Bank of New Zealand.

Stratford Evening Post, Volume XXXIX, Issue 43, 12 June 1914, Page 5

Bank of New Zealand.

ANNUAL MEETING OF PROPRIETORS. MR BEAUCHAMP'S SPEECH. (Special to "'Stratford Post.") Wellington, June 12. The ordinary annual general meeting of the proprietors of the Bank of NewZealand was held in the Head Office, Wellington, to-da.v, Mr H. Beauchamp, Chairman of Directors, presiding. The report of the Directors and the Bal-ance-sheet (published on page 4 of this issue) were taken as read. . The Chairman in moving their adoption said :—The Report and Balance Sheet having been distributed some days ago, the result of the year's working is known to you. I think you will agree with me that the position they disclose must be regarded as very satisfactory. You will observe that the sum available for distribution is £291,608, and that the Directors propose to pay the usual dividend, and to transfer £175,000 to the Reserve Fund, leaving a, balance of £51,608 to be carried forward to next year. Following our usual practice, I will review briefly the principal items in the Balance Sheet. Capital.— The Capital of the Bank, as at 31st March last., was as under:—

AUTHORISED. £. 4 per cent. Guar. Stock ... / 1,000,000 "A" Pref. Shares 500,000 "B" Pref. Shares 1,000,000 Ordinary Shares 3,000,000 £5,500,000 SUBSCRIBED. 4 per cent. Guar. Stock ... • 1,000,000 "A" Pref. Shares 500,000 Ordinary Shares 1,000,000 Paid up to £3 6s 8d per share 500,000 £2,000,000 The issue of new capital (viz.: 37,500 "B" Preference Shares at £6 13s 4d each, and 75,000 Ordinary Shares at £6 13s 4d each), which was in contemplation when we last met you, has since been successfully carried through. The amount, £269*690, appearing under the head of "NewShare Account," represents the payments received up to 31st March in respect of instalments on applications lodged up to that date. , The application list did not, as you are aware, close until Ist April, and as allotment could not be made until some time subsequent to that; date, the amount does not appear in the balance-sheet as passed to the credit of capital account. You will be interested to learn, however, that nearly every shareholder has applied for the quota to which he was entitled, and 'that, in the great majority of cases, the whole of the instalments have been paid up in full. The position, as indicated by latest advice s, is as follows: To To Capital. Reserve £. £

37,500 "B" Preference Shares issued to the Crown, fully paid up 250,000 125,000 58.659 Ordinary Shares, fully paid iip 391,060 195,530 14,820. Ordinary Shares partly paid up 19,532 9,766 Total received 660,592 330,296 The Board will shortly consider what will be the most satisfactory method of dealing with the comparatively small number of shares for which application has not been made, and due notification of its intention will be given. The Reserve Fund —This Fund, by the addition of have' stated the Board proposes to transfer from profits, will then stand at £1,550,000. With the sum proposed to be carried forward, namely, £51,608, the Teserve fund and undivided profits will amount to £1,601,608. As you are aware, the premium of 50 per cent, on the issue of capital recently made has to be credited to the reserve fund, and from this source the fund will, after adjustment, benefit to the extent of £375,000. Notes in Circulation stand at £989,882 as compared with £994,650 a year ago.

