BANK OF NEW ZEALAND.

Colonist, Volume LV, Issue 13775, 16 July 1913, Page 4 (Supplement)

BANK OF NEW ZEALAND.

ANNUAL MEETING.

CHAIRMAN'S ADDRESS.

A STORMY GATHERING

(From "Tho Colonist," Juno 27.) Wellington, June 26. Th© annual mooting of shareholders of the Bank of Now Zealand was held toThe'cha.irman (Mr. H. Beauchamp) in moving tho adoption ot the report and balance sheet, said:—■ You will have seen by tho report and balance sheet, recently distributed to shareholders, that the bank has experienced another good year. In© amount available tor distribution, though not quite as large as for tho prevfous year, it still very satisfactory and tho Board is able to recommend tho payment of a dividend at the same rate ai formerly, and the transfer of £175,000 to the reserve fund, lho position of tho Bank I am pleased to say, continues to bo thoroughly sound, and its business fully maintained in all departments. In conformity with our usual custom I will refer briefly to the principal items in the balanco shoet. Capital.—Tho paid-up capital remains the same as previously, namely £2,000,000. As indicated at tho last half-year goueral mooting, the question "of an increase in the bank's coital has "been engaging our attention. A recommendation on the subject has boon made to the- Government, and in due course no doubt a measure will bo brought forward in tho session ot' Parliament now about to open, embodying, we trust, proposals that will bo fair and equitable to all tho interests concerned. Until tho views of the Government are made public, it would bo premature for us to enter into any discussion on the subject.

A committeo, acting in the interests of the ordinary shareholders generally, has called, for 4th July proximo, a meeting in terms of clause 79 of the deed of settlement for the purpose of considering the question from their own particular standpoint and arriving at resolutions on tho subject, which will no doubt bo communicated to the Government in duo course. At that meeting you will have full opportunity for voicing your views on tho subject. It is proposed, therefore, to limit the business of this meeting to tho matters usually dealt with at an ordinary general meeting, leaving the capital question for discussion at the special general meeting called for 4th proximo.

The Reserve Fund.—As already mentioned, tho Board proposes to place £175,000 out of profits to credit of this fund, making the total £1,875,000—a most satisfactory figure having regard to the fact that seven years ago the fund amounted to only £81/294. With the balance proposed to be carried forward (£43,117), the reserve fund and undivided profits will amount to £1,418,117. Notes in circulation aro less by £36,286 than at 31st March, 1912, and now stand at £994,680.

Deposits, (£16,414,639), exhibit an increase of £580,772 on the figures for a year ago, mainly due to larger Government balances. Free deposits have shrunk a little, but on tho other hand fixed deposits, notwithstanding the high rates for money ruling outside, havo been well maintained, and in fact show a slight increase. Ihe fixed deposit rates were raised by one-half per cent, during the year. Bills payable and other liabilities, £1,367,081. There is practically uo variation in this item as compared with tvvolve months ago. Coin, Bullion, Money at Short Call, etc. —Coin and cash balances, and bullion, together stand at £3,148,930, an increase of £4-1,417 as compared with the figures of a year ago. Money at short call, Government and other securities in London, also show an in-crea-se, the present figures (£4,051,038) being greater by £764,878 than at 31st March, 1912. Larger Government balances account for the major portion of this increase.

The totals under above headings, together with the amount of bills receivable and investments in the colonies, nre equal to 58.7(3 per cent, (or lls 9d in the £) of the total liabilities of the bank to the public.

Bills receivable, in London and in transit, stand at £2,847,126, an increase of £440,860, caused principally by an expansion in the value of the Dominion's exports.

Investments in the colonies are less by £307,979 than at 31st March, 1912. Tlie transfer of some colonial government securities to the London office practically accounts for this decrease.

Advances. —The remarks made in tho bank's report of twelve months ago apply also to-day. The monetary, conditions then existing have not materially altered, and the bank, while responding to the reasonable requirements of its customers, has necessarily adhered to a cautious and conservative policy in regard to advances.

Bills discounted, which now stand at £1,253,254. are more by £32,179, and other advances (£9,004,070) are less l.y £103,073 than at .'ilst March, 1912. I may mention that the balances owing by purchasers of Assets Realisation Board assets, having been reduced to comparatively small figures, arc now included in "other advances," and the item therefore censes to nppo.'ir in tho balance sheet under a separate heading;.

