, still continue to watch over our London interests with their accustomed care, and with the usual satisfactory results. We have pleasure in again placing on record our indebtedness to them. 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 be carried on by the employment of casual hands as required. A certain proportion of the staff must be men with special banking knowledge and experience of our methods of working. We 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 pay is on a lower scale. Many of the London _ banks are allowing fuff 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 whose services, it is considered, can bo satisfactorily utilised in certain departments of our work. As these clerks are gradually introduced we shall be able to liberate more men for military service. You will see, therefore, that we are doing all in our power to encourage those young men of pur staff who arc capable of military service to take up arms in the Empire’s cause. Those that offer will, I am sure, acquit themselves creditably. The names of several at the front arc already inscribed on the roll of honour, having cither 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 Now 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 Bosphorus and the Dardanelles have bocoma open waterways.

“To the families and relatives of our men who have so far met their deaths at the front wo have to express our deepest regret and to tender our most sincere sympathy. If there bo anything which can help to assuage _ the anguish of their bereavement, It will surely be ‘ the solemn pride which must bo theirs to have laid so costly a sacrifice on the altar of freedom.’ Our approbation of those of our staff who have gone to fight the Empire’s battles must, however, not load us to overlook the more prosaic, though none the less valuable and exacting services of the staff who have remained. Those have cheerfully performed extra work, forgoing holidays, and undertaking longer hours of labour, in order that those desirous of volunteering

might bo able to got away. Wo arc appreciative of all this, and gladly place our appreciation on record. In many cases tho task of remaining and carrying on tho humdrum duties of daily life and labour under such unfavourable conditions has involved self-sacrifice and a devotion to duty almost as great as that displayed by those who have gone to the front. Each, in his own way, is serving tho interests of tho community and the Empire, and each merits and receives our hearty thanks and commendation. “In recognition of the good services of the staff during the year, the board has again paid them a bonus of 5 per cent, on salaries. In this bonus tho members of the staff serving with tho British forces shared on tho basis of full pay. BANK OFFICERS’ PROVIDENT FUND.

“During the year steps to extend the benefits derivable by the staff from tho Officers’ Provident Association have been taken, and carried to a successful conclusion. To secure tho additional benefits desired, tho officers have increased their contributions to the fund by per cent, of their salaries, and the board has increased the bank’s contribution by a further 2 per cent, of salaries. This makes the staff’s contribution 3| per cent. _on salaries, and the bank’s per cent., being, you will observe, just double that of tho staff. The vote of the staff was overwhelmingly in favour of the change, and tho proposal has therefore taken effect as fyom Ist May ultimo. ... “In view of tho splendid position m which tho bank now stands, it can afford to be liberal with tho men who have spent their lives in its service, and to whose labours and devotion its success has been so largely due. These views, I am sure, have your cordial approval. DEED OF SETTLEMENT. “It was our intention to have placed before you at this meeting the proposed amendments in the deed of settlement. I regret that it was not found possible to got all the necessary preliminaries arranged in time. Tho proposals have, however, been circulated among tho shareholders, and a special general meeting has been called for 22nd October next to deal with them. In terms of the existing deed of settlement, tho alterations that are approved of at that meeting will, before they can take effect, have to bo submitted and confirmed at a subsequent meeting. This confirmatory meeting, it is proposed, shall be tho bank’s half-year general meeting, to be held in December next. Your proxies are invited for use at both the meetings, and wo shall be pleased to receive them in due course. Tho amendments are very necessary, and we shall be glad when they have been effected. SAMOA. “ Of German territory occupied by Great Britain since the outbreak of the war, New Zealand is most interested in Samoa, owing to its proximity to the dominion and the fact that it was the first 'captured—and that, too, by a Now Zealand Expeditionary Force. German currency in Samoa has been lately superseded by British, and a branch of this bank has been established at Apia, the principal town of German Samoa. The future of Samoa will not bo determined until the close of the war. Meantime the country is being held by New Zealand, on account of the Imperial authorities, and is under military control. WAR AND FINANCE. “It is impossible for me to avoid reference to the great conflict that is now convulsing the world. Tho war, in which practically all tho Great Powers are engaged, has had, and must continue to have, a very disturbing influence on finance, trade, and commerce. Great and profound economic changes have occurred, and no one can as yet faintly estimate the far-reach-ing effects of the titanic struggle. “ The measures adopted by tho British Government to meet the financial difficulties precipitated by the war were outlined briefly in my last address. They have proved on the whole effective, and have gone far to assist in maintaining the pre-eminence of London as 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 opening of tho London Stock Exchange, which took place on January 4, was attended by the imposition of very stringent conditions, designed to prevent the Stock Exchange being utilised as a channel for realisation of enemy securities.