Deposits (£18,070,613) show the substantial increase of £1,655,974 as compared with the figures of 1913, this movement being due principally to larger Government balances. Ordinary deposits, however, also show an increase. Bills Payable and Other Liabilities, exhibit an increase of £36,375 on the figures as at 31st March, 1913, and now stand at £1,403,456. Coin, Bullion, Money at Short Call, Etc. —Coin and cash balances (£3,261,510), and bullion (£115,674), together show an increase of £228,255 as compared with the figures of the previous year, while the item money at call and short notice, Government securities and other securities in London, also exhibits a substantial increase (£995,710), and now stands at £5,076,748. The larger Government balances, already referred to, account for the greater part of this increase. I may mention that the totals under this heading.together with the amount of bills receivable and investments in the Colonies, are equal to 61.52 per cent (or 12s 3d in the £ of the total' liabilities of the Hank to the public, j Bills Receivable, in London and in j transit, are more by £316,955 than i at the corresponding date last year, ! and now stand at' £3,164,031. The j increase is due mainly to an expansion in the volume of the Dominion's j exports. Investment!; in the Colonies (£972,-1 170), exhibit an increase of £14.902 ; as compared with the figures at 31st March, 1913. Advances.— As the result of the' legislation of last session of Parliament by which the Bank was empowered to increase its capital by £3,000,000 (one- I fourth of which has now been issued), ' the institution is iiv a position to take j its full part in providing funds of I the further development of the country and the requirements of increasing trade and industry. You will | observe that bills discounted and other advances ' (which I together total £11,360,485), already show an increase of £603.157 as compared with the figures of a year ago; ! and, as satisfactory business offers, a \ further gradual increase in the total i under the herding of advances may be j looked for. In view of the upward movement in our advances, I would repeat what has been said in previous]

years, namely, that the greatest care and attention is given to this important branch of the business bv your directors and the executive officers of the Bank. Landed Property and Premises,— The opening of several new branches, and the necessity of providing better accommodation at points where our premises had become inadequate for our requirements, have entailed a considerable expenditure in building during the year. I 'am pleased, however, to report that the Sydney property, to which I referred last year, has been sold at a satisfactory figure. After, appropriation of £40.000 from profits, now made, landed property and premises stand at £419.577, as compared with £467,827 twelve months ago. Profit and Loss —After the payment of £40,000 interest on guaranteed stock and the making of all necessary appropriations, including provision for the Bank's annual grant to the provident fund as well as a bonus to the staff, and the allocation of £40,000 in reduction of Bank premises and Furniture Accounts, the net profits for the year amount to £308,490, as compared with £302,530 at 31st March, 1913. Adding . the amount brought forward from last year, £43,117, and deducting the amount of interim dividend at 6 per cent paid in December (£60,000). the sum available for distribution is £291,608. The directors now propose to pay a further dividend of fe per cent, and a bonus of 3 per cen|. on ordinary shares, and a further 4 per cent, on preference shares. The amount distributed to shareholders for the year will therefore be £125,000. As I have already jstated, it is proposed to transfer £175,000 to the reserve fund, and to carry forward the balance, £51,608. The dividend and bonus will be payable in Wellington to-morrow, 13th instant, and at branches on receipt of advice. While on the subject of profit and loss, I may mention that the amount appealing under the head of "Rates and Taxes" continues to increase steadily. Nearly the whole of this outgo is in New Zealand, where our total contribution to taxation, general and local, now exceeds £57,000 per annum, or nearly £llOO per week. In fact, the general tendency for expenses under all heads is to increase in a greater ratio than the profits of the Bank; but, in this respect, we are only in the same position as similar institutions.

Board of term of of Mr William Milne and Mr D. J. Nathan, t'«»> of the Government appointees on the Board of Directors, expired on 31st March last, and they retired as at that date. The Government appointed in their stead the Hon. Thomas Fergus, of Dunedin, and Mr R. W. Kane, of Wellington, both of whom are with us to-day. Staff. —ln the task of administering the steadily expanding business of the Bank, We are, of course, greatly aided by the fine body of men that constitute our staff. I am satisfied that in efficiency, zeal, and" devotion to the Bank's interests, our staff is not excelled, if it be even equalled, by the staff of any other Bank in the Australasian Dominions. The London staff are also deserving of special mention for the zeal they have displayed in the performance 'of their duties, which tins year have been somewhat heavier than usual. To the whole staff the Board have conveyed a tangible expression of appreciation by paying them a bonus of five per cent on their salaries—a recognition which I have no doubt will have your hearty approval, i General Remarks.— You will, no doubt, expect from me a review of existing financial and commercial conditions, and I therefore now turn attention to them for a few moments. The London money market underwent a sudden transformation early in the year. The best informed 'financial writers in London had failed to predict the impending change. In December last there was very little prospect of any ease in the money market, yet by the middle of January it had become clearly evident that money was in abundant supply. The New South Wales 4 per cent loan for £3,000,000, issued during the first week in January at the price of £96, was a failure, as the underwriters were saddled with 90 per cent of it, that is to say, the public subscriptions amounted to only 10 per cent. A fortnight later, the Victorian loan of £1,000,000, also at 4 per cent., with a minimum issue price of £97, was subscribed threefold, and formed the first of a succession of loan issues (including one of the New Zealand Government) which were eagerly subscribed for by investors. The London "Times," commenting or. the success of the Victorian loan, which was the first Colonial issue to be fully subscribed for many months, remarked:— "What the recoverv of Imperial Consols mean to our Colonial kinsmen may be gathered, from the cheering success of the Victorian loan. It would seem as if the long pent-up forces of investment needed but a little more encouragement to break forth into a flood of. buying." Imperial Consols, which during 1913 had dropped to £7l, and "which during the first week in January stood at £7l 15s, a fortnight later had risen to £74—an advance of £2 5s in two weeks. Art immediate improvement i'.i Colonial Government stocks also took place, and prices, on th« whole, have since been well maintaia-

