THE.BANK OF NEW ZEALAND.

Taranaki Herald, Volume LXIII, Issue 144853, 3 December 1915, Page 5

THE.BANK OF NEW ZEALAND.

CHAIRMAN’S ADDRESS. AT THE HALF-YEARLY MEETING. Following is the report of proceedings at.the half-year general meeting, held to-day, at the head office of the bank. Lambton Quay, Wellington, Mr. Harold Beauchamp, chairman of ciuectora, presiding:— The Chairman said: ■As this is our half-year general meeting, we have no accounts to review. The business is as usual (1) To elect a proprietor as one of your representatives on the Board of Directors. (2) To declare an interim dividend, and in addition, as peculiar to this occasion : (.31 To confirm the passed at uie spec.ai meeting held ou October -2 etiecung alterations in tile Bank's lleea oi fcettlemenc. ' ■ Before proceeding to deal with these formal maac-rs, i propose, a* usual, to make a re-.y observations wan regard to existing conditions—liiiunciai. industrial, and otncrwise. Evoryuimg conuiiues to bo dwarfed and ovoismiaoweu oy the great r,urupean couhict wiucu is .sun in progress, and wincn day oy day uccomcs more and more acute. All the circumstances seem now to point to the conclusion tiiat tlio war is to be a war ot exnaustion, and mac victory ultimately will be on me stue of the combination possessing the greater capacity tor endurance. The imaacial might of Britain has been a theme of constant encouragement and confidence wucu we have speculated upon the final issue of the war.

Most of- ns recognise that, in a test of endurance, t-iie side which controls the longest purse is in a position of immense superiority. But we must not close our eyes to the fact that a measure of advantage will also lie on the side which, by rigid economy and caution in both private and public expenditure, maintains itself in a position to support its people and prosecute the war at a substantially lower cost than its enemies. The aplicatiou of the old adage, “a penny saved. is a penny gained,” becomes at once apparent, and it is quite possible by tho exercise of extreme care in the private and national outlay, that our enemies may in great measure counterbalance tho superiority we possess in the way of more ample financial; resources. In this respect, Germany, particularly, bon gro mal gr£‘, has been forced to ’economise through tho. effective blockade of her ports by our navy. While oui enemies themselves have admitted the serious handicap under which they labour—that is, viewing their position from the financial standpoint—and while we freely recognise Britain’s pre-eminence and financial resources, it will nevertheless bo prudent that each constituent part of the Empire should take stock of the position, far it is to be feared that an overweening confidence in cur financial supremacy may encourage, nay, is encouraging, a . recklessness and prodigality in expenditure which may, if not checked, expose*the Allies to a risk of that first exhaustion which is to bo tho determining factor in the struggle. I hope 1 shall not be classed as pessimistic or unpatriotic, for I assure you I am neither tho one nor the other; but I am persuaded that, at the? present juncture, the greatest optimist and the truest patriot is one who proclaims, in no uncertain tones, tho supreme importance of the utmost care m the conservation of the national resources.

