BANK OF NEW ZEALAND

Otago Witness, Issue 3274, 13 December 1916, Page 5

BANK OF NEW ZEALAND

HALF YEARLY MEETIXG. WELLINGTON, December 8. The half-yearly meeting of the Bank of New Zealand wa.s held to-day, Mr Harold Beauchamp (chairman of directors) presiding.

J.he Chairman, after a feeling reference to the death ol Mr Martin Kennedy, • ;o had been closely identified with the L....;k for the past 22 years, and the appointment of Mr K. W. Kano as shareholders' representative on the board in place of Mr Kennedy, proceeded to take a cursory review of the leading features of the present financial and industrial position. in the course of his address he said:

| I may remark that in this dominion pro- • ducers continue to experience a period of phenomenal prosperity, and our - staple products are realising prices which, it may be 1 said, have never before been obtained in j the history of the country. Since early lin 1915, the dominion's meat output has i been purchased in the interests of the Imperial Government on a fixed and renmnera- | tive basis as to prices, and tho arrangement has recently been renewed till the end of the war on somewhat more favourable terms to the producer. A portion of tho cheese output lor last season was . also purchased on behalf of the Home authorities, and arrangements have recently been made to similarly take over the dominion's wool clip for the coming season. Throughout the whole country an exceptionally favourable season has been experienced, and the yield of every description of produce promises to be bountiful. The area of and under crop is somewhat restricted this year owing, to some extent, to the difficulty that is being experienced in obtaining the ncccscary labour to cultivate the land and harvest the crops, and also, in a measure, to the relatively higher prices ranging for meat and wool. It is to be feared that tho high yield for meat is inducing prodigality in the slaughter of stock, and there is reason to apprehend that our flocks and herds are being reduced in numbers to such an extent that the adequate stocking of our pasture lands will, in the near future, become a very difficult problem for our farmers. More especially is this remark true in the case of cattle, of which class of stock a more than ordinary number of young beasts are finding their way to the slaughter-house. Lambing has generally been good for the whole country, and this, in some measure, will compensate for the excessive drain that has been taking place upon our sheep stock.

The state of trade and business throughout the country is, on the whole, good. Tho excellent prices which have been realised for tho past two years for our stapl© products and tho large expenditure of borrowed money that is in progress m connection with the training and equipment of our troops for oversea service, has placed tho people generally in an easy position in regard to resources, and they arc displaying the usual liberality, if not prodigality, in the expenditure of the abundant funds that they have available. Traders in luxuries, such as jewellery, soft goods, etc., have been doing exceptionally well. Land and agency business is fairly quiet. The building trade is severely handicapped by tho shortage of skilled labour and tho high prices of materials; and operations in this industry are confined mainly to necessary works.

There is little change to chronicle in tho state of tho money market. Mortgages still contimie to bo raised and renewed at rates averaging as a rule 5g per cent, to 6 per cent., and the effect of the £8,000,000 local war loan, which the Government placed on the market in August last, and which was over-subscribed, has not apparently been to harden tho market to any appreciable extent, at any rate in the meantime. The cost of living is steadily increasing, and the high prices to which the necessaries of life have advanced aro imposing a heavy burden on the wage-earning and small salaried classes. Tho Government, with a view of placing a check on the upward tendency of tho price of butter sold for local consumption, fixed, by Order-in-Council, tiio maximum wholesale price at which butter destined to be retailed in tho dominion should be, sold; and in order to compensate manufacturers for any losses they may sustain through soiling for the local market instead of exporting, a levy at the rate (at present) of thrco farthings per pound of butter-fat used, was made on all butter and checso factories, and tho issue of a license to export was made dependent on tho payment of tho levy. The principle underlying tho Government's action is a very important ono both to producers and consumers, and its operation as regards butter will bo watched with interest.

In sympathy with the increased difficulty of living docentby and respectably at tho present time on small salaries, tho board recently decided to grant to tho bank's officers a war bonus of 10 per cent, on all salaries, not exceeding £SOO per annum,

drawn by married men and by single men who arc burdened with the support of dependents. As this bonus has been backdated to Ist April last, and is to continue at any rate till 31st March next, it will, wo hope, effect a considerable relief to the lower salaried officers of our staff in the matter of ways and means of livelihood. I have no doubt that the board's action will have your cordial endorsement.