led. The upward movement in Consols I continued,, and on 4th February trie •quotation was £77 12s 6cl, the highest (recorded tor a long time. Tins turn of affairs was very acceptable, tor giitedged securities had suffered very severely during 19i3, and the Enghsn Banks bad, to use over.two mjliions of their, profits to meet the decleusibxt in values. The -Bank of England ci iscounfc ratpjwhieh had-stood at 5 p.c. since the beginning.ot\October, was reduced on Bbh January to 4-J per cent.' On 22nd January it was agarh reduced t 0.4 per cent, and on ,29th January to 3 per ceut, at which it now stand:;. The buoyancy of the money market induced many Governments to israe loans in London. .New Zealand, and every State of the Commonwealthj have been on the market, and have placed their loans successfully. Iho New Zealand Government 4 per cent. loan of £4,500,000, issued in January—£l,ooo,ooo for redemption, purposes, the balance for Public Works—-was a great success. The minimum price of issue was £IOOJ, as compared with £93| for the last preceding loan ot £3,500,000 issued in October, 1913, clearly indicating the improvement that had taken place in the interim in the condition of the market. Upon the opening of the lists, a strong demand was apparent, and within, an hour and a half.. applicatipns totalling £'25,800,000- were received. _ The lists were then closed. The scrip immediately went to a premium of 1 per cent. The time for emission of the loan was well chosen, and the results no doubt' exceeded all expectations. In the course of my remarks at our last meeting, I pointed out that the New Zealand Government had been able to obtain for its October loan the highest price of the year for Colonial Government loans. It has maintained that position in its recent issue, as will be seen by the following:—

Some authorities'-hold the opinion that tire troubles that have ot late been experienced by tiie : bond-holders of some foreign states (Mexico and jJraxih), will operate in the direction of enhancing the popularity of British and Oyersea; Dominion securities, as being, though less remunerative Irom the point or view of annual yield, decidedly more dependable as regards security of both principal and interest. ■lhe inference seems reasonable, and we may perhaps hope to see the stocks and bonds, not only of the Dominion Governments, but also of the Municipalities and other Local. Bodies of the British Dominions, presently increasing’ in, public favor. \Ve took prompt advantage of the opportunity, , afforded by the favorable market early in, the year, to launch some Municipal loans which we had had in hand for some time. The following were successfully placed:— On 28th.. January, City ot Auckland, £224,500., 41 pel 1 cent., at par. On 11th February, City of Christchurch psloo,ooo, l.j per cent., at par. On 20th February, City of Dunedin, £150,000, 4.J per cent., at par.