Unless the source of supply bo limitless, it is plain that it is only a question of time, and of rate of outlay, when the end of even the most ample resources must bo reached. This obvious fact is tho one which, at - the present time, the British Empire stands most in need of realising. Owing to tho segregation of tho Allies, and tho distances which separate tho component parts of our own fai*flung Empire, the cost of marshalling tho Allies’ forces, and-placing them at the points where they aro required to engage in. hostilities, is in itself enormous. This is an expense from which our enemies aro almost entirely free. The contiguity and compactness of their territorics ; and the completeness of them strategic lines of railways, enable them to move their forces in largo numbers with groat facility and at a minimum of' expense. Therein our enemies have a decided advantage over us. But these.are not.the only advantages they enjoy, for have to admit that our entire ontlay is on a vastly more costly scale than theirs. Our soldiers arc better paid, better clothed, better fed, and better oared for. This superiority of conditions, though most commendable, is purchased at a very great price. Again, instead of being, as our enemies largely are, self-contain-ed and self-dependent, producing within our own borders the greater part of what we require for our support and for the prosecution of the war, and discharging our internal obligations by means of paper currency, we are drawing supplies, civil and military,, from almost every quarter of the globe, and paying our debts in coin. This, of course, involves us in enormous additional expense, for the price demanded by the foreign manufacturer or producer has to bo paid in gold, and transit charges added. Generally, therefore, it is a case of making war on a basis that is calculated to strain our financial resources to the uttermost. This cursory review’ of the posiiton will readily convince even the most superficial thinker that tho outgo of tho Allies for war purposes must b© enormously in excess of that of their enemies. It would be well that we should all keep this substantial disadvantage to ourselves prominently; in view, because, if victory is to crown the arms of the side which can the longer endure the process of exhaustion, it is obviously desirable that we, who, in the matter of expenditure, are so unfavourably placed as compared with our enemies, should economise and husband our resources in ©very possible direction. Our foes are, I am sure, keenly alive to this, and they are consequently wielding the economic weapon with the same-skill and intensity of purpose as they handle their actual implements of war. They are “living” as well as ‘'fighting” the battle. The civil population, as well as the military, arp performing their own peculiar part-spin-ning out tho thread of the national resources to the last finest strand and to the utmost possible limit. It can only bo by the exercise of an overwhelming determination to continue the struggle to the utmost extent of htunan and economic endurance, that

they have been able to tnus far prolong the conflict. Life in the Austro-German confederate states must, at the present time, bo anything but pleasant. The truth, under such jealously guarded censorship as prevails in Germany, is difficult to get at, but information wliich leaks out from time to time gives a sufficient index to tho true position. The iron ring of the British fleet has closed in upon the enemy’s seas, and his external supplies have dwindled practically to the vanishing point. Having failed on his military fronts and feeling the unsuppottabie pressure of his internal necessities, our foe is now engaged, with tho assistance of Bulgaria, in an endeavour to force a passage through Serbia to Constantinople with the object of opening up a channel of supply through Asia Minor. Tho Allies are evidently alive to this, and are bent upon frustrating his design. Nevertheless, assuming that the effort is, as we hope, doomed-to failure, it has shown that Austro-Germany’s in* ternal national resources are so considerable, and the capacity of her people for endurance and self-sacrifice in what they conceive to be the interests of their Fatherland so great, that it is impossible to predict tho length to which their ingenuity and devotion may enable them to protract hostilities. It behoves us, therefore, to lace our own economic problems in the spirit in which they confront theirs, and to set our own affairs in the. best possible order with the least possible delay - If the resources, or the Empire are to be conserved to the extent necessary to enable them to meet the demands that will in all probability bo made upon them before this war is brought to the conclusion that tho interests of humanity and freedom necessitate, the civil population of the Empire will have to do their part by instituting a regime of much sterner personal economy and a wider range of personal industry than have so far been practised. This point was stressed by the British Prime -Minister in an address at the Guiidhaii.delivered on June 29 last. 1 give you his own words- — “'There remains only one course which can he adopted without adding to tho necessary destruction and dislocation caused by the war. a permanent source cf impoverishment of this country. What is that course? It is one vre have como here to advocate aud to press upon our fellow countrymen—to diminish our expenditure and to increase our savings. I put before you two very simple propositions. 'Tho first is tliis: If you save more you can lend to the State more, and the pation will be proportionately enabled to pay for the wr>r out of its own pocket; and the second proposition, equally simple aud equally true, is this: It you spend less you either reduce the cost and volume of our imports or you leave a larger volume of commodities available for export. Tho state of the trade balance between ourselves and other countries at this moment affords ground, I do not say for anxiety, but for serious thought. If you look at the Beard of Trade returns for the first five months at the end of May of the present year you will find, as compared with the corresponding period of last year, that our imports have ' increased •'by thirty-five and a half | millions, while our exports and re- i exports have decreased by seventy- j three and three-quarter millions. | What does that moan? It- moans a | total addition in five months to our ; .indebtedness to ether countries cf j nearly one hundred and ten millions, i And if that rate was to continue un-j til we reached the end of a completed j year, the indebtedness would nee to } over two hlmdred and sixty'millions. I That is a serious problem, and I want j to ask you and thote outside, how can : that tendency be counteracted ? Tho ; answer is a very simple one—by rednc- f ing all unnecessary expenditure—first ! of imported goods. . , , That would ; mean wo should have to buy less from abroad.”

