BANK OF NEW ZEALAND.

Taranaki Herald, Volume LXIII, Issue 144709, 18 June 1915, Page 5

BANK OF NEW ZEALAND.

ANNUAL MEETING OF PROPRIETORS. The ordinary general meeting of the proprietors of tho Bank of New Zealand w*it> held at the Head Office on Friday, June 18, 1915. Mr. H. Beauchamp, Chairman of Directors, presided. With the consent of the meeting the report of the directors and tho balancesheet were taken as read. The Chairman, in moving their adoption. said: Tho momentous events of July and August last, involving tho British nation in the great European conflict which is now raging, and tho consequent unprecedented conditions under which tho finances, trade, and commerce of the Empire have been conducted—--1 and to which I shall refer more fully | later—will, no doubt., have made tho S hank’s operations for tho year of more ‘ than usual interest to shareholders. It ! will have been with satisfaction, thoro--1 fore, that you have perused the dirco- ; tors’ report and balance-sheet which i wore distributed sonic days ago, and j from which you would see time the j board, after making xn-oviHon for all j bad and doubtful debts, depreciation * of investments, and other appropriaI tions, was able to recommend a distrij bufcion. to shareholders on the same ■ scale as in recent years. * In accordance with our usual custom, j I will refer briefly to tho principal items I in the balance-sheet, 1 j CAPITAL. The capital of the bank as at March I 31 was as follows: { Authorised. j £ £ i 4 per cent. Guaranteed Stock ... 1,000,000 “A” Preference Shares 500,000 “B” Preference Shares 1,000,000 Ordinary Shares... 3,000,000 £5,500,000 Issued and Paid-up. Issued. Paid-up. £ £ 4 pers cent. Guaranteed Stock ... 528,988 528,988 “A” Preference Shares 500,000 500,000 “B" Preference | Shares 250,000 250,000 Ordinary Shares (old issue) -1,000,000 500,000 Ordinary Shares (new issue) 500,000 475,710 £2,778,088 £2,254,698 At our December meeting I mentioned that tho 559 shares unapplied for of the issue of 75,000 now ordinaxy shares were being offered to share-1 holders for sale by tender. Applications were received aggregating 10,794 shares, the average price tendered being £l3 3s 9d per share. Tho 559 shares were allotted to the highest tenderers, at an averago price of £ls 10s 6d per share. With regard to tho guaranteed stock, this, you will note, appears at £528.988, as against £1,000,000 in tho previous balance-sheet. The old stock matured on July 19 last, and, tho bank’s finances being in a strong position, tho board decided not to 'underwrite the new issue, but to give existing holders tho option of exchanging their stock. The amount shown in the balancesheet represents the extent to which holders have availed of the option. The balance of the old issue, with the exception of a few thousands that have not yet come in, has been paid off. At a suitable juncture the bank will make, arrangements to issue the balance of the new stock; hut in the present unfavourable state of the London money market nothing can be done. and. the bank’s finances being easy, we arc able, without inconvenience, to await the arrival of a favourable oppoi-tunity. THE RESERVE FUND. Last year this fund was increased to £1,550.000 by the transfer from profits of £175,000. I have pleasure in announcing that this year, by tho addition of tho premium received on new shares (less expenses of issue), £355,533, and the transfer from profits which tho hoax'd nropose-s to make. £84,404, our reserve" fund will stand at tho substaxxtial figure of £2,000,000. Of this amount £1,030,000 is invested in British Government securities. NOTES IN CIRCULATION (£1.676.051) are more by £686,169 than at March 31, 1914. This large increase is due to bank notes having been legal tender since the commencement of the year. Gold has been gradually withdrawn from circulation and notes have replaced it. DEPOSITS, which include free, fixed, and Government deposits, stand at £18,741,657, an increase of £671,044 as compared with the figures of a year ago. Government balances are somewhat less, but deposits from tho public—both free and fixed—are substantially larger. The causes and significance of these movements I shall deal with presently. BILLS PAYABLE AND OTHER LIABILITIES stand at £1,670,103, an incx-caso of

£266 647 on tho figures of twelve months ngo. COIN, BULLION, MONEY AT SHORT CALL, Etc. Coin and rash balances at bankers and bullion together amount to £ L- • 827,522, as against £3,377.185 nt March 01, 391-1. Tho increases in our note circulation and deposits—to which I have just referred—and the general financial unrest vender prudent the maintenance of larger gold reserves. Money at short call. Government se- ! curitics. and other securities in London together amount to £5.136.996. an increase of £60.218 ns compared with twelve months ago. Tho totals under this heading, together with tho amount of bills receivable and investments in the colonies, are, I may mention, equal to 61.41 per 1 cent, for 12s lOd in the ■£') of the total I liabilities of the bank to the public. You will bo pleased to hear that full I provision lias been made for all dopro--1 ciation in investments, tho whole of I our investment .securities having born ! written down to tho minimum Stock ! Exchange official quotation at March ; 31 last. | BILLS RECEIVABLE, ! in London and in transit, exhibit an I increase of £l3< .220 as compared with I the