“ Recognising the important part which finance must play in the war, tho British Government has determined to conserve British financial resources to the utmost extent possible, in order that supplies for war purposes may be available as and when required. With that end in view, it has practically taken control of all new capital issues in Great Britain by providing that no issue shall be made that has not been previously approved of by tho British Treasury. The principle upon which the Treasury will discriminate upon any proposals made to it will be whether or not tho contemplated issue can bo shown to be < advisable in the national interest.’ This regulation, it will be at once seen, closes tho London money market to all issues of capital on account of undertakings unconnected with the British Empire, and to those oven within the British Empire that are not in close association with Imperial interests. Tho result is that tho vast stream of cred’t constantly flowing to London from Britain’s world-wide investments is accumulated there as in a financial reservoir, the outlet of which is controlled by. tho British Government. In this way supplies of that essential sinew of Avar —money—are assured, not only for the British Empire itself, but also for her Allies.

“ The facility with which all needs have so far been fully met, at rates fluctuating—as far as the British Government is concerned—from a little over 3 per cent, to a little under A per cent, is at once a testimony to the effectiveness of the measures adopted, and to the continued strength and soundness of British credit in these creditshaking times. I do not wishto be understood as minimising the serious financial and economic bearing of the position in which the world has been placed by the war. One cannot but regard with serious misgivings, the diversions of such immense volumes of capital from remunerative enterprise to the business of destruction, which leaves only devastation and no tangible asset in its wake. “The mind is fairly staggered when _ it thinks of the economic problems with which the civilised world will bo faced when this —the greatest of all wars —has been brought to a termination. The figures that