In the directions mentioned nearly ! everyone can afford help.'and those who | act on the suggestion will be rendering ( to the Empire a service, second only in importance to that given by those who offer themselves for the war and take their places on the battl. field. Hitherto supplies have been largely dra\vn r from outside—particularly from the United States of America—but, ■ while outside supplies .may have been right enough at tne commencement of tho war pending organisation of our own productive capacities, it would be suicidal to go on relying upon them because it is patent that they may, in the event of ’tne-war being much further prolonged, bo closed to us by our inability to pay for what we require. Therefore, we should increasingly make it our aim to produce as far au practicable within the Empire’s own borders all that is necessary to satisfy its needs. y Manv of you will doubtless have noticed in tho Press, within the last few months, references from time to time in regard to the abnormal state of the exchange between Great Britain and the United Slates of America. Some of you, who may have bad business dealings with America, have had tho significance of the of the exchange brought homo to you very forcibly, by your personal experience in discovering that your British pound inis converted into a much smaller number of American dollars than has ever before been the case. At one time the rate foil as low as 4.43 dol. per pound, as against tho par of exchange 4.5G7 dol. This is equivalent to a loss in British money of £7 ISs 4d per cent., so that for every £IOO paid by Great Britain at that .lime for American goods she was receiving goods to the value of only £92 Is Sd. If, therefore, with the exchange market in such a position, she had bought £100,000,000 of American goods, she would haye lost roughly about £8,000,000 through the transaction, in consequence of . the adverse state of thc 4 Exchange. This unfavourable position was created through the necessity that arose for Britain to place such enormous orders for munitions and goods with America. There was no immediate prospect of the huge balance in favour of America being adjusted, either by exports to America (these having shrunken to. small figures since the commencement of the war), or by a settlement in coin, which would have been disadvantageous to both countries, if not altogether impracticable, aud the exchange rate fell persistently until it reached the ruinous level I havo mentioned.

An Anglo-French Commission visited America with a view to discussing remedial measures, and it was finally arranged that Britain and France should raise a joint loan in New York for as large an amount as possible. A billion dollars was talked or in the first place, but the amount was ultimately fixed at 500,000,000 dollars {about £100,000,000 sterling). The issue was made in 5 per cent, notes at £9B, having a currency for five years, with an option of conversion at maturity into 15-25 year 4} per cent, bonds. Tho whole loan was underwritten by a New York syndicate at £96. Tho terms are sufficiently onerous, the cost to tho borrowers being, at..£96, about £5 19s per cent., and at £OB about £5 9s 3d per cent. Tho effect of tho raising of the loan has been to improve tho Exchange rate sqmewhat. It stood on the 20th ultimo at 4.69 J do!., but, unless the Empire can reduce her demands for American supplies by increasing her own internal productiveness, it is almost. certain to.

recede again before long, and the borrowing operation will in that case have to be repeated, probably upon even more disadvantageous terms than those exacted in this instance. .

This contingency will stress what I have already mentioned with regard to tho need for production, within our own borders, of all the essentials of national subsistence and munition supplies. It will further emphasise what I have said upon the subject of economy in individual expenditure, for it is an indisputable fact that every purchase of American goods'by New Zealanders has gone to swell the balance huge indebtedness of London to New York, and helped ,to intensify the exchange difficulty to which 1 have just referred. Britain's outlay connected with the war is, as already, indicated,-of a steadily increasing character. Commencing, at the begiuuing of tho war, with about £750,000 pc rday, it has now, the British Prime Minister informs us, reached the enormous total of £5.000,000 per day, or say £1,825,000,000 per annum. Of this, probably at least £1,500,000,000 per annum will have to be raised by way of loan; and in addition to providing for her own outlay Britain has, to a large extent, to finance the requirements of her Allies both in money aud munitions.

In the early stages of the war, Britain financed by the issue of Treasury Bills by tender at varying rates, but all below 4 per cent. Her first effort to fund her war liabilities was made in November, when the per cent, war loan of £350,000,000 was issued at £95. This was equivalent to a. borrowing at 4 per cent.

