BANK OF NEW ZEALAND.

Colonist, Volume XLIX, Issue 11968, 22 June 1907, Page 3

BANK OF NEW ZEALAND.

MEETING OF SHAREHOLDERS ANOTHER SUCCESSFUL YEAR. Wellington, June 21. The ordinary general meeting of the proprietors of the Bank of New Zealand was held at the Bead Office of the Bank to-day. Mr H. Beauchamp , Chairman of Directors, presided. In moving tbe adoption of the Report and Balance-sheet, the Chairman (Mr Beauchamp) said:— I propose to commence my remarks to-day with the usual comparison be tween the principal items in the present Balance-Bheet and those of a year ago, and 1 am glad to be able to meet you with a very satisfactory report— the figures showing a substantial increase in almost every , case. The Paid-up Capital of the Bank remains unaltered at £2,000,000, comprising : — 4 per cent. Guaranteed Stock £1,000,000 Preference Shares issued . . to the Crown .. .. 500,000 And Ordinary Share .. Capital 500,000 The Reserve Fund stands in the Balance-sheet at £81,294, but you will be pleased to learn from the Report of the Directors, which has been circulated amons Shareholders, that the Directors have appropriated from the profits for the year ended 31st March last the large sum of £168,705 in augmentation of the Reserve, making the total amount at oredit of that important Fund £250,000. The Directors of the Banu are fully alive to the advantages of an institution like the Bank of New Zealand possessing a strong Reserve Fund, and they have taken the very first opportunity permitted by Statute of setting aside a large pro-, portion of the profits of the year for this most desirable object. It is hoped that the profits of the Bank in the immediiate future will be such as to permit of a considerable amount being allocated yearly to the Reserve Fund. Notes in circulation are greater by £88,937, and stand at the not unim pcrtant figure of £965,190. Bills payable and other liabilities are this year shown in one sum. This is in keeping with the practice usually adopted in Bank Balance-sheets. The increase in the combined totals is £539,238, being mainly in BillPayable, which are always a^varying quantity. Deposits are, in the aggregate, greater by £488,, 000 than at 31et Marcb, 1906. New Zealand, Go- - vernment credit -..-.knees are" included in the item "Deposits" in our Balance-sheet, and tnese stand at a somewhat lower figure tban a year ago. The increase in the ordinary Current Accounts and Fixed Deposits is over £800,000, whicL i.idiciates a very satisfactory expansion in this branch of the Bank's business, the result largely of the increasing returns accruing to the producing interests of the colony from the good prices ruling for its staple produots. Coin, Bullion, Money at Short Call, and Bills Receivable.— The increase under this head is not material. Coin and its equivalents stand at £2,160,605, a slight decrease on last year's figures. Daring the year just closed we have been able tc take full advantage of the high rates ruling for money in London and w . are still earning there "very f gooc interest for money at short call.