will be represented by the actual war expenditure, by the loss of income resulting from the paralysation of industry, and by the enormous value of property absolutely destroyed, are at present quite unthinkable; and when we add to them that greater, because irreparable, loss, not measured in money but in human lives, we turn from tho contemplation of it all with a distracted brain and a sickening heart. For ua, tho only consolation lies in tho fact that tho conflict has been forced upon us; that we are fighting the fight of liberty and justice, and that with the victory which we confidently anticipate will be ours, may come an assurance of an enduring peace which, in the years yet to bo, will perhaps compensate in some measure for the losses and distresses of the present. “ As to the ultimate issue of the conflict, I do not think there can be any room for doubt, if tho British nation can bo brought to realise that the greatest in its history has arrived. At the opening of the war every Britisher faced tho position with a confidence, born of past experience, in tho conviction that tho nation would rise as one man to meet the emergency. I am, however, bound to confess to a feeling of the keenest disappointment and to some apprehension when I read of the recrudescence of labour troubles in Great Britain at such a critical juncture, and of the consequent threatened deficiency in the supplies of those munitions of war which are absolutely indispensable, if our brave soldiers at the front are to fight their battles successfully. I can conceive of no more despicable conduct than that which would leave our armies and navies deficient in the supplies of the fighting material necessary for their own defence, and for tho successful prosecution of the war. I hope that there will be no further display of such un-British conduct, but if there should be, I trust that tho most stringent measures will be adopted to compel labour to give the full, generous, and loyal service which the nation demands, and undoubtedly merits, in the present time of stress. In this connection, it is interesting to note the appointment of the Right Hon. David Lloyd George as Minister for Munitions of War, a portfolio of the British Cabinet which has been created for the express purpose of dealing with the difficulties to which I have alluded. ... “ The unceasing vigilance of the British navy —the effectiveness of whose watch and ward is a matter of pride and satisfaction to the whole British Empire—has afforded protection to tho British mercantile marine; and although some losses have, of course, occurred, the total is insignificant when compared with the aggregate sailings. Up to the present the Kaipara and the Tokomaru are the only New Zealand ships that have been sunk by the enemy. The debt we owe to the sailors of the British, Australian, and Japanese navies can never be re “ a Th e British Government, feeling the importance of confidence as an essential to the maintenance of trade, announced, in the early days of the war, the establishment of a Government insurance bureau through which cover for war risk could be obtained, charging for this national scrvice the lowest possible rates with departmental solvency. This facility has been of tho greatest assistance to shippers to and from all parts of the British Empire. It has enabled them to obtain full cover for all their shipments at reasonable rates. It is questionable ■whether, without it, underwriters would have been able to meet the demands upon them. In any case, the rates for war risk would probably have been almost prohibitive. Tho bank s services have been at the disposal of its shipping customers, and the aggregate of war risk coyer effected in London through tho banks agency has reached a largo total. “The measures which it was found necessary to adopt in this dominion, viz: The notes legal tender proclamation. The prohibition of gold export, and the Mortgages Extension Act. are still in operation, and likely to be continued until the close of the war at any ia “Tho last-named Act has, unfortunately, proved somewhat unsatisfactory* Designed primarily for the protection of_ mortgagors against possibly unjust and arbitrary action by mortgagees, it has no doubt been of much service in preventing hardship to mortgagors, whose liabilities were maturing and who were unable to make provision for them. It has enabled them to carry on their mortgages at the rate of interest provided in the mortgage deed, and has in tnat way, no doubt assisted to keep down the value of money for mortgage purposes, which runs to-day at from 5£ to 6 per cent per annum. But the Act has been taken advantage of by a number of mortgagors, who, being in the enjoyment of a low rate of interest, have, whilst possessing the means to discharge their liabilities, claimed the protection of the Act and utilised their available funds in lending on mortgage themselves, at higher rates of interest. This is, of course, a perversion of the benefits conferred by the Act, and it is understood that, in tho coming parliamentary session, the matter will receive attention at tho hands of tho Government. “We are not at all sure that the mortgagors in such cases are not overreaching themselves, or that those "who are bona fide claiming the protection of tho Act arc wise in doing so. There is no reason to anticipate that a substantial drop in money values will take place after the conclusion of the war. Not a few in a position to judge take tho view that there will then be still further appreciation, and my own opinion is that those who are ro-arranging their mortgage liabilities, as they mature, on the best terms possible, are acting with a measure of prescience which future events will fully justify. , “ The prevailing conditions in tho groat monetary centres of the "world are 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 tho 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 tho fact that enterprise is stagnant, and that trade generally is running in much restricted channels. When th<f future is more assured, tho supplies of floating capital will probably be quickly absorbed, and money may become scarce. “After tho war is over, if the conditions of tho international settlement are such as hold out prospects of a lasting peace, and of cessation of competition in armaments, there may be after a few years a permanent drop in money values, tut I do not think that point will be reached for some time. These are, however, merely my personal views and I wish it to be understood that I lay no claim to prophetic attributes.