Tho trade returns of the dominion exhibit a very satisfactory position. In each of the two complete produce years that have passed since tho outbreak of the war there has been a very substantial increase in the values of the dominion’s exports, as compared with the previous year. To show to what extent the dominion has benefited by the very strong demand for its staple products, I append a table of the exports and imports (excluding specie) for tho two years from October 1, 1914, to September 30, *1916, and also for tho two years immediately preceding the war, namely—from October 1, 1912, to September 30, 1914:

Those figures show that the excess of exports over imports for the two pre-war years was £3,517,025, and the excess for the later period, £21,059,599. Turning to the figures for the year ended September 30 last, namely—exports £34,926,541, imports £23,791,152 —an analysis of the export figures shows that the increase of £5,215,107, as compared with the preceding year, is duo mainly to higher values, and not to increased quantities. The fluctuations in our main products aro shown in the following table

It will bo scon that all the principal products exported in 1915-16 exhibit an increase in value, though both wool and butter show a shrinkage in quantity. Imports show an increase in value for the year of £4,004,928. This is a large increase, which in normal times would call for more' than passing comment, but under present conditions it is obvious that a considerable portion of the increase is dne to higher values of the goods imported i nd the execution of belated orders. The prosperity of the country tends to encourage extravagance in expenditure and in methods of living, which in ordinary course results in increased imports; and from that point of view it is perhaps not a bad thing for the country that inward shipping facilities are in some measure restricted. The banking returns show an eminently satisfactory position. The combined deposits of the banks received from the public at September 30 last, compared with those of Sleptembcr 30, 1915, were as follows:

Government deposits show largo increases, the consequence of the incoming of the local loan moneys and the large revenues resulting from the taxation imposed under iho Finance Act, 1015. Note circulation shows an expansion of £1,507,146. This is not the result of any increased activity in the trade of the dominion, but is occasioned by the complete suspension of gold settlements between the banks; settlements of exchanges being now made in the legal tender notes of the settling banks. Advances also- show expansion to the extent of £1,329,059, the figures being as follows ;

Sept. 30, Srpt. 30, 1915. 191 G. Increase. Discounts £ 1,357,683 £1,428,828 £ 71,115 Advances ... 21,991,222 23,219,136 1,257,911 £23,318,903 £21,677,961 £1,329,059

Since the outbreak or war no fewer than 569 of the bank’s officers —more than a third of the total staff —have joined the military forces. The hank granted leave of absence to 329 of these, with half-pay in tho case of members of tho colonial staff and full pay for members of tho London staff, tho military pay of tho latter being on a lower scalo than that of tho colonials. The remaining 40 resigned their appointments in or lex to join the army, preferring that course rather than fo .wait their turn to bo relieved. Of tho officers on leave T regret to say that 20 have lost their lives, one is missing and believed to bo wounded, and 51 others havo been wounded in action. As probably less than 200 of our officers havo been in tho firing line, the balance being

j still in camp or in rrarsit, this is a heavy { and it can be judged, that, as a j soldier, the bank clerk keeps well to the ■ foro and takes his full share of the fighti ing.

You will, I am sure, join with me in extending heartfelt sympathy to tho relatives of our gallant officers who have willingly given thei." lives in the service of King and Country. "i Tho difficulty of carrying on our largo business with a steadily weakening staff is one which is shared by practically every employer in the country, but the magnitude of our business makes our task proportionately heavier. We have now 200 women clerks at work, and are taking on others. An efficient bank officer, however, is tho product of years of experience, and ho cannot bo satisfactorily replaced by inexperienced clerics. The results of the bank's work during the half year ended September 30 last have been found to be satisfactory. The profits earned justify the usual distribution. An interim dividend of 6 per cent, is accordingly now declared in respect of both preference and ordinary shares. Tho dividend will be payable at Wellington to-mor-row, 9th instant, and at branches on receipt of advico.

Mr Watson returned thanks for bis reejection to the board, and Mr Kane expressed his sense of appreciation of the action of the board in appointing him to the vacancy created by the death of "Mr Martin Kennedy.