figures a vear ago, and now stand i nt £3,301.301. • I-may say here that ample provision ! lias been made for any deficiency in reI spect of bills held, drawn upon hanks. I merchants, and others in belligerent j States, and which, owing to the war. ! were not provided for when due. The | aggregate of these, you will ho glad , to 'hear, is- comparatively inconsiclcv- | able. i ADVANCES. | As compared with tho figures, of a I year ago. bills discounted a tv less by £93,568, and now stand at £1,150,458. i Other advances (£10,662,707) show an ! increase of £582,248 —a natural movement in view of our additional capital resources. LANDED PROPERTY AND PREMISES’. After appropriation from profits, now made, of £50,000. this item stands at £451.867, as 'compared with £449,577 a year ago. The bank’s steady growth entails a considerable annual expenditure in providing suitable premises for the satisfactory conduct of its business. I may mention, with reference to the Wellington and Head Office premises. that the accommodation which j was provided eighteen years ago, when j tho building was erected, is proving i quite inadequate for the* requirements I of our present greatly increased husiJ ness, and the directors have had under I consideration for some time tho quesj tion of enlargement so as to provide the necessary additional facilities, it has been decided to place another story on the building and to enlarge the banking chamber by taking in practically tho whole of' tho space on the I ground floor. This will givo a considerably increased area for the use both of the office staff and tho public, and will, it is expected, meet all requirements for many years to come. PROFIT AND LOSS. Tho not profibs for the year, after paying interest on guaranteed stock and making all necessary appropriations, Bieluding provision for the bank’s annua! grant to tho provident fund as well as a ; bonus to the staff, and tho allocation of £50,000 in reduction of bank premises and furniture accounts, amount to £330.486, as compared with £303,400 at March 31, 1914. Adding tho amount brought forward from lust year (£51,608), and deducting the amount of interim dividend at 0 per cent, paid in December (tDO.Oi/O). the sum awdlnblo for distribution is £270,394. Tho directors now propose to pay a further dividend of 6 per cent, and a bonus of 3 per cent, on ordinary and “B” preference shares (making 15 per cent, for tho year), and a further 4 per cent, on “A” preference shares (making 1.0 per cent, for the year). The distribution to shareholders will therefore amount to £229,459 for the year. Of the balianco remaining, it is proposed to transfer £84,404 to tho Reserve Fund, and to carry forward £57,170. In looking over tho profit and loss statement, it will bo noticed that “Rates and Taxes’* are some £13,090 higher than last year. This increase is very largely due to the increased note tax. consequent upon the temporary expansion of the note circulation. BOARD OF DIRECTORS. To fill the vacancy occasioned by tho death of the Hon. Thomas Fergus, referred to in my last address, the Government have appointed Mr. "William Recce, of Christchurch, a director of the bank. Mr. Recce is, as you are aware, well and favourably known in commercial and financial circles throughout tho Dominion; and he will, I am sure, prove himself a worthy and capable successor to the late Mr. Fergus, i am pleased, cn your behalf, to extend a welcome to him to-day. The term of office of Mr. J. H. Upton and myself expired on March 31, and the Government have renewed our appointments. At the first meeting of the board in April last, my colleagues did mo tho honour of re-electing mo chairman of the board for tho current year. LONDON BOARD. At our last meeting wo expressed our acknowledgement of the services rendered by tho London board in the great crisis of last year. The local directors as well as our chief executive officers

! there, still continue to watch over our London interests with their accustomed care, and with tho usual satisfactory Jesuits. Wo have pleasure in again placing on record our indebtedness to them. STAFF. The numbers of our staff applying for leave of absence, to enable them to join the New Zealand Expeditionary Forces, are largely in excess of which it has been found possible to spare. Tho hank’s business is such thru it cannot be carried on by the employment of . casual hands as required. A certain proportion of the staff-must bo men will) special banking knowledge and experience of our methods of working. We are adjusting the staff as wc have op- . portunity, and are allowing more men to join the ranks of the contingents as they can bo spared. The number of our men who have gone to tho front or arc in training now totals 104. To colonial officers half-pay is being allowed, and they receive in addition their military pay. To the London men wo aro allowing full pay, ns their military pay is on a lower scale. Many of tho London banks aro allowing full pay to those of their staff on active service. To enable us to set free still more men it has now been decided to engage a- limited number of women clerks whose services, it is considered, can be satisfactorily utilised-in certain departments of our work. As these clerks are gradually introduced we shall he able to liberate more men for military serYcni will see therefore that we are doing all in ovr power to encourage those young men of our staff, who aro capable of military service, to take up arms in the Empire’s eau.se. Those iiat offer will. 1 am .'