“ In these Islands our position is a highly favoured one. Tho horrors of this war the most distressing of all wars—are known to us practically only through the newspapers. But for the fact that some of the best of our manhood has gone forth to do battle for tho Empire, and that the list of our dead and wounded is a long one, wo . should bo almost unaffected by the momentous struggle that is in progress on tho other side of the world. Indeed, it may be truly said that we are actually benefiting by tho tragic events that are being enacted, inasmuch as tho war demands have sent up the prices of our staple products to a level never before touched in recent years. “In this connection, it is interesting to note the values which have ,rulcd_ in the London market for some of our principal products this season, as compared with the previous ▼ear. Take, for instance, wool, meat, butter, and cheese: —

and the market for all dairy produce lias einco improved. “Linked with the patriotic enthusiasm of the dominion, those circumstances, which have placed our people in a position to be 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 be done, but we aro persuaded the New Zealand people wdll be true to their call and do their duty. “As far as wo are concerned as a board, wo consider that, under normal conditions, we are justified in regarding ourselves as your almoners only to a small extent; but, existing circumstances being so exceptional, wo 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 exchansre, which service has been equivalent to a further large donation, as exchange on Jhondon has commanded a very high premium for many months, and still stands at « high level. ' This further donation, thus

indirectly made, is equivalent to upwards of £IBOO. When wo add to this the halfpay which we are allowing to all our officers on active service with the forces, ane which at present amounts to some £7BO per annum, it will bo soon that we arc making a large contribution for war and relief purposes. W e have no doubt, however, that, m the circumstances, our action will receive your hearty endorsement. LOCAL BODIES’ LOANS.

“With the closing of the London moucj market, that fertile channel of supply of oui local financial requirements has become absolutely sealed. Wo have consequently no loan dotations to chronicle on this occasion. For the information of those local bodies who may have schemes of expenditure in prospect, I may say that, apart from the uncertainty of the war’s duration, it is, in my opinion, exceedingly unlikely that the. London money market, even after the termination of hostilities, will become favourable for tho issue of< loans for some time. The demand for capital to make good the destruction that has been wrought by the war will be enormous, and tho sources of supply will, to some extent, have run dry. *lt is therefore only reasonable to assume that it may bo some years before the financial equilibrium is restored and normal conditions again prevail. In any case, when considering the question of loan flotations, borrowers will no doubt have to readjust their ideas as to rates, for, when London loans again become possible, there is bound to be a great rush for applications, and this, naturally, will result in lenders demanding higher rates than those which in recent years they have been ready to accept. INDUSTRIAL DISPUTES AND CONCILIATION.* “ Following the outbreak of war, tho Acts relating to the Arbitration Court and Conciliation Board were, by mutual consent, suspended so far as the hearing of new disputes was concerned; but at a special sitting of the Arbitration Court, held in May last, the president decided, after hearing lengthy evidence given by representatives of employers and employees, that tho conditions of trade in this dominion were sufficiently good to warrant the resumption by the court of its functions.; Accordingly, tho courts are now again being used for the settlement of differences between capital and labour. TRADE, INDUSTRY, AND INTERNAL FINANCE. “Tho 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 31. 1914, wo find tho following differences in tho aggregate averages of all the banks: — Deposits. Interest bearing —increase £316,029 Non-interest bearing—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 the position of the public with the banks £2.797,356 “The Post Office Savings Bank figures show a similar large accretion of funds. The excesses of deposits over withdrawals, for the

half-year ending March 31 last, reached the large total of £1,188,071. “ These improvement have been contributed to largely by (1) the increased 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 last—the latest date to which complete returns are' available—the figures are: Exports (excluding specie) ...£26,253,900 Imports (excluding specie) ... 21,144,200 Surplus exports £5,109,700 “ The surplus for the previous year ended December 31, 1913, was £1,156,731. “ The increase in the exports is due in a largo 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 the difficulty of shipping owing to congestion at the London docks. “The export figures for the quarter ended March 31 aro 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 the quarter ended March 31, 1914, showing that there has been a substantial falling off in importations. This is, of course, all in the direction -of widening the margin between imports and exports, thus increasing the credit balance on the dominion’s trade as a whole, and, consequently, the funds available here. “A statistical comparison of the trade of Nerv Zealand with previous years would be apt to be misleading, because of the groat disturbance caused by the war. The difficulty of importing goods and the advances in prices on the one side, and the high prices for exports on the other - side, make an examination of the position almost impossible, for wo 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 case 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 the fact that the increases in deposits arc principally in the non-interest-bearing claiss—i.e., tho current accounts. “This is not an encouraging feature, because it indicates, to some extent, commercial and industrial inactivity. Building, except in tho way of Government undertakings, is largely at a standstill; and investors are disinclined to enter into commitments. Buol-