Landed Property and Premises.---After appropriation now made of £ 10,000. -liis item stands at £407.827, as against £420,538 last year. This considerable increase has been mused principally by purchase of land and promises at Sydney, arid of a more central site in Pahnorston North. Apart ■from these two transactions, sevev;v! new buildings 'luivo bwon erected, and others altered and enlarged, the continued development of tho bank's business having rendered > uch works necessary.

Profit and Loss. —The net profits for the year, after paying tho £40,000 interest on guaranteed stock and making all necossary appropriations, including provision for the hank's an mini grant to ihe provident fund and the allocation of £40,000 iri reduction of batik premises and furniture accounts, amount to £302.530, as compared with £331,182 at 31st March, 1912. Adding tho amount brought forward from hist year (£40,587) and deducting tho amount of interim dividend at 6 per cent, paid in December (£60,000), the sum available for distribution is £233,117. Tho directors now propose to pny a further dividend of 6 per cent. and a bonus of 3 per cent, on ordinary shares (making lo per cent, for the year) and a further 4 per cent, on preference shares (making; 10 per cent, for the year). Tho distribution to shareholder's will therefore amount to £125,000 for the year. As already mentioned, it is proposed to transfer £175,000 to the reserve fund, and to -carry forward the balanco, £43,117. The dividend and bonus will be payable in -Wellington on the 27th instant, and at branches on receipt if -advice. Mr. J. M. Johnston, one of tn« •Government directors on tho board, retired at 31st March, tho torm for. which he bad beon appointed having expired, and Mr. J. H. Upton, of Auckland, was appointed in his place Since we last met you, our Jato chairman, Mr. Martin Kennedy,..-has paid a visit to Europe. During.,, hus stay in London he was associated/with the board there; and ha« no doubt acquired v aluable information connected with our London business. We are much indebted to tho niern-

bers of the London board for the cafe which they have displayed in supervising our extensive business at that point. , ■>■ GENERAL REVIEW. Unquestionably, stringent monetary conditions continue to prevail, an.d are more accentuated than on the o ocasion when we last met you. Tho causes of the existing tightness are, m the mam, not local but general, and it is because of the nature of tho circumstances that have produced them, and the extent of tho area over which the causes are oporating. that I am not too sanguine of an early return to easier conditions. An exceptional feature influencing the European mojioy markets during the last few months has been tho war in tho Balkans, conjoined with tho political uncertainties which that war has involved. As a consequence, each of the great European Powers has been making strenuous endeavours to strengthen its own financial position, and to obtain the control of gold supplies so as to prepare as effectively as possiblo for the contingency of itself becoming involved in hostilities. At London, Paris, Berlin, and Vienna, Jiigh bank rates have consequently been ruling for many months past with that object in view. A review of tho events of recent yearg .serve? to show that there Tr/ant have beOn an Gnofm6u3 waste of the wealth and substance of the world in tho wars that have taken placo since tho commencement of tho twentieth century.

An abnormal and increasing expenditure upon armaments lias, at the same time, boon going on among all the leading nations of tho world, and so tremendous has this expenditure been that it is becoming a. menace to the finances of some who are bent upon persisting in the race for naval and military supremacy. Other nations are also coming into the field. Turning to tho East, we see Japan taking her placo as a world Power and calling for the financial backing necessary to enable her to maintain her fleet and array in a state compatible with her pretensions. Further, China is bestirring herself, shaking off the lethargy of centuries, and displaying a disposition to follow tho lead of her island neighbour. Her call for tho means to acquire modern arms and armaments, and for capital to oxploit her vast undeveloped resources, is already being heard in the money markets of the world.