The Auckland loan, being fust in the market, was oversubscribed. Those of Chrjstdmrch ,and Duuedin, which were 1 offered later, alter the market had been flooded with other issues, were .not so fortunate, anc i their underwriters were loaded with allotments in increasing ratio. The present disposition, of the market towards Colonial loans of this character has been clearly shown to be lukewarm, and we have:accordingly desisted;.from attempts at further \ issues in the meantime. Other opportunities will no douht arise in future, and those public bodies. who are .contemplating an appeal; to the London money market would do well to perfect all the necessary antecedent formalities, and have their arrangements in such forward condition, that issue of the, loan can bo made promptly when a favorable juncture occurs. While; the treatment accorded to -loans of. this class is now much less favorable than that extended to them a few years ago, we in New Zealand have, 1 think'; reason to congratulate ourselves upon the terms we are able to obtain, When wo compare our prices with those which others have to pay, our better position liecomes at ones?- evident. Each of the three loans above-mentioned was, it will be observed, issued at par, but an examination of the terms of other issues made during the first few months of the year by Municipalities in other parts "of the British Empire, and elsewhere, shows that several towns and cities of importance have issued 44 per cent, and 5 per cent, loans at prices below par—some as low as £9l; It is therefore clear that a Municipality, winch is able at the present tinie to issue its 4-} per cent, bonds at a minimum of par, has good reason to be very well satisfied with the achievement.

Although loans, Colonial and Foreign, have been issued in London with considerable success during the past . five or six months, and the value of money there is at present low, the terms on which Hotations can be arranged remain comparatively high, and political disturbances may at any time send them still higher. Caution is no doubt being exercised by British " financiers, and that there is need for it is evidenced by the unsatisfactory state of affairs in Mexico, and the financial troubles in France, China and Brazil. According to telegraphic messages to the press, France is under \ the necessity of raising some £24,000,000 almost imnfediately if she is'to lie in a position to meet her obligations. China and Bra/.iF are suffering from financial stringency, while Mexico, after a period oft exhaustion fr6m internal anarchy, is now at war with the United States. Some weeks ago the 'financial conditions in Mexico were extremely bad, and exchange had reached the worst point known for many years. British investors_ have very expensive interests in Mexico, andthe "clean up" will involve many iroißions sterling. The United (States Government alone talks ojY providing war

funds to the extent of £30,000,000 sterling. There are other contingencies''also that'may jeopardise tne money market, or at least cause a disturbance. In past years Great Britain has lent vast sums to finance the trade and industries of the world, and the disbursements under this head are worth recording. They are as follows : 1911.—United Kingdom £26,1-15,900, British Possessions £64>994,800, (foreign Countries- £10.0,618,700; total aij.91,759,400. 1912.'—United Kingdom £45,335,300, British Possessions £72,642,400, Foreign Countries £92,872,300; total £41.0,850,000.

1913.—United Kingdom £35,951,200, British Possessions £78,137,200, foreign Countries £84,448,600; total £196,537,000. Canada was. as usual, the biggest borrower last year, her total being £14,119,000 as against £39,951,20U for the United Kingdom, £18,628,900 for Australasia, £19,900,000 lor the united States, £15,000,000 for Brazil, and £12,000,000 for Argentine. As one authority observes, "the immediate course of markets must be determined mainly by the nature of the borrowing. Consolidation of floating : loans is comparatively unimportant: fresh borrowing for new enterprises is of the greatest importance. Capital taken off the market for the first time in loans and put into reproductive trade or unproductive armaments, must diminish the supplies of money and tend to raise discount rates and lower the prices of securities." The demand tor capital supplies is pouring in from all quarters of the world, and appears to be quite insatiable. lon will appreciate the immensity of the "rush" I, tell you that the applications dealt' with ■in the London market during the first two months of the current year amounted to nearly 72i millions, being nearly double the amount dealt with during the corresponding periods of each of the three preceding years. Such an enormous turnover must, if continued, sooner or later exhaust the supplies: and lead to an enhancement of money values. Writing recently on the subject of Loudon capital applications, a financial authority remarked:—"Although conditions have encouraged an abnormal output of prospectuses, nttr derwnters "have not been altogether revelling in easily-earned commissions, for in many cases they have been left with large* amounts of stock. Still, the market has shown a wonderful absorbing capacity, and new issue quotations at the present time, although in many cases favoring the public u> a small extent, have not prevented underwriters from disposing of their obligations on remunerative terms.