In connection with our London'business I am glad to saylthat notwithstanding the severe financial crisis I in' America, which of course had its effect on monetary affairs in Loudon, 1 the Bank escaped without loss. '> I Our surplus funds,; which ordinarily accumulate in London, irealways readily available to meet the ; requirements of our business in New Zealand. Bills Receivable in London show an increase of £3b.},uuu. Investments inlltho Colony;. have been increased?! from" £ 924,d40 't0 £1,027,810, ranjincrease of £10o,_>uu. I f Bills Discounted fand Advances together stand at £8,813,601; n igain . forlthe year of close on £Soo,uuu. Bills Dicounted are less, but other advances havo increassed by upwards ; of £800.000. Tlio business in this Department has been careluliy selected, the advances are well ; spread, and the securities injill cases afford a safe margin. Assets Realisation Board.-- You have all grown familiar with the item "Assets Realisation Board Debentures" which has for so long occupied a line in the Balance-sheet. You will note with satisfaction today that the item in question has disappeaied. As announced to you by the Chairman in December last, the Assets Realisation Board was dissolved on the 17th December, 190 b, when the outstanding Debentures of feho Board were cancelled, and the remaining assets of the Board passed to and vested in the Bank in terms of the provisions of section IS ot "The Bank of New Zealand Act, 1903. ' ' The Bank had previously— at 31st July, 1906— taken over from the Board all mortgages, sale contracts and other Sccuities aggregating .. *--(i,ttiu The , remaining Assets which^became vested in the Bank on 17th De- , cember, passed into the Bank's books at .. " _ 461 1°_ Making the total Assets Realisation Board assets dealt with The position of these accounts as at 31st March last was as follows : - Balances owing by Pur chasers ™»'-?? Unrealised assets .. •• <■>*->> o*± £753,199 while to-day the Ag*™ a ™ re £_altively £407,357 and £300,100. totalhDThifamount, £707,457, represents the balance of the late Assets Board s assets » the hands of the Bank today. It will therefore be seen that a /eduction of £125,000 has aijeady been effected as.trie result of realisations of assets, The actual sales o* properties effected by the Bant since taking over the assets on 17th December last amount to £160, 1.4/ at! this date. . } ;With a view to becoming person, ally acquainted with the principal dependencies taken over from the Assets Realiatsion Board by the Bank, I visited the Auckland District— in'company with three of my colleagues— last April, and as the result of our close inspection, 1 am glad lo state that we are of opinion we shall be able to realise most of these assets within a reasonable time at the values which tliey now bear in the Bank's books. We fully re-coo-nise the importance of quitting these Assets with as little delay as possible, and vigorous steps are being taken in order to accomplish this. From the figures I have quoted, you will notice that since the Assets came under the direct control of the Bank a considerable area of land has been disposed of. Landed Property and Premises (including Colonial Bank Property and Premises), which stood in^tho Balance-sheet last year at £320,770, now stands at £322,724, a decrease of £-046. . _ , During the year sections havo been purchased in several new centres with a view to meeting the requirements of our expanding business. At other points new premises have been erected. A considerable sum has also i been spent in necessary alterations and additions. As formery, a large proportion of the cost of repairs and renovations to our premises has been charged to Profit and Loss Account. Although the capital expenditure ■ represented by these additions to our property and premises amounts to close on £14,000, no increase is shown in the Landed Property and Premises Account, the Directors having again appropriated £16,000 of the years profits by way of provision for depreciation in these assets. The Balance of Profit and Loss ior tbe year, after providing for the usual items, stands at £294 : 851, as against £274,329 for the previous year, an increase of £20,552. The Bank has again shared in the general prosperity of the Colony, and monetary conditions in London have been favorable to the earning of profits there. . In a large expanding business such as ours there must naturally be some increase in the working expenses, but due regard is had to economy in all branches of the sevvice. The increase in the cost ot management for the year is £14,120. Salaries are higher by .. £'100 General Expenses, including rent, stationery, officers' removal expenses, etc . - l»00 Other items, consisting of rates, taxes, note duty , etc. . . £_>_:oo With regard to salaries it should be explained that we are now working with a much larger staff than formerly in order to cope with the greater volume of business transacted. The total numerical strength of the Staff at all our branches, including London, is now upwards of 700. As the profits of the Bank have increased, the Board have not been unmindful of the interests of the staff, and the average salary paid today is all round higher than it was some years ago, ana compares very favorably with the scale of pay in other kindred institutions doing business in this Colony. Dividend.— The position in regard to the payment of dividends by the Bank, now that the Assets Board has been dissolved, was fully explained by the Chairman in December last, when an interim dividend of 5 per cent, was paid to holders cf Ordinary Shares and iv respect of the Preference Shares issued to the Crown. The Directors now propose to pay a further dividend of 5 per cent, on the Ordinary Snares, making 10 per cent for the year. The payment in respect of the preference Shares will consequently be 2Y 2 per cent._,making 7^ per £.cent for the year, in terms of the provisions of Statute bearine upon this matter. After payment of these dividends, aggregating £87,500, transfer to the Reserve Fund already referred to, £168,705, and special donation of £7,000 to the Bank Officers' Provident Fund, to which I am about to : refer, there remains the very s ibstantial sum of £31,675 to be carried forward to next year'sjaccount. The Provident Fund.— Speaking of the Provident Fund, I have to remark that, to place it upon a better financial basis, the Board think it should, from time to time, as circumstances permit, be strengthened by contributions over and above the regular annual donation given for some years by the Bank. It is thought, also, that an .effort should be made to increase the minimum and perhaps the maximum —but especially the minimum—pensions payable to officers upon retirement. To ascertain how the Fund stands at this period of its existence full information has been transmitted to a leading Actuary in London, and, upon receipt of his report,

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the Board will then consider whit steps it will be desirable to take to improve the position aud capabilities of the Fund. General Remarks.— ln dealing with the affairs of the Bank it is difficult to refrain, even if one wished to, from making some reference to the prevailing prosperity, also the commercial and ecnomic conditions that exist at Ihe present lime. Tho Trade Returns of Now Zealand testify most eloquently to the satisfactory growth of our oversea commerce, and the same may be said of tho Trade Returns of most other countries. Indeed, 1906 was a record year in this connection. Taking the export figures of several countries, and comparing same with 1005. we get the following remarkable results: — Exports, 1906. Increase, Per