The Chairman welcomed Sir James Mills, a member of the London board of directors, and expressed appreciation of his services to the board at a time of crisis. Sir James Mills thanked the chairman for the welcome, and expressed _ appreciation of the compliment paid to him by the New Zealand Board in asking him to accept a seat on the London Board. It had not been an uncommon thing for a member of the New Zealand Beard to attend a London meeting, but this was probably the first occasion on which a member of the London Board had attended a general meeting in New Zealand. Referring to the work of the London Board in the war period, Sir James stated that tho position was a very anxious one for some days before the declaration of war and for a short while afterwards, until tho Imperial Government was able to formulate a schemo for the relief of tho money market. It was, however, no secret that this bank was in a very .satisfactory position at the time, and, if mattors had turned out worse, it would have been as well able as the older banks to meet the difficulties. Ho complimented tho chairman on his address dealing with the position of the bank, and giving so much valuable information as to the trade of the dominion. This would_ be very reassuring, especially the figures given of the excess of exports over imports. This was of interest to the London Board, as there a tendency for accumulated funds to iind their way there. It was the duty of the London Board to find safe investments, so that the money would not be tied up, but would be available for use by the bank if required. Ho quite endorsed the chairman's opinion that, notwithstanding the clouds hanging over them as regards the state of war and the political position at Homo, they could look forward with confidence to their staying power bringing them that victorious position which all counted upon. It was difficult to forecast the position after the war. It would depend to an extent upon the character of tho peace made, but there would be difficulties before commercial men and the banks. It would be no easy task for Great Britain to recover the trade which had been lost or scattered through her attention being occupied with the war and which had fallen into the hands of neutrals, who profited by the great war expenditure on all sides, and who accumulated large reserves. These they would use in competition with _ us, and they would spare no pains to retain and increase the advantage they had gained. We could also look forward to our present enemies making a great bid to recover their trade ss soon as the seas were open to them a'ra'ii It seemed clear that, notwithstand'.m her difficulties, Germany bad been ablo to keep sorno of her industries going", and had accumulated goods and reserves of raw materials, which would be used to flood the markets when peace came. To meet this situation better organisation and "co-opera-tion between the banks and commercial men would bo necessary, somewhat on the lines which hod obtained with tho German < banks in the long years of space. They must prepare not for to-morrow, but f«v future generations, by tho better edu:.iti n of young men in banking and commercial pursuits. They could do this in the secondary schools in Great Britain a:id here, pro- j viding that Latin and Greek should take a second place in their system of education.

Mr S. Weston proposed that the shareholders express their deep appreciation of the services of the late Mr Martin Kennedy, their regret at his death and their respectful sympathy with his relative*. Mr [ Weston said ho did not think there was anybody to whom the shareholders were more indebted than to Mr Kennedy. From the very first he expressed confidence in the ! future of the bank, and ans shareholder

coming to him for advice was always encouraged to hold on. One knew that !& giving that advice Mr Kennedy was not merely making a statement, but that htt was telling others to do what ho himself consistently did. The motion was seconded by Mr J. B. Harcourfc, and was carried in silence. On the motion of Mr A. M'lntosh, seconded by Mr F. Dyer, the meeting unanimously expressed its entiro approYai of the action of the board in appointing Mr Kane to the vacancy caused by the death of Mr Kennedy. A vote of thanks to the directors and staff was carried on the motion of Mr R. B. Jackson, seconded by Mr J. H. Owen.

1512-13 1913-14 Exports. ... £23,682,416 23,759,347 Imports. £22,868,354 21,056,384 Excess exports. Totals .. . £47,441,763 £43,924,738 £3,517,025 191529,710,434 34,926,541 19,786,224 23,791,152 Totals .. £64,636,975 £43,577,376 £21,059,599

OuanHhv Vnlnr* 1014-15. i915-lG. 1914-15. 1015-10. Lbs. Lbs. £ £ Wool Frozen 208,908,118 Cwt. 200,130,178 Cwt. 10,425,172 13,173,908 meat 3,368,104 3,453,340 7,238,500 7,589,795 Butteor 413,987 395,400 2,385,308 2,749,939 Cheese 793,075 970,848 2,523,165 3,440,142

Sept. 30, Sipt. 30, 1015. 1910. Increase. Interest bearing deposits ... £11,609,000 £12,978,029 £1,309,563 lion-interest bearing deposits 17,515,803 19,020,071 2,071,808 £29,151,923 £32,503,300 £3,141,371