■are, acquit themselves creditably. The names of several at the front aro already inset ihod on the Roll of Honour, having either sustained wounds or lost their lives in tho actions at the Dardanelles. It is hardly necessary that I should add how greatly wo nil admire their patriotic conduct. In common with all New Zealanders, wc aro proud of the soldierly qualities which they and New Zealand's other gallant sons have displayed and are displaying in the struggle with the Turks, and v/e confidently look, before long, for a successful termination of the enterprise in which they aro engaged and to hoar that the flags of the Allies aro floating over Constantinople; and that tho Bosphorus and the Dardanelles have become open waterways. To the families and relatives of our men who have so far met their deaths at the front, wo have to express our deepest regret and to tender our most sincere sympathy. If there be anything which can help to assuage the anguish of their bereavement, it will surely he ‘the solemn pride which must bo theirs to have laid so cosily a sacrifice on the altar of freedom.” Our approbation of those of our staff who have gone to fight the Empire’s battles must, however, not load us to overlook tho moro more prosaic, though none tho less valuable ancl exacting services of the staff who have remained. These have cheerfully performed extra work, foregoing holidays and undertaking longer hours of labour, in order -What those desirous of volunteering might bo ablo to get away. AVo arc appreciative of all this and gladly place 4 our appreciation on record, in many cases, the task of remaining and carrying on the humdrum duties of daily life and labour under such unfavourable conditions, has involved self sacrifice and a devotion to duty almost ns great ns that displayed by those who have gone to the front. Each, in his own way. is {serving tho inti of the community and tho Empire, and each merits and receives our hearty thanks and commendation. In iccognition of the good services of the staff during the year, the hoard has again paid them a bonus of five per cent, on salaries. In this bonus the members of the staff serving with the i British Forces shai od on the ha.-ds of < full pay. | BANK OFFICERS’ PROVIDENT FUND. During the years, steps to extend the benefits derivable by the staff from tho i Officers’ Provident Association have j been taken, and carried to a successful ! conclusion. To secure the additional benefits desired, tho officers have increased their contributions to the fund by If per cent, of their salaries, and the hoard lias increased the bank’s contribution by a further 2 per cent, on salaries. Ibis makes tho staff’s contribution 3} per cent, on salaries, and the bank’s /?. per cent., being, you will observe, just double that of the staff. Tho vote of the staff was overwhelmingly in favour of tho change, and tho pioposal has therefore taken effect as from IT ay 1 ultimo. In view of the splendid position in which the. hank now stands, it can afford to be liberal with the men who havo spent their lives in its service, and to whoso labours and devotion its success has been so largely due. These views will, 1 am sure, have your cordial approval. DEED OF SETTLEMENT. It was our intention to have placed before you at this meeting tho proposed amendments in the Deed of Settlement. I regret that it was not found possible to got nil the necessary preliminaries arranged in time. The proposals have, however, been circulated among the shareholders and a special general meeting has boon called for October 22 next to deal with them. In terms of tho existing Deed of Settlement, tho alterations that are approved of at that meeting will, before they can take effect, have to be submitted and confirmed at a subsequent mooting. This confirmatory meeting, it is proposed, shall be the bank's halfyear general meeting to bo held in December next. Your proxies aro invited for use at both tho meetings, and wc shall bo pleased to receive them in due course. Tho amendments are very necessary and wo shall he glad whoa they have been effected. SAMOA. Of German territory occupied by Great Britain since tho outbreak of war, New Zealand is most interested in Samoa, owing to its proximity to tho Dominion and the fact that it was tho first raptured—and that, too, by a New Zealand Expeditionary Force. German currency in Samoa has been lately superseded by British, and a branch of this bank has been established at Apia, tho principal town of Gorman vSamoa. The future of Samoa will not be determined until tho close of tho war. Meantime the country h being held by New Zealand, on account of tho Iniperial authorities, and is under military control. AVAR AND FINANCE. It is impossible for mo to avoid reference to the great conflict that is now convulsing tho world. The war, in which practically all the Great Powers are engaged, has had, and must continue to havo, a very disturbing influence on finance, trade and commerce. Great and profound economic changes havo occurred, and no one can as yet faintly