The figures for Canada are approximate only, but those for New Zealand are the official returns for the year ended 31st March last. The expansion in the exports of this Colony is very striking, but it is without doubt due more to tbe abnormally high prices for commodities than to a substantial increase in their volume. In point of fact, we know that New Zealand's export trade has latterly [been inflated— if I may use that term— by the remarkably high prices obtained in recent years for the staple products of the Colony. For example, the value of butter exported for the year ended 31st March, 1904, averaged 90s l}£d per cwt, while for 1907 the average was 98s 9d ; cheese averaged 47s lOd per cwt fin 1904 and 55s^ 2}£d in 1907: hemp averaged £26 4s 3d per ton in 1904 and £29 lis 4d in 1907, and you are all aware howbeneficially we have been affected by the sharp advances that have takon place_ in wool, sheepskins, tallow, hides, leather and other of our products in recent years. As I have indicated, there has been unfortunately only a moderate increase in the quantities but the high prices have stimulated enormously the demand for farm lands. Broad acres command very big values, which undoubtedly are based on the -figures now ruling for produce. £40 per acre may not, in the opinion of a farmer, be excessive under existing conditions, but I would emphasise the fact that such a valuation leaves no room for an appreciable fall in the price of the produce of such lands. Iv the light of past experience, we must contemplate such a contingency, and if this occur to the extent of from say, 20 to 25 per cent in the values of produce, it would seriously affect and perhaps financially embarrass many who have bought agricultural and pastoral lands at fancy prices. How to minimise the effects of a possible shrinkage in values of produce is a matter of urgent importance, and it seems to me that farmers generally mual giro closer attention to the improvement in the breed and condition of their live stock. It ia essential than the quality of dairy herds paiticular ly should be improved, so that each cow in the herd shall yield a larger percentage of butter-fat. The quality of our mutton andamb also must be maintained at the highest standard by the free importation of the best stiains of rams, and ewes Our competitors quite recognise these necessities, as recently it was reported that a representative from Uruguay paid one thousand guineas for a ram, and a relatively high price for ewes in Australia. For yeu.s past the Argentine has been a very consistent importer of pedigree stock, and it is common knowledge that in Canada there are very stringent regulations having for their obiectthe imprvement of the Dominion herds kept for dairying purposes. Much may also be done by perfecting, as far as possible, our modes of working— by being constantly on the look-out for improved methods of production whereby the value of our output may be increased either in quantity or quality— by utilising the latest appliances as soon as the practicability of their profitable utilisaion has been established — by, in short, determining to be in the van and not in the rear of industrial progress, so far, at any rate, as our own particular industries are concerned. Our sheepfarmers, dairymen and others cannot longer afford to overlook these matters unless they des ; ra to court disaster in the near future. There is. as I have said, a strong and genuine demand for farm lands. Indeed, it might very safely be said that a veritable earth hunger exists, . but settlement is not progressing as rapidly as it ought for many reasons. The latest official returns procurable cover the period to tbe 31st March, 1906. and the registration at the Land Transfer and Deeds Kegistration Department shows the following transactions in country lands in the several districts of the Colony : —

Of this area 1,261,968 acres are in the North Island, and only 794,513 acres in the South Island, indicatiug very clearly that settlement is progressing much more rapidly in the North than in the South Island. Moreover, the march of settlement is most noticeable in the Auckland Province, where there happens to be the greatest scope for expansion, and where land is comparatively cheapest. The values set out in the return from which I am quoting show that the land transferred in the Wellington district averaged .£lO per acre; in Canterbury, £8 per acre; Otago, a little less than £5 per acre; and in Auckland, slightly more than £2 per acre. These averages include tbe values of town and country lands sold. It is, as I have remarked, the extent of land available and the low prices that are attracting settlers to the Auckland district, and it is significant that shrewd farmers are selling their improved properties in other parts of the Colony and moving Northwards, where they are ap« parently rinding a more profitable field for their enterprise and industry. This desire to acquire unimproved lands deserves to be fostered and encouraged ; and while one may freely admit that the Government is doing its best- in that direction, much more remains to be done. Perhaps when the Commiseion now enquiring into the position of Native lands has finished its labors, a great deal more new country may be available to the eager pioneer settlers ; country which now is absolutely unproductive, and in many cases, owing to the growth of noxious weeds, is a source of danger and expense to adjoining European owners. The permanent prosperity of the Colony depends unquestionably upon the aids and facilities afforded to men to make productive its virgin lands, and the fundamental need of the pioneer is roads — roads that he can use freely and safely in the winter as well as in the summer, which he cannot do at present. What we need is a policy of vigorous road-making in the backblocks, and any money so spent would be a wise aud profitabe expenditure, and woulld, 1 am sure, be heartily endorsed by the people of the Colony. ! Board of Directors.— ln April last, as most of you are aware, 1 w? s