ness on the stock exchanges of the dominion is also very 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 held, there being few sellers. At the commenocmnt of the war a sharp decline in market values occurred, but as confidence returned recovery became rapid, and to-day there are few stocks in favourite companies which can be purchased to yield more than 5 to 6 per cent.' “The export of meat from the dominion, otherwise than for the British Government, is now prohibited. Early in the year the New Zealand Government, acting on behalf of the Imperial authorities, commandeered the whole of the meat in store and all future surplus for export. The 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 the British consumers by speculative buyers. “It: seems to me that a similar scheme, controlled by the New Zealand Government, and worked probably in co-operation with the British Gpvornment, would bo 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 the wheat supply of the dominion, importations of wheat and flour have been made from America and Australia, a large part representing purchases made by the Government in the public interest. The Government’s judicious action in this respect undoubtedly has had the effect of steadying the market, and preventing an advance in the price of “the staff of life” to a figure which would almost certainly have necessitated reduced coneumption. The pressure upon steamer freight space from Now York and San Francisco, owing to this and other ■ causes, has been so great that quite a number ot sailing vosesls have been recently chartered for the trade.

“The condition? of the domin:on’s staple industries leave little room for’ complaint It. is time that in some parts serious droughts have prevailed, and that, owing to the commandeering of ships for the transport of troops, there is temporarily a serious shortage in freight facilities, with some possible loss to farmers, who, having brought their stock into condition for killing, have found themselves unable to sell to the freezer?, or get their stock killed and frozen on their own account. On the other hand, phenomenally good prices,' as I have already shown, have been ruling for wool, frozen meat, and dairy produce; and the better prices have, in most cases, more than compensated for the reduced yields. “As a consequence of the deficiency of freezing and storage facilities, movements have been 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 be overlooked that the 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 the country are. probably, in most oases quite adequate. It will therefore be politic that the promoters of such schemes 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 say, dictate she abandonment of the proposed venture. THE OUTLOOK. “ I think we may look for a continuance of good trade. The end of the war may bo followed by heavy taxation and unemployment in those countries now engaged in hostilities, but New Zealand is still bound to find an outlet at remunerative prices in Great Britain, the Continent of Europe, and the United States of America for her wool, frozen meat, dairy produce, etc. It would, of course, be unreasonable to expect the abnormal rates at present ruling _ for the articles enumerated, but there is little doubt that the demand which will then exist for our primary products will enable us to face the futuremvith equanimity and assist us in discharging the heavy liabilities wo have directly undertaken in connection with the war. “ The war is costing the Government a substantial sum, and I am convinced that prudence and reasonable economy are being exercised in the expenditure. The cost of the war must be met by increased taxation, and no doubt we may expect to have proposals submitted under this head in the course of a few days. The country is well able to face this increased taxation; indeed, looking at all the circumstances, it was never bettor fitted to stand such a pressure. “As I have already mentioned, the commandeering of so many of our insulated steamers for troopships has hampered exporters considerably, and has caused some inconvenience; but the Government is making every effort to provide a sufficiency of insulated ships, and it is anticipated that the difficulty will be overcome by the end of July. ‘"Some change in the incidence of trade is certain to follow the rupture of the old commercial relations occasioned by the war, and new trade routes are already being pricked out on the 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 7 outside markets will therefore have to be exploited, and fresh industries within the Empire itself established and developed. “Japan is already in the field, and quite recently a distinguished deputation visited the dominion with a view to opening up fuller trade relations between the two countries. There is a possibility of an _early_ inauguration of a direct steamer service with Japan.