estimate the far-reaching effects of tho titanic struggle. Tho measures adopted by the British Government to meet tho financial difficulties precipitated by the war were outlined briefly in my last address. They have proved on the whole effective, and have gone- far to assist in maintaining tho pre-eminence of London as tho world's great financial centre. AA’hilst other countries havo found it necessary to prohibit tho export of gold, Britain has preserved its traditions and maintains! throughout a free gold market, except, of course, for exports to enemy States. The opening of the London Stock Exchange, which took place on'January 4. was attended by the imposition of very stringent conditions, designed to prevent tho Stock Exchange being utilised as a charmed for realisation of enemy securities. Recognising the important part which finance must play in tho war. tho British Government has determined to conrsprve British financial resources to tho utmost extent possible, in order that supplies for war purposes may bo available, as and when required. AVith that end in yiew. it has practically taken control of all new capital issues in Great Britain, by providing that no issue shall be made that has not been .previously approved of by tho British Treasuryr The principle upon which the Treasury will discriminate upon any proposals made to it, will be whether or not the contemplated issue can he shown to he ‘‘advisable in tho national interest.” This regulation, it will bo at once | peon, closes the London money market j io all issues of capital on account of i undertakings unconnected with the Brij iish Empire, and to these even within ' tin- British Empire that aro not in ; doso association with Imperial inter- ! ests. Tho result' is that the vast stream of credit constantly flowing to London : from Britain’s world-wide investments is accumulated there as in a financial reservoir, the outlet of which is controlled by the British Government. In this way* supplies of that essential sinew ’ of war —money—are assured, not only ; for the British Empire itself, but also ! for her allies. j The facility with which all needs I have so far boon fully met, at rates I fluctuating—as far tus the British Gov- | omraont is /concerned —from a little over 3 per cent, to a little under 4 per cent,, Is at once a testimony to tho effectiveness of the measures adopted, and to the continued strength .and soundness of British credit m these creditshaking times. 1 do not wish to be understood as minimising the serious financial and economic bearings of the position in which tho world has been placed by tho wAr. One cannot hut regard with serious misgivings, tho diversions of such immense volumes of capital from remunerative) enterprise to the business of destruction, which leaves only devastation and no tangible asset in its wake. The mind is fairly staggered when it thinks of the economic problems with which tho civilised world will bo faced when this—the greatest of all wars—has been brought to a termination. Tho figures that will bo represented by tho actual war expenditure l , by the loss of income resulting from tho paralisation of industry, and by tho enormous value of properly absolutely destroyed,* arc at present unthinkable; and when wo add to them that greater, because irreparable, loss., net measured in money but in human jives, wo turn from the contemplation of it all with a distracted brain and a.sickening heart. For ns, the only consolation lies in the fan that the conflict has been forced upon us; that we are fighting the fight of liberty and justice, and that with the victory which wo confidently anticipate will be ours, may come an assurance of an oiichirin.g peace which, in the years yet, to he, will perhaps compensate in some measure for the losses and distresses of the present, ! As to the ultimate issue of the eou- ! flici. I do not think there can be any j room for doubt, if the British nation can he brought to realise that tlie greatest crisis in its history lias arrived. At the opening of the war every Britisher faced the position with n confidence. born of past experience, in the 1 conviction that the nation would rise I as one man to meet the emergency. I ! am. however, bound to confess t-o a feeling ot tho keenest disappoimmnot and to some apprehension when I road of the recrudescence of labour troubles in Great Britain at such a critical juncture, and of the consequent threatcued deficiency in the supplies of those munitions of war which arc absolutely indispensable, if our brave soldiers at the front arc to fight their battles successfully. I can conceive of no more despicable conduct, than that which, would leave our armies and navies deficient in the supplies of tho fighting material necosary for their own defence. and for the successful prosecution of the war. I hone that there will ho no further display of such un-Bri-tish conduct, but if there should he, I trust that the most stringent measures wiy bo adopted to compel labour to give tho fnll7 generous and loyal service which tho nation demands, and undoubtedly merits, in tho present time of .stress. In this connection, it is interesting to note the appointment of the Right lion. David Lloyd George as Minister for Munitions of AVar, a portfolio of the British Cabinet which has been created for the express purpose of dealing with tho difficulties to which I havo alluded. The unceasing vigilance of tho British Navy—the effectiveness of whose watch and ward is a matter of pride and satisfaction to the whole British Empire—has afforded protection to tho British Mercantile Marine; and although some losses have, of course, occurred, the total is insignificant