The Daily News MONDAY, JUNE 22, 1925. BANK OF NEW ZEALAND.

Taranaki Daily News, 22 June 1925, Page 6

The Daily News MONDAY, JUNE 22, 1925. BANK OF NEW ZEALAND.

The annual address of the ehairman of directors of the Bank of New Zealand invariably evokes widespread interest, because its scope reaches far beyond the actual financial position of the bank, and embraces practically' all activities connected with the progress and prosperity of the Dominion, being regarded as a financial barometer that not only registers the swing of the pendulum during the past year, but gives some indication of what may be expected in the current period. So far as the bank’s operations for 192-1-25 are concerned, apart from the year’s profit amounting to £840,485, satisfaction must be felt at the fact tliat deposits exceeded the advances by a larger amount than was the case in the previous year. From this it is clear that the prosperity of the Dominion is advancing, a result that receives emphasis from the fact that although it might have been expected that the causes which brought about the increase in deposits would have led to a shrinkage in advances, yet the actual result disclosed a slightly higher level of advances than in the preceding year. As is well known, it is by making advances that the bank earns the greater part of its profit, hence as the bank had an additional capital of a million and a-quarter sterling to work upon last year, there was ample room for a material increase of advances at rates favourable to the shareholders of the institution. Possibly the very strict watch tnat is kept on the class of security offered, and the caution always displayed when making advances, business in this direction has been restricted in order to' obtain absolute safety. It seems wonderful that, at the elose of the last financial year, the bank should hold deposits totalling thirty millions sterling, and though that total is less than in the preceding period, it is significant that the deposits made by the public showed a satisfactory increase. There can be no question but that this gratifying result bears eloquent testimony to the financial strength of the country. The bank’s capital is now over five and a-half millions, the deposits over thirty millions, and if "to these items there be' added the reserve fund and the notes in circulation, the money available for working totals about fortytwo millions, besides over half-a-million brought down from the previous year. It is satisfactory to note that the liquid assets exceed the note issue by aboiit three millions, apart from other securities that can be speedily realised should occasion require. The reference made in the address as to Great Britain’s return to the gold standard, and the adoption of a similar course by the Dominions, presents no new features as to this long-de-ferred move, flow necessary the change was can be gleaned from the fact that the immediate result took the form of a fall in the rate for buying bills on London, on demand, of twenty-five shillings per cent, (from 55s to 30s), while the selling demand drafts on Australia fell from fifty shillings per cent, to seven shillings and sixpence. Some skill was manifested by the author of the address in the reference to the very heavy toll taken by the banks on the Dominion’s exporters. It is stated that circumstances had "created an unusual tax upon the exporters of New Zealand produce, and it must be satisfactory to those interested in our export trade that the buying rate of exchange has now changed so greatly in their favour.’’ As it is the banks who will lose, the benefit of a tax, the least said about it the better; the exporters may be thankful for the reduced rates, but they can hardly be expected to be grateful therefor. The references made to the question Of preference are thoroughly sound and deserve serious attention. It is, as stated in the address, of vital importance for the welfare of the Dominions that tariffs should be so framed that, while giving our local industries a fair measure of protection, they .should not bear unduly on the commercial activities of the United Kingdom, for it must never be forgotten that, if we are to hold and increase our exports to Britain, we must on our part take British goods in exchange. That point has been emphasised on more than one occasion, and the sooner its import is fully recognised the better it will be for both parties. There are other matters of interest in the address, to which we may refer later on.