Already the trade of Australia and Nov/ Zealand with th© United States of America and Canada has taken a forward bound, largely encouraged by the opening up of the Panama Canal. Largo shipments of wool and concentrates have been made from New Zealand and Australia to Boston and other American ports. Wellington will he a frequent port of call—for coaling and other purposes—on this new trade route. The trade with tho United States is bound to develop, and It is the duty of our merchants to help in tho development, at the same time takingcare that the pernicious American system of combines and monopolies is not allowed to obtain a footing. Trade with Canada, too. is destined to grown and it ie not unlikelv that closer political relations will be established with tho sister dominion after the close of the war. “China and Russia arc, commercially speaking, lands almost unknown to these islands, but it is fairly certain that they well not long remain so ; and when wc como to reflect

upon their immense populations and their boundless resources, the trade possibilities opened up appear to bo illimitable. “It is noteworthy that the wars of the early part of the nineteenth century laid the founddations of the peace upon which the phenomenal social and industrial developments of tho later part of that century were based, and now, in this twentieth century', history may repeat itself; and when the knell of militarism has been sounded, and the nations have turned their energies again to the arts of peace, developments as- yet undreamt of may take place. The next hundred years may witness tho attainment of stages of further progress in arts, sciences, industries, social conditions, and international relationships which shall outstrip even the nineteenth century record, and present contrasts with existing conditions more remarkable and important than those of any of the centuries of tho past.” In seconding the motion Mr Martin Kennedy congratulated the chairman upon his most interesting and informative address. Tho chairman having eo £ully reviewed the conditions, there was little for him to add beyond a word of congratulation on the position of' tho bank. No doubt it was a matter of groat satisfaction to them all that, 1 notwithstanding tho 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 f Tact that tho reserve fund had now_ reached tho £2,000.000 mark. At one time, 'ho mentioned, lie' was strongly opposed to the Government being permitted to take up any shares in tho bank. Circumstances had, however, led to a radical change in his views in this respect, and ho was now prepared to admit that the combination with the Government was a happy one, and calculated to achieve the very best results, both for the bank and the country.

Mr S. Kirkoaldie regretted that he could not join in the congratulation as to the position of the bank. lie proceeded to refer to special items of the balance sheet. It was a surprise to most shareholders to learn that the item of guaranteed stock had been reduced. lie criticised the action of the directors in failing to renew the full amount of this guaranteed ’stock, authorised by the Legislature to the extent of £1,000,000, and bearing interest at 4 per cent, per annum. Ho referred, further, to the reduction in tho profits disclosed by the fact that a smaller sum was transferred to reserve, and to the decrease in tho item under tho heading “bills discounted.” He suggested, that the amount to be expanded, in the proposed building scheme might be saved for the time being. Dr Prendorgast Knight said that, if thebank had accepted the offer made to it, it could have obtained the whole amount of tho guaranteed stock; but that offer had been declined, and half a million had been subscribed at no cost to tho bank. This was an expression of confidence in the bank. With regard to building, it was plain to them all that tho bank must extend its premises. Tho amount of the original guarantee —£2,000,C00-had now been reached in the reserve fund. Mr T. S. Weston also disagreed with Mr Kirkcaldie’s criticism. Pie said it would have been unwise for the bank to pay 4 per cent, for guaranteed stock until the money could bo used to good purpose. With regard to the profits, it must be recognised that they had written down gilt-edged securities by a large amount. When these securities recovered, as they would after the war, the bank would be able to show a good result. The Chairman, in replying to Mr Kirkcaldie’s statements, said it would have been exceedingly bad business, to pay 4 per cent, per annum when the ruling rate for money in London on short call amounted occasionally to only 1 per cent, per annum. He also explained that, prior to tho maturing of tho old debentures,- an offer to underwrite the whole of the new issue for 1 per cent, was made to the bank. This would have amounted to £IO,OOO. The bank, however, decided not to accept this offer, but proceeded to renew by _ direct negotiation, and succeeded in placing in this way £528,988 at no cost whatever to the bank. This was an achievement of which the board was proud. As to diminished profits this was most easily explainable by the larere amount that was required for depreciation in gilt-edged securities. Had they been passing through normal times the profits of last year would have enabled them to nlace to reserve a larger sum than was carried to reserve for the previous year. That would give some indication of the amount required for writing down all the gilt-edged securities"to the rates ruling on the Stock Exchange on March 31 last. As to the reduction under tho heading “ bills discounted,” this was explained by the financial case now obtaining in the dominion. It was emphasised by the increased indebtedness of the banks to the public to the amount of £2J97,356.’ This was tho natural corollary to a reduction in the item of “ bills discounted.” With regard to the bank’s building assets the following figures were sufficient answer:—Book value, £420.208; manager’s valuation. £781.708; balance sheet "value at _ March 31. £451,867; land tax valuation, £777,305. Tho motion for the adoption of tho balance sheet was carried without further discussion.