These are considerations of national and political significance to which thy financial barometer is keenly sensitive. They constitute in themselves a situation sufficiently disturbing to account for a largo part of the monetary stress which the civilised world has been and is experiencing; but there are other features to which I desire briefly to refer that are also exercising'a most potent. influence on the- financial position and outlook. Concurrently with, and to somo extent as a consequence of, tho deplorable destruction of life and property. that has been entailed by actual hostilities, and the absorption of capital in the building of battleships and growth of armies, a keen industrial activity has been experienced in almost every quarter of the civilised world, involving a very strong demand for capital supplies to finance manufactures and production. The steadily improving social conditions of the world, and the higher standard of living which is now being generally adopted may also be. set down as among the originating causes of the scarcity of money. Then there is the assimilation of western ideas that is going in among the eastern nations t.i the world, and the resulting tendency to frame the requirements of life—individual and social—on tho basis of western models. But perhaps more important and weighty than all those, is the heavy perennial demand arising in connection with the colonisation and development of the unoccupied lands of the world—work which, year by year, goes on in continually increasing volume. Apart from the natural inoreaseof population occurringyearly in the Ne>\v World, and the necessity for opening up channels of employment whereby iho units of these growing nationalities may earn a livelihood, a steady stream of emigration from the old world is continually flowing to tho new lands across the Atlantic. Discontented with the existing conditions of life and labour in the lands of their birth, and despairing of improvement, the European peasantry are in ever increasing numbers migrating to the American continents. Attracted and encouraged by the experiences of the earlier settlers, their osodus to the West assumes every year larger and yet larger proportions. In a small way, we have oxperience of it in our own land, but, with our restricted immigration, we can hardly have any clear conception of the phenomenal development that is going on in such rapidly progressing portions of tho earth as, for example, Canada and the Argentine. It may, however, assist in emphasising the point to mention that, during the year 1912, the immigration into Canada reached the large aggregate of nearly 395,000 persons, showing an increase of over 13 per cent, on the total for 1911, which was itself a record year. The call for capital to_ assist in settling this large population in its new home, and to furnish it with the means of earning its subsistence, is in itself enormous. During the year 1912, nearly £47,000,000 of the new capital issues in the London money market wero on Canadian account, and over £20,000,000 on account of tho Argentine. It will be readily seen how fertile a channel this is for the' drawing off of surplus supplies of British and Continental capital.

In sympathy with the increased activity of industry, the volume of British trade shows & largo expansion, tho totals for 1912' having reached the cmormous aggregate of £.1,844,109,000, the highest cvor recorded, being an increase of £107,133,000 over the figures of the previous year, 1911 — which was itself a record year. cSmo" June, 1909, contiuous quarterly trade increases have taken place. Tho "boom" i.n that great industry, shipbuilding, which, commenced «omo time ago, is fully maintained, and nothing points to an early decrease in activity. In this connection, I nmy mention that on tho 31st March last, there were 563 vessels, aggregating 2,083,700 tons, under 'construction, as compared with 545 vessels, totalling 1,680,900 tons, in the corresponding quarter of 1912. It is natural to expect that, in the circumstances, the appeal to .the-London market for the capital to finance such' a huge volume of business would be extensive. As a matter of fact, the capital issues on the London market in 1.91.2 reached the large total of £19,090,000 over tlie.figures of 1911. The amount is, of course, far short of the figures for 1910, when £267-,430,000 was raised on tho London market-—an altogether abnormal sum : so much so that the business was clearly overdone and the future heavily discounted. The "slump" which subsequently occurred (and from th« effects of which we arc even now suffering) is undoubtedly attributable to the excessive amount of this class of business at that time undertaken.

.The combination of adverse influences above mentioned, operating at one and tho, same time, have constituted a drain upon tho financial ..resources of tho world that has teen stupendous, and.-tho marvel is not that there has been financial stringency, but that the stringency has not been much more •pronounced. . : Tho world's gold production shows steady expansion in. recent years. In 1912 the output was the highest on record—about £97,000,000; and it has trebled within the last twenty years,

