BANK OF NEW ZEALAND.

Timaru Herald, Volume XIIC, Issue 14074, 4 December 1909, Page 2

BANK OF NEW ZEALAND.

THE HALF YEARLY MEETING. Per Press Association. WELLINGTON. Dec. 3. The half-yearly meeting of the shareholders of 'the Bank of New Zealand was held to-day. Mr lleauehamp. chairman of directors, addressed the. shareholders. N-> accuuuts were to he presented this being the half-yearly meeting, and the principal business was the election ol a director. Mr Martin Kennedy, the retiring director, being the only candidate, Mas therefore declared elected. Mr Kennedy had been a shareholders' representative since lb!M. In June last, said the chairman, he mentioned that they should he prepared for a diminution of profits, and the accounts at the cud of September showed that the forecast had iswn realised. Nevertheless the results for the period were gratifying, and he had no doubt that at the end of the year they would be able to recommend a dividend and bonus equal to that of last March, and to transfer a substantial sum to reserve. In the meantinme for the September half-year, an interim dividend of 5 per cent, had been declared on ordinary shares, and on pretcrence shares issued to the Crown. The dividend would bo payable at branches on the 6th inst. If the proposals now before Parliament regarding the taxation of Banks became law, this institution will be called upon to contribute a much larger sum than it now does. Calculated upon the present volume of the Bank s business, the increase will amount to not less than £'15,000 per annum. The taxation un- | der all heads last year totalled £33.I WO, including payment* to municipalities and public bodies. Proceeding, Mr Beauchanip said: — I desire now to congratulate the shareholders of the Bank, and the country generally, on the better and more promising monetary conditions that prevail to-day, and I do not think it would be improper on my part should 1 claim some credit for tne banking institutions of New Zealand for the change that has taken place. A year ago, the banks were criticised inside and outside of Parliament for not lending freely, notwithstanding tliat tne aggregate* of the advances and discounts, as at September 30th, 1008, exhibited a very substantial increase on the figures or* the previous year. A good many people are under the impression that it is the duty of the banks to advance against all and every kind of security. The sooner this impression is removed the better. Tliat tho bankers of the Dominion pursued tho right course during the past twelve or eighteen months is proved to some extent by the easier tendency that now prevails in the local money market. The bank's are to-day in a much strongir ptsition, and quite capable of furnishing all the legitimate banking accommodation that may be required. The bank returns for the past quarter show the strength, and we have but- to compare the aggregate of the fixed and free deposits and the advances and discounts with the figures for the corI responding quarter last yoar to appreciate the point. They are as follows : Fixed and free deposits, exclusive of Government deposits.—Bank N.Z., 1003. All banks, £'20,310,007—£'J0,979,1«.>. Advances ana discounts —jsank ;\.Z., 1908, £8,480.883: IIKJ'J, £7,001,111All banks £'21,i , i7,955>-£IB J I/0,7U,. Last year the Banks helped their customers liberally, and to this is largely due the tact that the. depression was -mild and of short duration. The outlook. —A distinct revival in trade appears to have set in all over the world, but particularly in the United States—of late years the storm centre of the financial world. Every mail received recently has brought intelligence of renewed activity in one industry or another. The steel trades are particularly busy, the demand for steel rails being especially strong. The railroad companies of America have large development works in hand and in prospect, involving an expenditure of many million dollars. The Union Paeitie and Southern Paeiiie Railway system have extensions aggregating approximately '2,<)00 miles m course of construction.

I Tho production of pig iron in the j United .States is now up to tfie highest I lerel of recent years. The report of tho German steel syndicates states that the orders on their books on September 10th amounted to about 5/JO.Oi)') tons more than at tho correspond!ng period last year. In Great Britain there is a. distinct improvement. Ship-building the main industry of the United Kingdom —is showing signs of recovery. According to Lloyds' Kcgister of Shipbuilding returns, the tonnage under construction on 30t-!i September was about 32,000 tons more than that which was in hand at the end of the June quarter, and about 45,000 tons more than was building twelve months ago. Tho European and American money markets, are at the moment rather high (the Hank of England rate now standing at 5 per cent.) but this is not an unusual feature at this time of the year. The Mother Country is unfortunately disturbed by a pending political crisis, for a general election is a great drawback to trade. The favourable conditions now apparent in Europe and America are being reflected in New Zealand. The export and import returns prove conclusively that the community has profited by the temporary depression. Traders and prodncers have been forced to face the position, and their efforts have resulted in the equilibrium, being restored. The exports show a substantial surplus over the imports, and, so far as we are concerned, that amounts to a favourable trade balance. The returns show that while in 1907-8 the imports exceeded the exports by £1,380,281, for the year just ended the exports exceeded the imports by £3,784,151. We are in effect back to the position we were in in 1906-7, which was the year of our extreme prosperity. It is necessary for this country to show a substantial excess of ox-ports over imports, because we have to meet annually .•;

very large interest liability in connection witJi public and private indebtedness. We have, it would seem, practically recovered the ground lost in 1907-8, and we may now reasonably anticipate a further forward movement. There are many factors that warrant this expectation, and it maybe as well to make a brief reference to them. The chairman went on to -refer lo the strong demand and improved prices for wool. Whether the present firmness ■ will he carried into the New Year was problematical, for woo! men are likely to be guided by their wellknown maxim: "When wool is dear itis dangerous: when it is very dear, it is very dangerous." Values are extremely high just now, and only twice in the last nineteen years have they been quite as high. There may be a reaction, but in any car-v it is very probable that higher prices tlinn last Sanson will bn obtained. New Zealand will produce a larger clip this yesir, and. with tho higher range of values, quite two millions sterling should be added to the income of the producers.

Exports of both butter and cheese were substantially increased, and as prices were practically up to Inst year s level, the increase of income from this source should reach a quarter of a million. Frozen mutton and lamb had recovered from the depression of July

and August, and though thq market was showing signs of weakening -Ironi pressure of isuyylics, the. Dominion should, with an increased output, oe able to maintain its increase from this branch of industry. There is some hope that developments in the c/iiled beef trade, with the aid of the Liu oy procss ,wil] take place in the near iuture. Hemp has improved materially and is now at a remunerative, level. Wheat and oats and other gram and pulse will again add materially to tlie volume of our exports; and, taking a.l the factors into consideration.. 1 am of opinion that when the produce year .■mis on September 30 Ui, 1010, the amount of our exports will establish a record in point oi value. hi conchision, Mr Beauchamp reprated a warning note: Caution must continue to mark the policy ol the trading community. and the lam! .speculators throughout the Dominion inu-t endeavour to moderate thenviews on values. ,\ew Zealand has • Teatlv increased her obligations in recent years, and while she is well able to faithfully meet all engagements, there is no reason why the people should be handicapped in their work bv ridiculously high land values. '.Mr Martin Kennedy took exception to the policy of not declaring the usual bonus of 2 2 l per cent. Some people thought that the State nhould have a larger slice in the Bank than it had got, and he considered that it was high time the shareholders entered a protest against any action of the kind indicated.' If the State must take more. l"t it carry the case before arbitration and pay the full earning power of the shares. The chairmau emphasised the necessity of building up a reserve rapidly. lie* expressed the opinion that higher bonuses should not be declared until the reserves reached one million. He was hopeful that by pursuing that policy they would not only be able to pav oif'the three millions when they matured, but extend their operations without increasing the capital, and thus have a large earning power on a small capital. In proportion to capital, the bank's trade was larger 'than that of any other hank in Australasia. He did not approve of going to Parliament for an increase of capital. The motion was adopted.