The Treasury, shortly after the issue of the loan, discontinued the placing of Treasury Rills hv tender ana adopted the method of issuing them, as applied for. at fixed rates, viz., 22, 3g, and 3iJ for 3, 6. and 9 months’ bills respectively. In Juno Inst the per cent, warlnan (without limit as to amount) was offered at pnr. and cash subscriptions of about £5c0,000.000 were received.

Issues of Treasury Bills continue to bo made, and tho‘rates arc now fixed at o per cent, for nil currencies. In view of the present rate of expenditure. it cannot be long before another War Loan must bo placed on the market, and the increase of tho Treasury Rill rate seems to indicate that when the time arrives at least 5 per cent, interest will have to be offered.

In this connection, it is interesting to note that, just prior to the commencement of the war, the British National Debt amounted to £706,154.110. On March 31. 1915. it stood at £1,161,951,702; and by March 31, 1916, it is estimated tiiat it will have reached the stupendous total of £2,200,000,000. It is sad to think that such vast liabilities should have been incurred in a policv of destruction.

In this Dominion our Government is inflexible in its determination to assist the Motherland to prosecute the war to a successful termination, and. with that end in view, will, if necessary, send every man of military, age and fitness to the front. Recently here, as in the case of Australia, a war census has boon taken, with tho object of ascertaining how many men are still available for this purpose. So far. no difficulty has been experienced, under the voluntary system, in obtaining ample supplies o 1 eligible men to make good the Twastage” that lias occurred since the dispatch of our Main Expeditionary Forces. If, however, later on, there bo any failure to respond to the call to arms, I am satisfied that neither the Commonwealth nor the Dominion Government will hesitate to take such stops as will compel every man, of military age, to perform his duty to tho Empire. As far as our striff, including London, Australia and Fiji, is;concerned, everything possible is being done. Sve have at present 164 men ou military service,, ami 100 who have volunteered and are waiting their turn to be relieved. Thirteen of those gone to the front have lost their lives, and twenty-two have been wounded.. I am sure you will jsin with me in extending our heartfelt sympathy to the relatives of our gallant officers who have fallen in defence of King and country. When all the volunteers havo joined tho forces, our pay-sheet for men on active service will reach something like £20,000 per annum—in itself a verysubstantial contribution to tho war funds. ' ■ f

The Outlook.—Turning now to mat--1 tors of local concern, 1 would remark that prospects continue good for all descriptions of the Dominion’s primary products. A wider market for wool lias been assured by the conditional removal of ihe embargo placed, shortly after the opening of the war, on exports of wool to neutral countries. The export of wool to certain neutral countries can now be arranged upon compliance with such formalities as are deemed necessary for the purposO of assuring that the wool will not reach- the hands of the enemy. The effect of this has been to enlarge the area of competition, and to appreciably stimulate prices, more particularly for the class required by American buyers: that purchased on Bradford account has not advanced to a correspondingly high level. The arrangement, under which the whole of the Dominion's meat export is commandeered by the Government, still continues in operation and, 1 believe, has worked on the whole smoothly and quite satisfactorily. 'iue aggregate payments, mad© by the Imperial Government in this connection and disbursed by the Dominion Government on its account; amount, up to 24th ultimo, to £5,914,624. The pressure on storage space and the shortage of insulated steamers to carry the meat away, which were features of the last season’s export, are not likely to recur this year. Additional storage will bo available in the Dominion—the j result of fresh constructions completed or in progress-—ki addition to which tho prospective supply of carriers is said to bo adequate. An analogous call has also been made upon the cheese product of the country, tho Government having, it is understood. Imperial orders to requisition 15,00 ti tons of cheese, to tho value of about £1,000,000, in all. Exports and Imports.—The trade retnrAe exhibit a marked fluctuation in favour of tho Dominion. For the year ended‘September 30 last,

Together, the figures represent a net improvement during the year in the Dominion's * financial position of. £7,222,060. More than half of the increased value of the exports is due-to the higher values that have boon ruling, and;

the rest represents increase in the quantity exported. These are very satisfactory figures, but the growth, as far as dependent upon increased value, is of course quite abnormal, and due to the, exceptional conditions at present existing, which will undoubtedly pass away upon termination of the war, or shortly thereafter .