.' .levertheless, the growth is in no sense commensurate with the increased credit requirements, and there is reason to fear that, at the present time, * theavailable gold (reserves, forming the basis upon which the huge superstructure of credit rests, are quite inadequate. The efficiency of the existing supply of the precious metal is, to a, considerable extent, impaired by tho tendency on tho part of some nationalities to hoard—a disposition to prefer th© possession of gold to the command of the credit which the gold can secure. At the present time, the most persistent call upon the gold reserves of tho world is from India—a country which, with comparatively light external indebtedness, exports yearly, a large surplus^ (last year 58 per cent, more than she imported), and is, therefore, iv tho position of always being able to command gold in settlement of her trade balances. During the last three years, India's surplus exports have amounted to £150,412,000, and her net gold imports to £71,245,000. Tho absorption of gold is, to some extent, due to the stoppage of tho free coinage of silver by the Indian mints, and tho gradual standardisation of gold in tho Indian currency by making it, alternatively with the silver1 rupee. legal tender throughout the dependency ; 'but, after making due allowance for these factors, there is reason to think "that a Very large proportion of the Indian importations goes into pnvite hoards and disappears from uso. Some recognised authorities aver that immense sums of money lio buried in India. Be that as it may, it is certain that a large amount is annually absorbed there in tho manufacture of ornaments for personal adornmont, the penchant of the Indian native for display in that particular being well known. Unfortunately, the disposition to hoard is a failing not confined to countries such as India. European nations resort to it occasionally, especially in the face of a national crisis, such as tho imminence of war. In tho recent critical state of international relationships, tho practice was freely resorted to in Europe. Tho president of tho Imperial Bank of Germany, giving evidence before tho Budget Committee of the Reichstag a few months ago, remarked upon it, and stated that during the last quarter of tho year the withdrawals from tho Imperial Bank aggregated £25,350,000, whereas the normal amount for tho corresponding period in provious years was about £2,700,000 only. The German savings banks also lost some millions at -'.he same time, whereas, in. ordinary circumstances, tho savings hanks deposits would have shown a largo increase. There is reason to. think, too, that a similar process was. concurrently going on in France, but exact figures aro not available. I have gone into this subject thus fully in order that you may have a clear idea of the main influences that have contributed to bring about the present financial tension. I am not without hope that the re-establishment of peace on a firm and enduring basis may, in the course of a iew months, effect an improvement in the present situation and outlook. The restora : hlnn of confidence may bring about the rsloase of tho hoarded European millions, which will flow again into tho old channels and relieve tho strain; but I ata not sanguine of a speedy change, as tfe* settling up of the liabilities incident to tho war will involve a heavy, demand on credit supplies. It is satisfactory to note, however, that tho Bank of' England, which had been under the necessity of maintaining a 5 per cent, rate uniformly since 17th October last, was able to see its. way, on 17th April last, to reduce its rate to 4-J per cent. It is, as many of you no doubt know, a financial axiom that tho price of investment stocks rises as trade prosperity declines. The converse of this is,"or course, equally axiomatic, and m a period of intense industrial activity, such as that through which we hare been, and are at present, passing, heavy depreciation in investment stocks was inevitable. Tho ''slump" in prices that has taken place has not been peculiar to British securities. Those of other countries have depreciated in an equal, and in some cases oy'on a slightly greater degree. For example, during 1912 ' . German 3 per cents fluctuated from ... 82 to 75 Prussian 3-J- per cents... 92 to 86 French Rentes 3 per cents 95* to 88$ Austrian 4 per cents ... 98 to 88 Russian 5 per cents ... 106£ to 10(1 British Consols, 2i per cents " 79 346 to 724 It will "be seen from these figures that the margin of variation in each case is very noarly the same, showing that the movement has been general. It has extended to stocks and bonds of all descriptions, and the aggregate of the depreciation represents a hugo sum. Still, it is erroneous to treat the depreciation as a loss. It is not a loss except to thoso whose circumstances necessitate realisation at this unfavourable juncture. The yield upon the investment, while held, remains the same, and, peace being assured, and trade conditions becoming less active, tho market price will almost certainly again advance. As far as this bank is concerned, full appropriation for the deficiency disclosed by the market quota lion of all our London investments has been made. We do not, however, look upon tho appropriation as lost money, butmerely as funds held in reserve. Our investments in securities of the character referred to arc mostly of a permanent nature, and we believe that, when financial and political conditions change for tho better, there will be a recovery iv prices. Leading financial authorities at Homo entertain decidedly sanguine opinions in. l-egard to the prospects of a'substantial future recovery.

With regard more particularly to British Consols, which wero the subject of some discussion at the last half-yearly general meeting, it will probably interest some of you. and reassure others, to know that a hopeful feeling prevails. In a recent article in a leading London financial paper, which is a recognised authority in such matters, tho writer advocates the superiority of Consols over tho securities of any other European State, and closes his arguments with the following observation: "Great Britain is Iho only Great .Power that is paying its way to-day; the only Power which is redeeming debt out of revenue instead of meeting j expenditure out of loans. So long as that remains true, Consols-—other things being equal—must have a greater recuperative power than tho securi- | ties,of other Governments." Tho yoar has naturally been a most ! unfavourable one for the flotation of | public bodies' Joans. Many local j authorities have Been holding .off the market in the hope that an intprove!.ment in conditions, would enable them, before long, to place their issues at tho low rates previously obtainable. They have, however, so far been disappointed, and while we. have, since the beginning of the year, successfully placed a few loans on behalf of leading public bodies, the rate of interest they have had to pay has been higher than, in ordinary eircum stances, would have sufficed to attract all the funds they required. Tho loans handled by us have been as follows:— Auckland Harbour Board £250,000 at 5 per cent. Issue price, par. . Auckland City Council £100,000 at 4.J per cent. Issue price, par. Auckland and Suburban Drainage Board . £100.000 at' 4.} per cent. Issue price. £99. Auckland City Council £150,000 at 4J per cent. Issue price, par.