MMlM "«M«"___»Mniw_aM_ii__M—^— _—Bja_—^"^i^ elected Chairman of the Bank in succession to Mr F. de C. Malet, who resigned that position as at 31st March, after serving the Bank in that capacity for rather more than five years. My colleagues , and I have, by minute of the Board, expressed and recorded our appreciation of the very able manner in which Mr Malet discharged bis duties as Chairman for the period named. Unfortunately, owing to illhealth, he is not able to attend the meeting to-day, but I am sure you will join with me in' hoping that he will speedily recover from his present, indisposition. Tbe Honorable Sir James Prendergast retired from the Board as at 31st March, and the Government appointed Mr W, H. Quick in his place. During the live years that Sir James Prendergast was connected with the Directorate he rendered good service to the Bank Mr Martin Kennedy left the Colony in February last on a visit to England He is expected to return befora the close of the current year. Whilst in London he will be associated with the local Board there, and I bave no doubt that his business acumen aud leDgthy experience will prove of considerable advantage tc our representatives in that city General Management — As indicated at our meeting in December last, Mr Alexander Michie voluntarily retired from the Bank as General (Manager on 31st March last In the various positions he occupied during his connection with the Bank, and in particular as General Manager, he discharged the onerous duties allotted to him with conspicuous ability and tact, and has, consequently, well merited the thanks of the Directors and shareholders of this institution In the interests oi the Bank you will be glad to know that he has accepted a seat on the London Board, so we shall still have the benefit of his services in another capacity. In Mr William Callender (who haa been connected with "the Bank for 37 years) we have an able successor to Mr Michie, and the Board is sanguine that under his manage mant the business of the Bank w ill continue to expand and prosper. Mr B .M. Litchfield, who was appointed by the Government to the position of Chief Auditor of the Bank in place of Mr Callender, assumed his duties as at 31st March last. Staff. — In concluding, I desire to express my colleagus' and my own appreciation of the splendid services rendered to the Bank during the past year by tha London, Australian, Fiji, and New Zealand staff. We have endeavored to show our appreciation of their services in a tangible manner by the payment of a five per cent bonus upon all salaries, aid a handsome contribution to the Officers' Provident Fund. In adopting tbis course we feel satisfied that we are encouraging and stimulating our staff to work more zealously than ever in promoting the Bank's interests at" every point where it is represented, and we feel sure that shareholders will approve our action in thus recognising the good work of the staff. I must not close without mentioning how greatly we are indebted to the members of the London Board for the care and unremitting attention they devote to the conduct of our large and increasing business in tbat city. 1 now formally move the adoption of tho .Report and Balance sheet. If tbis resolution be carried, the dividends proposed — viz., 2^ per cent on the preference shares, making 7J^ per cent for the year, and 5 per cent on the ordinary snares, equal to 10 per cent for the same period — will be payable in Wellington on Monday next, and at the Branches on receipt of advice.

Auckland .. 59 ,335 acres. Taranaki .. 59,136 acres. Wellington .. 355,316 acres. Hawke's Bay 112,272 acres. Poverty Bay . . 13.6, 909 acres. Nelson .. 37,342 acres, Marlborough 39, 179 acres. Cfnterbury.. 399,838 acres. Otago. . . . 183,352 acrea. Southland .. 128,706 acres. Westland .. 6,098 acres. 2,056,481 acres.

£ £ Cent. Great Britain 375,672,913 45,846,299 13.9 Germany ... 312,186,750 20,095,900 6.9 France ... 701,746,600 9,071,923 3.G Belgium ... 97,647,280 9,941,000 11.3 Italy ... 73,434,055 4,107,518 6.1 Eussia ... 106,117,800 0,917,900 10.3 United States 359,621,400 34,223,400 10.5 Canada ... 43.248,835 1.500,000 3.5 Australia ... 69,798,989 12,957,954 18.6 New Zealand 19,435.189 3,187,977 19.6