. . While new issues continue to be absorbed by the public. . . underwriters can reap profits the quickness of which compensates for the loss of a portion of their commission, and enables them at the same time to keep the underwriting market open for non securities. But the public’s absorbing power is not unlimited, and new applications at the rate of 100 millions: a quarter cannot continue for long without affecting alike the markets for both new and existing securities.” The. condition of trade is, of course, an important element in forecasting the future of the money market. For the past four years, trade iias been active and money has been dear, but the boom in trade seems to have ended, and slackness may now prevail for sbime time. Some of the relief of the monetary tension which has been experienced has been a consequence ol this; The British Chancellor, however, stated a few weeks ago that lie did not anticipate‘any serious set-back in trade, ami, while the phenomenal activity of 1913 was not likely to be repeated, lie expected the trade of 1914 to be up to the average. It will not' be safe, therefore, at present,* to count upon a prolonged period o! _cheap money. Locally, There is a tendency towards ease, but it is not at present pronounced; and no reduction of the ruling rates for accommodation is, in the' meantime, likely. We have also, to bear in mind that the gold production of the world exhibits a shrinking tendency. The labor troubles in the,Transvaal and the war in Mexico will lead to a restricted output in those countries, The following table is d summary of the production for the past seven years:— Year ‘ £

The total production for 1913 shows a decline of £2,204,119, or 2.3 per cent. The. Transvaal, which contributes more than'one-third of the whole world's supply, appears to have reached its maximum capacity as to output, and there is no other known field at the present time offering: prospects :>f substantially improved yields. If the production of the precious metal continues to decrease, it must ultimately have an adverse effect on the prices of commodities'. Some authorities hold that a reduction in the gold output of the world would not he an altogether. unmixed evil. They consider that the rise in the price of commodities that has taken place during the last decade has been' brought about by the concurrent large growth in the world's gold production. 1 cannot, however. myself see that the whole responsibility for hardened prices can be laid at the -door of gold production. It probably has had some influence in the matter, but the prinicipal reasons for tho increase must, I think, be sought for in other directions. The main factor, it seems to me, has been that of supply and demand following upon the higher standard of living that has gradually come into vogue during the last twenty years—the period throughout which the appreciation of values has been most marked. Population is increasing, and the producing section of the community is not increasing correspondingly, either in numbers, or volume of output. The producers are clamouring for and obtaining, higher pay and shorter hours of labor, which means that the product of their toil can be sold in the world's markets only at a price proportionately in advance of that at which it could be sold when- the. cost of production, was lees. Thus, every advantage that labor secures in its struggle for improvement of its conditions is won at the expense of the community as a whole. The consumer must, in the end, pay for the cost of producing the articles consumed, and hencfc, in large measure, the increased cost of living, of which in these days we hear so much. General Trade. —As I have already remarked, the boom in trade seems to have ended. There is evidence furnished bv nearly every commercial centre in the world that'trade is less active than it was. Some incline to the view that a period of depression is setting in. Last year was a record year tor British trade, the combined imports and exports amounting to the colossal sum of £1,104.151.000. ■ Eight years si-n viz., in 1906. the aggregate was only £1,068.5(55.000. The increase to last year's figures represents a .growth of 31.40 percent, during the period.

Most, if not all, of the leading countries' in the world enjoyed extreme prosperity throughout 1913. That condition, however, appears to exist no longer, fhere arc, moreover, at the moment quite a number of "lame ducks." The Balkan States and Turkey are suffering from the effects of the recent war; .Mexico is, as i have already observed, the victim of anarchy ; and China has been iu financial straits lor some considers hie time. Brazil is also in a bad way, owing mainly to the collapse of the "rubber market. The purchasing powers of the peoples in tnese countries are, as a result, very much restricted, and trslde suffers m consequence.