The rates and terms of -issue 'compare favourably with those accepted. by municipalities irt other parts of the world who have simultaneously appealed to the London market 'for funds on lengthened loan. There id' no prospect of an early improvement in the attitude of the London market towards loans of public bodies. There is reason to fear that lenders, in sympathy with the persistent demand and tho prices which leading borrowers aro prepared to pay for accommodation, havo adjusted their rates at a permanently .higher leyol. Early in tho year tho New Zealand Government concluded arrangements in London for the issue of a £3,000,000 4 per cent, loan of 30 to 50 years currency.* Tho issue was made in February ' last, and although, in consoquenco of its having struck an unfavourable market, tho underwriters were loaded with a consklcrablo percentage of their commitment, we understand that in less than two months tho whole amount had been absorbed by bona fido investors. This speaks well for the good reputation which the Dominion's securities enjoy in the London market.

The State Governments of the Australian Common wealth, in their own loan issues, have fared no better than oursolvoH: The underwriters of the West Australian loan tvt £2,000,000, issued about tho niiddl'-i of April last, had to tako up 87 per cent, of the amount. . jjuving the first quarter of thisj rear, Australasia obtained in London 3810,235,000, as against £1,642,800 in tho corresponding quarter of 1912, and £598 000 in 1911. Considerable difficulty has been experienced in raising tho money, notwithstanding the higher rates of interest offered, and in most cases the underwriters have had to find tho bulk of the mony. Tho severe monetary conditions in London havo been reflected throughout tho world, as I have already pointed out, and if money is clear in New Zealand, it is dear also everywhere else. It is safe to predict that, whilo existing conditions continue, Australasia's applications for loans in London will need to l>3 upon a more favourable basis of the purchaser thaif was the ease a few years ago. This should servo to "point a moral and adorn a tale." It indicates p.rotty clearly the wisdom of tho governments of these lands initiating a moro self-reliant policy in matters of finance, undertaking only such development work as is distinctly remunerative, and appealing to tho London market for the present as little as possible

The activity in British trade and commerce, to which 1 have referred, is reflected in the prices of our produce. Practically all New Zealand products aro selling at high prices, and it is to bo feared that importers havo based their idea;-; of requirements on these high export values. It must not be overlooked that the cost of production, the cost of transport, and tho cost of marketing have all increased, and while higher prices'*.! re being obtained for our produce, .tho net return does not showany material addition to the purchasing power of the community. The ralue of tho exports from and imports into New Zealand for the past eight years to 31st March ,1913, are instructive. Tho tigurrea (which are exclusiveof specie in every ease) are as under:—

Tho imports for 1913 show an increase of £3,535,867 over thoso for 1910. That >'s the expansion in three .years. Comparing the exports fur the same period, there is an increase of only £1,175,878.

It must be, admitted that tho Dominion i<? bearing tho strain of dear money better than many people auticipat'Ofl. The State finances exhibit' a heafchy condition. The Min^stor- of Finance-' is. nblo to show & surplus of about £700,000, which is practically tho amount of tho increase shown by the ordinary revenuo. Domestic trade, is not so active as ifc was a year ago, but still it cannot bo described as duli. With prudemeo, care- and economy on tiKj part of tho people, we shall weather tho ptre&ent financial stress without serious consequences.

Settlement and development are proceeding .on satisfactory lines. Quite a large number of estates have been aeqtuied for close settlement. According to official figures, the estates purchased during the financial year ended 31st Maich, 191.3, comprised 50,819 acres, distributed as follows :— llawke's Biy ' 26,447 acres Canterbury 22,572 " Otago ' 1,800 " 50,819 acres Since the close' of the financial yearthat is, in April and May—a further 119,847 acres freehold and 90,780 acres leasehold have been acquired. The division of largo estates for close settlement must bring about—indeed, has already brought about—-some changes in the pastoral industry. The tendency is now. towards the production of butter and and tho development of the dairy industry is a striking feature of New Zealand farming. -So long as-the present high prices rulo, the industry will he.popular, and we may j be- euro that.most of the estates that are acquired for close settlement will i eventually lie helping to expand the output of the dairy industry. The result nust be inevitably to retard the .growth of sheep farming. Consequently, it would appear that, notwithstanding the broaking-in of new lands in'tho future, it is unlikely that our maximum sheep-carrying rapacity will exceed 25,000,000 head. This roughly, would enable as to produce unnua.ly about 500,000 hales of wool and provide about 6,000,000 carcases "I' mutton and lamb for export.