when compared with the aggregate sailings. Up to the present the Knipara and the Tokomaru aro the only New Zealand ships that havo been sunk by the enemy. The debt we owe to the sailors of tho British, Australian and Japanese navies can never be repaid. The* British Government, feeling tho importance of confidence as an essential "to the maintenance of trade, announced. in tho early days of the war. the establishment of a Government insurance bureau through which rover for war risk could be obtained, charging for this national .service the lowest possible rates consistent with departmental solvency. This facility hns been of the greatest assistance to shippers to and from all parts of the British Empire. It has enabled them to obtain full cover for all their shipments at reasonable rates. It is questionable whether, without it. underwriters would havo been able to meet tho demands upon them. In any case the rates for war risk would probably havo been almost prohibitive. The bank’s services have been at tho disposal of its shipping customers, and tho # aggregate of war risk cover effected in London tlirough the hank’s agency has reached a largo total. Tho measures which it was found necessary to adopt in this Dominion, viz.: Tho notes legal tender proclamation, tho prohibition of gold export, and the Mortgages Extension Act, are still in operation and likely to be continued until the close of the war at any rate. Tho last-named Act has, unfortu-

i nately, proved somewhat unsatisfactory. Designed primarily for the protection of mortgagors against possibly unjust and arbitrary action by mortgagees, it has no doubt been of much service in preventing hardship to mortgagors, whose liabilities were maturing and who wore unable to make provision for them. It has enabled them to carry on their mortgages at the rate of interest provided in the mortgage deed, and has, in that way, no doubt assisted to keep down the value of money for mortgage purposes, which runs today at from 5J to 6 per cent, per annum. But the Act has been taken advantage of by quite a number of mortgagors who, being in the enjoyment of a low rate of interest, have, whilst possessing the means to discharge their liabilities, claimed the protection of the Act and utilised their available funds in lending on mortgage themselves at higher rates of •interest. This is, of course, a perversion of the benefits conferred by the Act, and it isunderstood that, in the coming Parliamentary session. the matter will receive attention at the hands of tho Government/ "We are not at all sure that tho mortgagors in such cases aro not overreaching themselves, or that those who are bona fide claiming the protection of tho Act aro wise in doing so. There is no reason to anticipate that a substantial drop in .money values will take place after the conclusion of the war. Not a few in a position to judge take the view that there will then bo still further appreciation, and my own opinion is that those- who are re-arranging their mortgage liabilities, as they mature, on the best terms possible, are acting with a measure of prescience which future events will fully justify. The prevailing conditions in rho great monetary centres of tho world are bound to be reflected, sooner or later, in our local market; and, as I see no indication of easing prospects in the centres, I am forced to conclude that money values aro likely,, for the present, to remain comparatively high. It is true that there is not, in the meantime, any shortage of money; hut this is largely owing to the fact that enterprise is stagnant, and that trade generally is running in much restricted channels. When the future is more assured, the supplies of floating capital will probably he quickly absorbed and money may become scarce. Alter tho war is over, if the conditions of the international settlement are such as hold out prospects of a lasting peace, and of cessation of competition in armaments, there may he a tier a few years a permanent drop in money values, but I do not think that point will bo reached for some time. These are, however, merely my personal views and 1 wish it to be understood that I lay no claim to prophetic attributes. In these islands our position is a highly favoured one. The horrors of this war—the most distressing of ail wars—are known ro us practically only through the newspapers. But for the fact that some of the best of ohr manhood has gone forth to do battle for tho Empire, and that the list of our dead and wounded is a long one,- we should he almost unaffected by tho momentous struggle that is in progress on the other side of the world, indeed, it may be truly said that we are actually benefiting by the tragic events that arc being enacted, inasmuch as tho war demands have sent up the prices of our staple products to a level never before touched in recent years. In this connection, it is interesting to nolo tho values which have ruled in the London market for some of our principal products this season, as com- ; pared with the previous year. Take. I lor instance, wool, moat, butter and cheese:— Wool. | Sliped AVe-Dington wools: March, 1911, 13d to lot!; March, 1913, 21d to 24d. Grca.sv merinos CO’s: March. 1914, 12Jd to*l3|d; March, 1913, Ud to 12d. Givasv crossbreds, fine 3ON: March, 10U. ]2kl to 13ld: March, 1913, 17d ! to 1 7 Jd. | Greasy crossbreds, medium 44-46's: 1 March. 191 1. 12d to 12kl; March, 1913. ! 