It should be hardly necessary for me to utter a word of 1 warning against the assumption of liabilities, dependent for their satisfactory liquidation upon maintenance, for any length of .time, .of tho present high range of prices. It would be folly to assume for one moment that such abnormal prices can continue after the present hug© expenditure of borrowed money incidental to the war comes to an eud. It is almost certain that, immediately the end of the war is reached, prices will‘drop heavily, and the recoil may carry us to a point of depression as abnormal as that of the present inflation. It will bo wise policy on the part of everyone to keep the probability _ of “lean years” to com© steadily in view. Revenu e and Expemlitu re.—The 'revenue of the Dominion is well maintained, and is exceeding the estimate made by the Minister of Finance for Budget purposes, in which the estimated revenue for 1915-1916 was set down at £11,675,264, as against actual revenue for 1914-1915, £12,443,525. The actual revenue for the first seven mouths of tho financial year, i.e., to October 31 last, was £6.099.402. which compares with £6,022,836 for the corresponding period of 1914—a surplus of £76,566. • „ The estimated expenditure for 1910-16 16 is £12,653,242, which leaves a deficiency on estimated revenue of £327.941. . . . . This is without making provision for war pensions, and for interest and sinking fund on war loans. Tho former are estimated at £1,000,000 per annum, and the latter at £700,000 per annum, but the full amount will not fall to be provided during the current fiscal year. in view of the above, additional taxation has of course become necessary. Increases in income-tax, in stamp duties (including a mortgage tax or 5s per cent.), and in a fow lines of Customs and excise, together with an increase in the rates of the Post ‘and Telegraph and -Railway services, have accordingly. been' made, and these it is believed will suffice to cover the extraordinary additional expenditure referred to, being estimated to produce £2,032,600 of extra revenue. Banks’ Taxation.—ln this readjustment of taxation, necessitated by tho financial situation resulting from the war, the banks have, I think, come in for more than their fair share of the additional impost. T‘ may- explain that banks, are assessed for income-tax, not upon their actual earnings, -but upon a hypothetical income based upon a percentage ot their aggregate assets ana liabilities within.’ tJiu uomimoii. ibis percentage was lormeny lbs, but under tne recent nuance Act it nas been increased to <*sa per cent. Our nypotneiical• taxable income lias thereioie, at one stroxe, oeeu aouuied. .but tms is not ah. ibe tax w© nave to pay lias also . been aoublou. it was lormeny is 4d in me i; jit is now ‘JrS oa m tco £. die practical ©uect, tncreior©, ol tueso arrangeuicnws is, you wui see, uiat our incometax nas ocon qiulUrupied, ana tnai wo snail now nave to pay at me rat© of i>s 4d vynore previous*/ we paid oiuy Is 4d.