Mew Zealand Tratf9»— So far as this Dominion is concerned, ti'ad« is satisfactory. Our exports for the year ended 3lst March last attained a record level. A comparison of the values of the principal products exported during the past two years shows as tinder, 1912-1913 appearing in parenthesis';— Butter, 1913-1914, £2.140,019 £2,056,615; cheese £2,19y.3"3 ' (£1,809,179); beef £446,816 (£324,578); mutton (carcases) £P,872,654 (£1,500,728); mutton (legs and pieces) £32.848 (£43,, 522); lamb £2,518,944 (£1,825,312); wheat £11,806 (£95,414) ; oats (£lB,85S (,£168,880): potatoes £7,016 (£150,601)"; hemp £673,835 (£483,353); poultry, rabbits, etc. £77,907 (£50,851); tow £60,828 (£41,005) ; kauri gum £574,285 (£430,200); grain and pub« £80,(37 (£162,872); hops £26,430 (£20,698); hides £288,631 (£234,735); skins £925,565 (£860.782); tallow £101,085 (£672,849); timber £319,652 (£475,320)'; wool £7,584,063, (£8,065,915); gold £1,462,338, (£1,305,217); total, £22,049,650 (£21,128,686.) The past year shows an increase of £920,964, or 4.3 per cent, as compared with 1912-13, which year exhibited an increase of over £3,500,000 as compared with 1911-12. The increases for fie, past year are derived mainly from dairy 'produce and frozen meat.

Wool.—For the year, there is a shrinkage in the value of the wool exported amounting to £481,882, and the quantity is also less, the total being 182,854J0961b5, against 195,782,5431b5. Here, again, it is well to bear in mind that the recent strike dislocated trade, and, furthermore, wet weather delayed shearing. -On the larger number of sheep in the Dominion last year, as compared with the previous' year, it is reasonable to expect a bigger clip, and when the produce year closes this deficiency will have been more than recovered. The wool market is in a very healthy condition, prices are high, and the demand is active. Australasia has not as vet felt much benefit from the free admission of raw wool into the United States, because, the American manufacturers have been obliged to adjust their affairs to suit the changed conditions. No doubt American competition will presently make itself felt in this market. Frozen Meat For the year ended 31st March.last there was a very substantial expansion in the exports of frozen meat, especially in. mutton and lamb. Compared with the previous year, the increases were as follows: Lamb £723.602, • mutton €371,926, beef £122,238, total £1,217,766. 1 am inclined to think that the increase in mutton and iamb is exceptional, and that next year will show a.fall. Statistics seem to support this expectation, as a consideration of tile figures of. the past few years will show. Thus:— ,

Thus for 1911 the exports totalled 5,917,704 carcases, wkjle the sheep returns for 1910 showed that our flocks numbered 24,269,620. There was a shrinkage in the exports in the following year, for the sheep returns were smaller. ' In 1913 »d 1914 there are increases in exports; and for the past year the total is large, while the number of sheep last year, though larger than in 1912, is less than the figures for 1910. It appears, therefore, that there his been this year an excessive export or mutton and lamb. Accordingly, it is probable that" the'sheep returns will disclose a shrinkage in the flocks. If this be correct, a drop may be expected in the volume of next year's exports. The iiocks of the Dominion are practically stationary. Any increase is quickIv sent to the freezer.

A great deal of perturbation has been occasioned by the persistant rumors that the American Beef Trust has secured a footing in this Dominion. It is well known that two powerful American firms, associated with the recently dissolved organisation known as the National Packing Company, have been operating in New Zealand. These corporations command immense financial resources", and while they confine themselves to buying meat for export in the usual way, their advent in "the Dominion will not occasion us any concern- Should they seek to extend their operations' and to secure a monopoly of the meat trade here, there is no "doubt the New Zealand Government would take the mutter in hand, and. if necessary, legislate to prevent a repetition, in this Dominion, of the tactics which the combination is understood to have pursued elsewhere. The matter may be left with confidence in the hands of the Government, who, there is reason to think, are keeping a watchful eye on the movements of the Companies' representatives.