Closer settlement is also helping to develop the fruit industry. Although tliis industry is still very much in ■ its infancy, giant strides have bwn iiuklo during the past lour or five yoar*s, thanks to tho zeal of t.ho Government Departmental exports. The industry is being dovelop-^d on s<:icntifi<; iiiw.'S, and I am optimistic enough to brlk'vo that Now Zealand will, in tho near future, take a very prominent placo as en exporter «f apples and other fruits. According to ligujes that I have been ahlts to obtain from official sources, it i& ostimated that Lbero arc at prevent about 36,(HXJ acres undor oijcluird/ Tlw prico of land for apple growing, before planting, varies from £5 to £100 por acre, .according to district. Areas of very suitable land arc readily obtainable at £20 pei* aero. The. avonq^o price -of land, with trees in full beii.ring, is from £130 .to-.£-200 .per ■acre. During the season, of 1912, Now Zealand exported between. 16,000 and 17,000' cases of apples, and tho ]iricc3 realised in London rang-rd from O.s to 18s per ta'vß. Tho charges nro estimates at os C>d per case, and it is claimtd that l/ho not icturn tf> tho "rower of oven Id pc-T lb. rj;i\-Ps a satisfactory pro-fit. Jt is oxpeclod that about 30,000 cases this season will leave New Zealand for HntiLli America alone, and there &n\ other ju:irkcts ro bo exploited.

Tho ponding a Hera lion of the American tariff, involving as it docs lowor'duties on some of our principal products—notably wool, will almost certainly havo a hardening infliioxico on prices—to what extent ii is oi' course impossible at present to say, the Tariff not being, as yet fixed.

Another approaching event which has -in it the. seeds of great possibilities.', is the nearing completion and opening to commerce of the Panama Canal. What its effect will be on tho trade of this Dominion I cannot at present pretend to say. Owing to the acsence of trustworthy /information1 and reliable data, no one can in, the meantime gauge the prospects or the possibilities of th<? trade which the oompletion of tho Canal may open tip, with North and South America, but I firmly believe that the establishment of this new trado route, will ultimately prove distinctly beneficial to this country.

beneficial to this country

Viewing the position as a whole, and notwithstanding tho temporary inconvenience of dear money, I «m of opinion that the prospects before New Zealand are bright and promising, given moro workers and tower shirkers, a respite from labour disturbances, and ct sensible and reasonable co-operation of labour and capital, I can see nothing to "hinder her continued' progress- and prosperity. The report then came up for discussion and Mr. Kennedy said that ho seconded its adoption pro forma, because the chairman said the business should be limited to the general business specified. Ha wished tho meeting to bo adjourned till .to-morrow, H® did not ebjoct to the Government being represented on the' board, but he wanted an assurance, that the gentlemen representing the Government would exercise their own opinion, and not bo merely the mouth-pieca of the Minister. The shareholders wanted the control of the bank for the shares aven to. the Government in 1903 in recognition of its services to the bank did not entitle it yet to any more shares. He could not see how the Government directors could act independently of the Minister. \Vliat was to prevent anyone challenging -a Minister, on the bench of mis-using the bank? Who could refuto it? Therefore ho wanted, in tho interests of the public, as well as the shareholders, a, complete changes in the constitution of the directorate.

Mr. Skerrett asked if ho could more a resolution of which he had already given notice.

Tho chairman replied that a, meeting of ordinary shareholders had. been called for July 4, when tho shareholders would have a full opportunity to discuss the question.

Mr. Skorrett declared that the shareholders would appreciate the true position which the directors took in regard to them. It was tantamount to this: the directors need not consult the •shareholders on any question affecting the policy of the bank.

The. chairman ruled th© discussion out of order.