ixiLnerto our income-tax has amounted to aoout .£itv>uO per, aimum. ; in I future ii>. will ue aoou&.Bttertvb per. annum. Adued to Jana tax ana note tax our total contribution to tn© taxation oi tn© country win roacn probably aoout Bii'UßbV per annum. are not complaining. The bank is doing well and uiereioro, meantime, cbeenuay . snouiaers tne Durqen mid upon it.. But we reel u is an unduiy oppressive burden compared witu tnat iuiU upon others, anu wo tneroloro look lorwarti to tu© time wnen some remit* siou may oe anow atrie. Tiie anomalous position-is that, wtuie it i>urports to oo an ••mcome-tax," it is payable altogether mdepemlently oi our actual income, it is quite conceivabie that* a bunk inigm sustain losses-, wmch ■would leave it practically wiiiiout inconi© lor, some pun-icmur year, out, that would not reiiove.it of haoiiity to pay incometax under tins assessment. . icwed irom that standpoint, i. think :most people will regaro. me oasis oi the tax as mequitaoic. _ ... iiowever, us I have .said, in .existing circumstances, whilst, w© earn wo wm cheerrauy pay; but, under other conditions, w© contend that Buriiament should, ior the purpose of taxation, as- • seas our prolire upon a more liberal and equitable basis. . . The Dominion's Financial Position.— The artmcial prosperity, created here as in the Old Country, by the expenditure incident to the war, continues to be rejected in the banking- returns ot the Dominion, i The returns furnished to uovernment of quarterly average ( banking figures , at September 30 last, compare as foi- ; low’s with those for September 30, Interest bearing deposits; Sept. 30. 1914, £10,828,90i);. .Se]*. -30, 1915, £ll 609,100; increase, £780,200. Noninterest bearing deposits; Seps. 30, 1914, £14,172,600; Sept. 30, 1910, £l7 545.900; increase, ±,s,di,3,iuu. — Totals; Sept. 30, 1914, £25,001,700; Sept. 30, 1915, £29,155,000; increase, £ Discounts; Sept. 30, 1914, £1,7'45,000; Sept. 30, 191.5, £1,357,i00; decreie, £387,300. Other advances: Sept. 30, 1914, £22,717,600;. Sept. 30, 1915 £:2l 091,200; decrease £f 26,400. — Totals; Sept. 30, 1914,.£24.462,600; Sept, 30, 1915, £23,348,900; decrease, £1,113,700 • . , ~, The represents an improvement ot the position between the public and the bants amounting to upwards ot £5,250,000 during rite year. It is safe to say that this is an unprecedented movement in the banking experience ot the Dominion. Never before has the public been in such an easy hnanciat position or in command of such ampje resources. ■ . _ , , The Post Office Savings Bank figures tell the same story. For the year ended September 30 Ikst, the Post OJsco deposits amounted to £12,943,458, and withdrawals to £10,356,9*2, showing an excess of deposits over withdrawals ot £2,586,516. The oxooss in the seoond 'half-year was considerably greater than that in the first, via., First half, ended March 81, 1915, excess £1,188,071 Second half, ended Soptember 30, 1915, excess £1,398,445 Excess for the year £3;556,516 The position in a measure indicates a slackening of industrial enterprise, and a heavy drop in imports—the latter being due to the inability of manufacturers in the United Kingdom to execute orders owing to shortage of labour, and to inadequate transit facilities. It is well, however, that, oar financial situation is ao easy, for it places us in a position to bear “oar share of the war expenditure — local and Imperial—without difficulty.

The abnormal profits that are being made by the producers of this country and others as the result of the war, should be freely placed at the disposal of the Fmpire by subscription to war loans—or otherwise—in order that there may be no lack of financial strength in pressing the war to a triumphant conclusion. There is, lam glad to say, evidence that our people as a whole feel this and act accordingly. The large donations that have been nlade to war and benevolent funds testify' to the public recognition of the obligation, and the recent success of the Government’s local loan of, £2,000,000, which was largely ov-er-snhscfifc.od, furnishes strong additional. testimony. tV o’ subscribed for and obtained a substantial amount of thio loan. "War Funds Contribution.—ln addition to the subscriptions it has already given to the various patriotic funds, the board has carefully debated the question of making a further substantial" contribution to the National War Fund for the relief of Wounded Soldiers and their dependents. We have come to the conclusion that the bank should make some such contribution, but, before actually deciding to do so, we have thought it fitting to refer to the matter at this meeting in order to ascertain whether our proposal is in harmony with your views; The amount we would propose is £IO,OOO and, unless an adverse resolution is proposed at this meeting and commands substantial support from the proprietors, it is oar intention to .vote that amount" as a dona-, tion to the National Fund, provided we are satisfied as to the manner in which the fund is- to be administered. Assuming that no general dissent is expressed, I think it should be clearly understood that, if the necessity exist, the bank will not; hesitate to make a further contribution to the National Fund between this and the date of onr next meeting—the amount of such further contribution to be left in the discretion of the board.

Deed of Settlement.—The special general meeting called for October 22 last, for the purpose of amending the bank’s deed of settlement so as to bring it into conformity with the statutes affecting th* bank, was duly held. There was *a good attendance of shareholders, and the resolution to effect the necessary alterations was passed unanimously. % As the resolution has to be confirmed at our present meeting before it can . become operative, it was not thought. necessary to circulate among shareholders a report'of the proceedings of the special meeting, which were purely 'formal. X may state now, for the purpose of placing the fact on record in this address, which, according to custom, will be circulated among shareholders, - that in response to our request for proxies for-use at the special general meeting, and at this meeting, in carrying the proposed amendments, we hare received proxies from shareholders representing 73,324 shares, which clearly indicates the general proval with which the proposals are viewed by the shareholders. I shall shortly movo the confirmation of the resolution and, in anticipation of its being your pleasure to confirm it accordingly, I may say that thereupon the proposed amendments will take effect.