In moving a very hearty vote of thanks to the board of directors and staff, Mr John Mill said ho was sure that there was not one shareholder but would agree that the board and staff deserved great rredit for the way in which they had handled the business of the bank during the last few years. He hoped and trusted that the day was not far distant when the chairman of the institution would receive the reward that was due to him for the services he had personally rendered to the bank.

Dr Knight seconded the motion, which was carried unanimously. The Chairman thanked the meeting for the expression of confidence. He said the directors were all working well together with a desire to do what was best for the bank.

Mr W. Callender thanked the meeting on behalf of the staff, and also expressed thanks for the liberality with which the directors had treated the men volunteering for the front.

A suggestion was made by Mr Weston, and heartily approved, that at the end of the war the names of the bank servants who had fallen bo engraved on a roll of honour and placed in the board room.

Authorised. 4 nor cent, guarantee £1,000,000 stock “ A ” preference £ 500,000 shares B ” preference 1,000,000 shares £1.500,000 Ordinary shares 3,000,000 £5,500,000 Issued and Paid-up. Issued. Paid up. 4 per cent.. guaranteed £ 528,983 £528,988 stock “ A ” preference shares ...■ ... 500,000 500,000 “ B ” preference 250,000 shares 250,000 Ordinary shares (old 500,000 issue) 1,000,000 Ordinarv shares (now 475,710 issue) 500,000 £2,778,988 £2,254,698

. Wool. March, 1914. March, 1915. d. d. d. d. Sliped Wellington wools 13 to 15 21 to 24 Greasy Merinos 60’s 12£ to 13£ 11 to 12 Greasy crossbreds fine 5Ts ... .'. 12g to 13g 17 to 17g Greasy crossbreds medium 44/45’s 12 to 12g 1?2 to 13 Greasy crossbreds coarse 36/40’s ... 11 to llg 17 to 17 Jr These prices are for “average ” quality. per lb. “It will be seen, therefore, that the present condition of the market is brought about by the strong- demand for ' wools suitable for khaki and blanket purposes. Frozen Meat. March, March, 1914. 1915. d. d. d. • d. Canterbury Iamb, per lb 62 to 6| 7| to 8 North Island mutton. per lb 4 to 4^ 5| to 6^' N-Z. beef, fores, per lb 3| to 4 5| to 6| N.Z. beef, hinds, per lb 4i to 4g 65 to 62 liUTTEK AXD CHEESE. March, 1914. March, 1915. Per. cwt. Per cwt. s. d. e. d. S. 6. Butter ... 118 0 to 120 0 136 to 142 Cheese ... 65 0 to 66 6 91 to 93