17Id to ISd. ‘ 1 Groasv crossbreds, coarse 3G-40’s; 1 March, 101-1, lid to 11-pl: March. 1913. I 17d to 17 hi. These prices aro for "average” quality, per lb. It will I)o seen, therefore, that the present condition of the market is brought about by the .strong demand for wools suitable for khaki and blanket purposes. Frozen Meat. i I Canterbury lamb, per lh; March.! 1911, Old to 6§d ; March, 1915, 7sd to ! &K I North Island mutton, per lb.; March. 1 1014. 4d to 4?d; March. 1913, did to i 6£d. New Zealand beef, fores, per lb.: j March. 1011, 33d to 4d : March, ,1915, ! 31d to Old. j New Zealand beef, binds, per lb.; i March. 1911, lid to 4\d; .March. 1913, j Old to Gad. ' ‘ I Butter and Cheese. j Butter; March, 1914, 11 Ss to 120 s per cwt.; March, 1915. 136 s to 142 s i per cwt. Cheese: March, 1914, 63s to 66s 6d per cwt.; March. 1913, 91s to 93s per cwt. The market for all dairy produce has since improved. Linked with the patriotic enthusiasm of tho Dominion, those circumstances, which have placed our people in a position to bo liberal, have inspired rich and poor alike to a degree of generosity quite unprecedented, and substantial sums have boon voluntarily subscribed for every conceivable department of relief and assistance. Much yet remains to be done, but we are persuaded tho Now Zealand people will bo truo to their call and do their duty. As far as wo are concerned as a board, we consider that under normal conditions wo are justified in regarding ourselves as your almoners only to a small extent, hut existing circumstances being so exceptional, we have felt constrained to subscribe a total of £3030 direct to the relief funds. AVc have also remitted moneys of various relief organisations to Loudon free of exchange. which service has boon equivalent to a further largo donation, ns exchange in London has commanded a very high premium for many months, and still stands at a high level. This further donation, thus indirectly made, is equivalent to upwards of £’lßoo. When we add to this the half-pay which wo are allowing to all our officers on active service with the forces, and which at present amounts to some £7BOO per annum, it will be seen that wo arc making a large contribution for war and relief purposes. AVc have no doubt, however, that, in the circumstances, our action will receive your hearty endorsement. LOCAL BODIES' LOANS. AVith tho closing of tho London money market, that fertile channel of supply of our local financial requirements has become absolutely sealed. We have consequently no loan flotations to chronicle on this occasion. For the information of those local bodies who may have schemes of expenditure in

. prospect, I may say that, apart from the uncertainty of tho war’s duration, it is, in my opinion, exceedingly unlikely that "the London money market, even after tho termination of hostilities, will become favourable for tho issue of loans for some time. The demand for capital to make good the destruction that has boon wrought by tho war will bo enormous, and the sources of supply wiu to some extent have run dry. It is, therefore, only reasonable to assume that it may he some years before the financial equilibrium is restored and normal conditions again prevail. In any case, when considering tho question of loan flotations borrowers will no doubt have to readjust their ideas as to rates, for when London loans again become possible there is bound to be a great rush for applications, and this naturally will result in lenders demanding higher rales than those which in recent years they have been ready to accept. INDUSTRIAL DISPUTES AND CONCILIATION. Following the outbreak of war. the Acts relating to the Arbitration Court and Conciliation Board were, by mutual consent, suspended so far as the hearing of new disputes was concerned; but at a special sitting of tho Arbitration Court hold in May last the President decided, after hearing lengthy evidence given by the representatives of employers and employees, that the conditions of trade in this Dominion were sufficiently good to warrant the resumption by tile court of its functions. Accordingly. the courts are now again being used for tlie settlement of differences between capital and labour. TRADE. INDUSTRY. AND INTERNAL FINANCE. The New Zealand quarterly average banking statements indicate an easy financial position .in the Dominion. Comparing the figures of March 31 last with those of March 31, 1014, we find the following differences in the aggregate averages of all tin? banks: Deposits. show an increase of £316.020. and non-interest-bearing an increase of £2,482,901—a total of £2,"08.000. Advances. Discounts show a decrease of £382.090 and other advances an increase of £384.324—a net increase of £1034. The improvement during the twelve months in tho position of the public with tho batiks is therefore £2,797,3-56. The Post Office Savings Bank figures show a similar large accretion of funds. The excesses of deposits over withdrawals for the half-year ending March 31. last reached the large total of £1,188,071. Those improvements have been contributed 1o largely by (11 the increased value of our exports, and (2) the reduced value of our imports—the margin between which will probably bo found, when the returns for the year ended March 31 arc complete, to be the highest that has been touched for many years past. For the year ended December 31 last —the latest, date to which complete returns are available —the figures are: £ Exports (excluding specie) 26,253.900 imports (excluding specie) 21.144,200 Surplus exports £5,109,700 Tho surplus for. the previous rear ended December 3L 1913, was £1,156,731. Tno increase m the exports is duo in a largo measure to the enhanced prices commanded by our primary products. The decrease in imports is attributable to several causes: } (1) The caution exercised by mcr- i j chants and importers when ordering ! supplies in the early days of the war.. ] (2) A lessened demand consequent upon the more economical style of living that has been in vogue since the war began. j (3) The impossibility of obtaining | many linos oi merchandise from Ger- j | many and Austria, and the inability of j British manufacturers and exporters to 1 fill orders. | ! (4) Tiie lack of tonnage and the diffi- I 1 cully of shipping owing to congestion [ 1 at the London docks, j The export figures for the quarter ended March 31 are available and amount to £11.205.000. ns against, £9,993.100 for the quarter ended March 31. 1914. The import figures ✓v the I same quarter are, however, nu. complete, hut the Customs revenue for tho quarter is said to amount to only £3,I 165.609. as against £3.423.709 for the i quarter ended March 31. 1914, showing I that there has been a substantial falling j off in importation?. This is. ofacouvse, all in the direction of widening tho | margin between imports and exports, ! thus increasing the credit balance on j [ tho Dominion's trade ay a whole and, I consequently, tho funds available hero. i A statistical comparison of the trade | | of Now Zealand with previous years j ! would be apt ro be misleading, because ' of tho great disturbance caused by the | I war. file difficulty of importing goods j ! and the advances in prices an the one j 1 side, and the high prices for exports ; ; on tho other side, make an examination ! of the position almost impossible, for - I we havo always to bear in mind that j after the war drastic changes will follow. The values of some commodities must necessarily decline, and others ; will probably advance, and a new view must he taken of the situation. ,• Financial case is apparent, hut it is ease which, like the calm before tho 1 storm, may presage strain and stress ; later on! Tho accumulations in tho j hands of the banks are undoubtedly due to apprehension with regard to the future, and a desire on the part of the depositor? to be prepared for possible eventualities. This is clear from the fact that tho increases in deposits are ‘ principally in the non-interest-bearing . class—i.e.. the current accounts. [ This is not an encouraging feature, ’ because it indicates, to some extent, commercial and industrial inactivity. [ Building, except in tho way of Government undertakings, is largely at a standstill, and investors are disinclined ! to enter into commitments. Business on the stock exchanges of the Dominion is also very restricted. 4 At the same time, prices of shares in ’ regular dividend-paying financial and 1 industrial companies stand at a satis- J factory level, and shares are well held, J there being few sellers. At the commencement of the war. a sharp decline in market values occurred, hut as con- ? fideuco i oturned recovery became rapid, 1 and to-dav there are few stocks in . favourite companies which can be pur- } chafed to yield more than 5 to 6 per c cent. ] The export of meat from the Do- * minion, otherwise than lor the British * Government, 5? now prohibited. Early J in tho year tho New Zealand Govern- v ment. acting on behalf of tho Imperial authorities, commandeered the whole of the ment in store and all future surplus for export. The meat is purchased ' on the basis of a fixed tariff which gives reasonably remunerative prices, while, at the same time, it prevents exploita- i lion of the Ininei-inT Government, and s of the British consumer* by speculative buyers. : It seems to me that a similar scheme, ’ controlled by the New Zealand Government and worked probably in co-opera- s tion with the British Government, 1 would be effective to put a stop to ] operations by the American Meat (

i Trust- in this Dominion, should anv dan- , gorously aggressive action hero be at- - tempted By the Trust after the close , of the war. Owing to the serious shortage in the 3 wheat supply of the Dominion, hn- - portations of wheat and flour have been - made from America and Australia, a 3 large part representing purchases made s by tlic Government in the public ini to rest. The Government’s judicious 3 action in this respect undoubtedly has s had the ofl’oet of steadying the market - ami preventing an advance in the price - of ‘“the staff of life” to a figure which 3 would almost certainly have necossi--1 tated reduced consumption. The press sure upon .steamer freight space from s Now York and San Francisco owing to i this and other causes has been so great I that quite a number of sailing vessels s have been recently chartered for the 3 trade. i The conditions of the Dominion staple industries leave little room for complaint. It is true that in some parts serious droughts have prevailed, and that, owing to the commandeering of ships for the transport of troops, there a is temporarily a serious shortage, in. t freight facilities with some possible loss I to farmers, who, having brought their - stock into condition for killing, have t found themselves unable to sell to the i freezers or get their stock killed and t frozen on tlieir own account. On the 3 other hand,' phenomenally good prices. - as j have already shown, have been - ruling for wool, frozen meat, and dairy s produce, and the better prices bavo r iu - most cases more than compensated for - the reduced yields. i As a consequence of the deficiency of - freezing and storage facilities, movements have been initiated at various j points throughout the Dominion to ! establish new freezing works and re- ' frigerating stores. In considering all ! such project?