Dairy Produce. —The exports of hotter and cheese, the latter particularly, show a very gratifying expansion. The quantities exported during each of the past seven years compare as under:—

Tin' exports of cheese have move than clou bled in five years, and there is a satisfactory increase in butter. The production of cheese has been stimulated by the excellent prices ruling;. The defect of last season’s shipments • is said to have been that too much moisture bad been left in it. This is a blemish which manufacturers can easily remove. -The limit of expansion in the dairy industry is not in sight, and while prices remain good, growth will be certain. The opening of the Panama Canal, the reduction in the American tariff, and the revision of the American currency laws, will combine to encourage trade between Australasia and the United States. There will be many difficulties to be faced in pioneering the exports of Xo>v Zealand butter, cheese, and frozen meat to America, but these will disappear as our products become better known. Growth in the trade is obviously anticipated, as larger ami swifter vessels arc to be placed shortly on both the Vancouver and Sail Francisco routes. A direct service has also been mr.abd'died betw'-sn Australasia and New York via Cape Horn. Apropos

of out' extending markets, I would say that it is to be hoped that shippers will up punctilious as regards the cnavacter of the produce .sent forward, and chat the Government inspectors and graders will be rigorous' in their requirements, so that the .New /ea and output mat be maintained at a high standard, thus earning a popularity that may be well deserved, and securing a consequent command of a ready and remunerative market. It is in this way alone that a satisfactory and permanent trade can be developed.

Land Values The importance oi this question, from the "standpoint of ' the producer, is very forcibly borne in upon us when we review the values to which the pastoral and arable lauds of the Dominion have now attained. 1 have been engaged in an endeavor to arrive at the extent of the appreciation which has taken place in- values during tiie last twenty years, and have been generously assisted in my effort by trustworthy authorities in different parts of the .Dominion, for whose aid i have to acknowledge my indebtedness. The subject is one into which so many considerations enter that itJfc impracticable to arrive at. a uniform generalisation; but the figures that nave been furnished to me indicate that, as a rule, after allowing for variations necessarily incidental to local conditions, the increment in land values during the last twenty years has been generally greater than has heen justfied by the higher returns obtained in later years as the result of improved markets, better methods of working, etc., etc. For example: Taking the dairying industry, which was in its infancy in 1894, we find that land in favored districts, which in 1891 could have been bought at from £5 to £lo per acre, is now selling at from £'2o to, £75 per acre, an increase of say 400 per cent. The gross yield per acre has, however, not increased in a corresponding ratio, being only about 130 per cent, more io-day than it was then. Land hunger and competition are forcing values up to a point which leaves no margin for any material increase in cost of production or decrease in sale price of tiie product, and as the cost of production does not seem .likely to diminish, but rather to increase, no effort should be spared to maintain the excellence of the product, so that a drop h:> prices may not" occur as a result of deterioration in quality. The increment in the value of . sheep lands has, generally speaking, not been so heavy proportionately as that of dairy laud. Koughly, the value of such land has about doubled during the twenty years, hut the better average prices ruling now, and the improved prospects of the wool industry, quite justify the increase;

and sheepfarmers, working under normal conditions, have earned,in recent years a better return on their invested capital than they were obtaining a decade or more ago. With a view to arriving at an approximate idea of. the extent of the aggregate appreciation in value that has take*n place in the country lands of the Dominion, I have taken cut the capital valuations of County Lands at 1891, 1904, and 1913. They show the following comparisons : 1 1891—North Island £39,236,818",, South 'lsland £10,561,349, total £85,818,167. 1904.—North Island £66,968,046. South Island £54,998,106, total £121,936,152, increase 4212 per cent.