Mr. Skerrett submitted,to the decision, but in the course of a further speech, said the bank had reached a stage when it was clear from the balanco sheets that it was in a position to pay off tho million debt guaranteed by the Government. , Ho declared that at this stage these questions arose: (1) Whether it wag not clear that a new condition of things had arisen which made absolutely necessary a readjustment and review of tho relations of tho bunk to the Government; (.2) whether on that readjustment the.. Government was entitled to a, further interest in the capital of the bank, despite the position and honourable arrangement made in 1903; (3) the question of an increase of the capital.

The chairman acknowledged tfor.t the board had received from the shareholders Air C. P. Skerrett's notice of cortain resolutions he proposed to move at the meeting. "The resolutions," said Mr. .Beauchanip, ''affect a, capital question which sm I stated in my opening remarkr.^may be brought up i'ordiecussion at a mooting which lias, been called by thtj shareholders for the 4th July, i may explain that the-' board was requested by representative' shareholders to convene a special meeting for the purpose, but, being advised by the bunk's solicitors that the shareholders had- no- power to increase the bunk's capita] without legislation authority, and that any resolutions affecting tbo bank's capital it proposed and passed would bo void, the board felt itself unable to call a- meeting for thy purpose mentioned. Certain of the shareholder them, acting under the powers contained in the deed of settlement, them solves convened a meeting for the 4th July. In connection with that -meeting- the board has. no responsibility. Tho. present meeting, however, >is the ordinary r general meeting under "the deed of settlement;-at which your directors meet you to give an account of their stewardship. It is our duty iv «ec business transacted ■sucili-'a« is within legal authority, for the reasons sot"out in the opinion of the bank's solicitor, which is available foj- perusal by the shareholders. . Wo sire advised that-these proposed, resolutions are ultra v ires, and that we eanuot countenance them being put to the present- meeting. I accordingly now announce the liK'ting ended."

Mr. Skorrett said tho attitude of the chairman to the shareholders was tf> hi' regi'etU'd as it made them mnj-o ciphers t'.> c!)?isider only matters put before them when cut and dried. Mr. Martin Kennedy moved: "That this ordinary mc;M.iiig hn adjourned until ?» o'clock to-morrow."

.MY:"" William Watson seconded tho motion, but tho chairman said ho wa.« sorry that ho cnuld not accept it as

the 'business <?■'.' tho meeting had terminated. Hv then left the chair.

Mr Kennedy was then voted to tho chair by tho .shareholders who remained. The diainiiau s:;id that the diureholder* having voted Mr. Beauchamp £500 for his poisonal expent-as when ho recently wont Uomo deserved better treatment.

Mr. Juuuiehamp, having left tiic chair, urnl hn'm-x ;:bo.nfc to leave tho moating,' ro-U>rtW* that this _ aetio_n of tho fibarohoiders iniiuouced him neither one u;iv nor t!i<; oilier. Tho bank stood firm all the time.. "I toll-you," h-e added, "that tooo vot: d to mo is not sufficient to 'jiibo mo. Voa cannot buy m:> with. £500, or '£5,000." Mt. 'BoaiK'-hainp thun i<>.ft the room, and the mooting unanimously decided to meet

a grim to-morrow. _ "Tli« log-ul. opiuio!) r»t rorr-ccl to hold "that as tho sbarcholclorß have not. hud a- notice that the matters set out in Mr. Slwri^tt's resolutions ore to bo brought boloro tho mooting on. 26th. any k'Holutiun ii' passed will bo invalid, and it is tIK-roi'oro the duty of the chairman to xehisi* to put them to the mcetin-j;. Wo h;iv<* boen finable to dwcovcr iji tho dcod of settlement any power in tho meeting of the proprievbors to puss tiieso resolutions.' Tlio- ptoroholderK hi^v<i do power to intoH'ero vviUi tho management of tlw busing confvrriid upon tho board by c'-auso -3. It will bt> nocr.BWirv for the board, or tho sbarr.lioldres, if they desire to' carry out;tli<! pui-po,so intended by Mr. Blram>U to convene a special; p'imcral meeting ol' proprietors under cla-itscs -79 »nd"8o ot' the deed of &t?t-| tlomont." i

31st March 1906 1907 190S 1909 1910 1911 1912 1913 £ £ 16,247,212 12,667,902 19,434,658 14,717,298 17,863,842 17,466,421 16,767,818 16,313:759 21,467,387 14,773;821 21,497,187 17,385,066 19,003,851 19,774,517 22,643.265 21,309,683