} it should of course not 3 !be overlooked that the present is a time 7 Iwhen exceptional and abnormal condi- • j lions prevail, and that, in ordinary cirb ! cumstances, the existing facilities for I ; dealing with the frozen products of the - 1 country are probably, in most cases. ■j quite adequate. It will therefore be 3 j politic that the promoters of such - 1 schemes should consider carefully whe- - ; ther or not there is a permanent openiing for the establishment which they • I have in contemplation. If what they s [have in view is designed simply to meet )-tho present temporary necessity, wisdom would, I shotild say, dictate the x abandonment of the proposed venture. ! THE OUTLOOK. I think we may look for a continu- • ance of good trade. The end of the i war may be followed by heavy taxation : and unemployment in those countries now engaged in hostilities, but New • Zealand is still bound to find an outlet I at remunerative prices in Great Bri- • the Continent of Europe, and . the United States of America for her , wool, frozen meat, dairy produce, etc. . It would of course be unreasonable to • expect the abnormal rates at present ■ i ruling for the articles enumerated, but there is little doubt that the demand . which will then exist for our primary • products will enable us to face the future with equanimity, and assist us in discharging the heavy liabilities we have dircctly*"undertaken in connection with the war The war is costing the Government a substantial sum, and I am convinced that prudence and reasonable economy arc being' exercised in. the expenditure. The cost of the wav must bo met by increased taxation, and no doubt we may 1 expect, to have proposal submitted under this head in the course of a few days. The country is well able to face jthis increased taxation; indeed, looking | at all the circumstances, it was never [better fitted to stand such a pressure, j As 1 have already mentioned, the commandeering of so many of our insulated steamers for troopships has | hampered exporters considerably, and | lias caused some inconvenience; but the I Government-is making every effort to provide a sufficiency of insulated ships, and it is anticipated that the difficulty will be overcome by the end of July. I Some change in the incidence of | trade is certain to follow the old comf mercial relations occasioned by the war, and new trade routes are already being pricked out on the map. Germany, for long years to come, will, I hope, be commercially ostracised. The trend of public feeling the world over seems to point' in that direction. New outside markets will therefore have to be exploited, and fresh industries within the Empire itself established and developed. Japan is already in the field, and quite recently a distinguished deputation visited the Dominion with a view to opening up fuller trade relations be- ] tween the two countries. There is a possibility of an early inauguration of I a direct steamer service with Japan. 1 Already the trade of Australia and ;New Zealand with the United States . |of America and Canada has taken a forward bound, largely encouraged by the opening up of the Panama Canal, j Large shipments of wool and concen- • times have been made from New Zea[land and Australia to Boston and other ’ American ports. Wellington, will be a | frequent port of call—for coaling and 'other purposes—on this new trade route. The trade with the United States is bound to develop, and it is the duty of our merchants to help in * the development, at the same time taking care that the pernicious American system of combines and monopolies is not allowed to obtain a footing. Trade iv/ith Canada, too, is destined to grow, 1 and it is not unlikely that closer political relations will be established with [the sister Dominion after the close of the war. China and Russia are, commercially speaking, lands almost unknown .to tJic.se islands, but it is fairly certain that they will not long remain so; and when w? come to reflect upon their immense populations and their boundless resources, the trade possibilities opened up appear to be illimitable. It is noteworthy that the wars of tho early part of the nineteenth century laid the foundations of the peace upon which the phenomenal social and industrial developments of the later part of that century were based, and now, in this twentieth century, history may repeat itself; and when tho knell of militarism has been sounded, and the nations have turned their energies again to the arts of peace, developments as yet undreamt of may take place. The next hundred years may witness the attainment of stages of further progress in arts, sciences, industries, social conditions and international relationships which shall outstrip even the nineteenth century record, and present contrasts with existing conditions more remarkable and important than those of any of the centuries of the past.