1913.—North Island £131,042.439, South Island £87,239,599, total £218,282,038, increase 78,96' per cent. The greater, part of the growth has, it will he observed, taken place in the North Island. The appreciation there between 1891 and 1904 was equal to 70.58 percent., and between 1904 and 1913, to 95.67 per cent. In the South Island, the increase at the two periods was 18.11 per cent, and 58.62 per cent respectively. The percentage of increase for both Islands combined is, as\ mentioned, 42.12 between 1891 and 1904, and 78.96 between 1904 and 1913. The actual values of the County Lands in the North and South Islands combined are, as I have quoted:— In 1891 £85,818,167, 1901 £121,986.152, 1913 £218,282,038. Including Boroughs and Town Districts, the totals are : In 1891 £122,225,029, 1904 £182.796,241, 1913 £340,559,728. Much of the increase is due to actual outlay t on improvements—clearing, sowing, fencing, building, etc.-—but the major portion is increase brought about by settlement, and the higher yield resulting from improved methods of'working and better prices. Clearly the values of land—dairying land especially—are adjusting themselves at such a level as leaves no room for the "slip-shod" farmer. If the. industry is to continue payable, with.land at such high values, seient&Jio principles must be followed and the most approv--ed methods adopted, in order tkatJ the very best returns on the labor and capital employed may be realised. Deed of Settlement—lt is proposed to have the deed of settlement of the Bank' amended so as to make, it conform textually to all the changes tl\at have been brought about by "statute, and yon will, at a later meeting, be asked to formally adopt the amended deed by special resolution passed in terms of Clauses 84 ami 85 of the existing deed. Opportunity.will, at the same time, be.taken to embody in the deed a provision to cany into c-f Feet the understanding arrived at last-year, between the Board and the Shareholders' Committee, in regard to the proprietors' rights of speech at general meetings. We hope to have all this arranged in time to, have the necessary resolutions passed at the next half-year general meeting, in December, of which due notice will lie given. It is.proposed also to have the various statutes affecting the Bank reprinted in such Form as will show at a glance those portions which have become obsolete and those which still remain operative. « By this means, the legislation and deed of settlement ot the Bank-will be brought up to date, and be made available in a convenient, form. In due course, shareholders will receive further advice on the subject. I now formally more the, adoption of the report and balance-sheet. Mr William Watson said: According to our usual custom, it devolves upon me. as the director appointed by the

ordinary shareholders, and due to re.tire at 31st March nest, to second the motion for the adoption of the report and balance-sheet, which I have much pleasure in doing. Regarding the affairs of the Bank, the speech of the chairman, which indeed may he termK'd that of the Board, has been most explicit and I can only add to it that the business continues to, be sound and prosperous.' It has been remarked in some quarters that Bank dividends ■have been high of late yours, and various economic suggestions have been put forward bv those who have overlooked the fact that reserve funds, built up -in times of little or no dividends, and from premiums on shares, help largely to earn profits. This-ap-plies specially to the Bank of New Zealand. 1 shall again stand for reelection to the Board at the half-yearly meeting in December next, when 1 shall have completed twenty years' service as a director- and 1 trust that the confidence placed in me hitherto will not he diminished on that occasion.

Date Name of Amount Rate Issue of Issue Government of loan. p.c. price. 3-1-1 9 If New South Wales £3,000,000 4 £90 10--1-1914 0 Saskatchewan 1.000,000 44 964 21-1-1914 Victoria ... i.ooo. (tin 4 97 39-1-1914 AYest Australia 2.000,000 4 984 2-2-1914 New Zealand 4,500.000 4 loot 3-2-1914 South Australia — 2;000,000 4 .100 13-2-1914 I' fnon of South Africa ... 4,000,000 4 984 4-3-1914* Dominion of Canada 5,000,000 4 99 20-3-1914 Tasmania 1,500,000 4 99 6-4-1914 Queensland 2,000.000 4 99 19-5-1914 New South Wales 3.000,000 4 99

1907 . ... 82,258,892 1908 ... 88,680,905 1909 ... 91 ,985,496 1910 ... 90,842,730 1911 .... 91,875,461 1912 ... 94,866,650 1913 ... 92,662,534

Year ended Exported Total number .list March. -Carcases. of sheep. 1909 — 23,480,707 1910 . o,044,171 24,289,620 1911 , . 5,947;704 23,996,126 1912 . 4,897.398 23,750,153 1913 . 5,106,199 24,191,810 1914 . 6,376,615 — '

Year ended Butter. Cheese 81st March. ewfc. cwt. 1908 • ... 271,323 282,073 1909 275,Odd 310,085 1910 821,975 441,884 1911 307,849 456,371 1912 327,282 403,610 1918 809,183 634,173 1914 895,109 742,371