Board of Directors.—The retiring director on this occasion is; Mr. Martin Kennedy. Mr. Kennedy gave due notice of candidature'for the seat becoming vacant and, as ho is the only candidate, I have pleasure in declaring him duly elected. I take this opportunity to congratulate- him 'Upon: the attainment of his ‘‘majority’’ as, a director of the bank, and . to express to him,'on.your behalf and my own,, the hope that he.may continue in the enjoyment of good health and vigour to serve your interests as , a director of the bank for many years to come. ...

Mr. John. Murray.—Reference has been made at one or two of our past meetings to the services rendered to the bank by Mr. John Murray, a former. inspector and general manager, and subsequently, for a- short time, a director of the bank. I regret to v say that he died on June 30 last. It is fitting that I should mention the fact, and place formally on record our recognition of his abilities and our appreciation of the work ho performed for tho bank. Mr. Murray's distinguished services will never bo forgotten by those connected with this institution.

Interim Dividend.—l* have pleasure .in informing you that the profits for tho half-year ended September 30 last bar© boon quite satisfactory, and the hoard have felt- fully justified in declaring'the usual interim dividend of 6 per cent, on the capital paid up in respect of the preference and ordinary shares. The dividend ’will b*e‘ payable in Wellington to-morrow, 4th instant, and at branches on receipt of x ad vice. Mr. Martin; Kennedy said;—

I thank you very cordially for having rc-elected me unopposed to the seat on. the board which, by effluxion of time, becomes vacant on March 31 next by my retirement. 1 have also to thank you,* Mr. Chairman, very much-for the personal good‘wishes you expressed in announcing .my election to fill, the vacancy.

jCa you are aware) the board Consists of six members, four of whom .are appointed by tho Now Zealand Government as representing the Dominion's interests in the capital of the bank, and two. being elected by the holders of tho ordinary shares in the bank. I may mention that, though tbej-etirement of your representatives takes plact? by rotation on; March 31 in each year, the nominations for election close in July previous. The object of! this.is that, • in tho event of a contest for the seat, there may be time to give notice to distant shareholders, and afford t them tiny opportunity of voting by post in terras of tho regulations. In the earlier years of my becoming oae of your representatives .on the board, when speaking at-these statutory meetings, I .called attention to what appeared to tny mfnd the anomaly of Government , nominees taking part in tho discussions', especially as neither they nor tho Government held any shares in the capital of the bank. Gentlemen, ‘that anomaly,' if such it were, now no longer exists. As you ate aware, the Dominion Govoramoat now holds a substantial number of shai'es in the capital of the bank, and its nominees moreover are not debarred from holding shares. Tb© o&fiirznan has referred in appreciative terms to the sendees rendered to the bank by -the late Mr. John Murray. From my own personal experience of liim * as a "director, > and for thirty years previously as a client of tb© bank when lie was chief inspector, I can unreservedly endorse what the chairman has said on this* subject; and having regard to the part he splayed in the resuscitation of the bank in 1891, bis conduct may be regarded as both pub-lic-spirited and disinterested, for be subsequently stood apart from holding any lucrative position in the bank, which ho unquestionably might have had if so minded. The unlooked for and speedy recovery of the bank confirmed Mr. Murray's assurance, given to the Government in 1894, that the bank had an enormously valuable goodwill. X conc&ido by repeating that I have

the exports were ... and the imports ... £29,710,000 £19,786,000 Surplus £9,924,000 The figures compare as follows with. those for the Tear ended September -10, 1914:— EXPOETS. September 30, 1914 ... September 30, 1915 ... £23,759.000 £29,710,000 £5,961,000 IMPORTS September 30, 1914 ... September 30, 1915 ... £21,067,000 £19,786,000 £1,271,000