The Christchurch Star PUBLISHED BY New Zealand Newspapers Ltd. SATURDAY, JUNE 20, 1931. A PROFITABLE YEAR.

Star (Christchurch), Volume XLIV, Issue 145, 20 June 1931, Page 8

The Christchurch Star PUBLISHED BY New Zealand Newspapers Ltd.

SATURDAY, JUNE 20, 1931. A PROFITABLE YEAR.

Gloucester Street #nd Cathedral Square CHRISTCHURCH NEW ZEALAND. London ReproMntn.ii rot I R. B. BRETT & SON HEW BRIDGE HOUSE, 30/34 NEW BRIDGE STREET LONDON. E.CA.

'TpiIE BALANCE-SHEET of the Bank of New Zealand must have been read with envious eyes by hundreds of business men for whom the depression means nothing but loss upon loss. The statement often heard that banks make profits in bad times as well as good is strikingly borne out by the fact that the net profit for the year (£845,814) has been made at a time when the shareholders of ninetenths of the commercial and industrial concerns in the country are going short of dividends. With a balance of £623,156 brought forward from last year, when the net profit was over £1,000,000, the profit and loss account shows a net balance of £1,468,970, and after a dividend has been paid, the sum of £1,102,694 is to be carried to reserves which already stand at £3,550,000. When we consider that the Bank has substantial undisclosed reserves in assets that are greatly understated, it must occur to every business man that he is paying dearly for his banking system, especially as these institutions, so far from bearing a part of the burden that presses so heavily on trade, have lately increased the charge for keeping accounts by 100 per cent, and still maintain a system of inland exchange that is contrary to British and American practice. UNITED ACTION. 'T'HE RAILWAY BOARD, in calling for evidence regarding the desirableness of completing the South Island Main Trunk line, has given Canterbury an opportunity which should be eagerly accepted of presenting an overwhelming case in favour of this line. It may be taken for granted that Parliament will have to make the final decision on the line, but the endorsement or otherwise of the Railway Board may be the determining factor, and it is desirable that the province should not only show a united front on this subject, but should marshal its facts in a way that will admit of no argument. Particularly do we think it desirable that tfiat body of public opinion which is concerned with the discomfort of sea travelling should not be overlooked in a welter of economic considerations, pure and simple, and it would be well to have the point of view of the travelling public strongly represented to the Railway Board. A QUESTION OF VALUES. r T\HAT THERE is no immediate prospect of a reduction of exchange rates is the opinion of the chairman of the Bank of New Zealand, although the overseas trade figures for the five months ended on May 31 would suggest that the position has improved considerably. The imports and exports total respectively £11,105,526 and £19,070,266, or a favourable trade balance of nearly eight millions. But too much reliance should not be placed on the accuracy of these statistics for the method of collection, of imports in particular, is seriously at fault. Since 1916 it has been the custom to value imports for statistical purposes at the f.o.b. overseas port price plus 10 per cent, which is a standard loading for Customs purposes, and is supposed to cover the cost of importing. When it is remembered that exchange rates have soared to unheard of heights and now stand at approximately 10 per cent more than they did in 1916, it is an easy matter to calculate that the imports for the period quoted must have cost us at least another million pounds. Export values, on the other hand, are based on values declared by the exporter at the time of shipment, and represent what the shipper hopes to receive; but it is common knowledge that realisation values have in most cases proved to be very much less. Our apparent favourable balance must be seriously diminished in actual fact, and this is borne out by the chairman of the Bank, for so soon as the position rights itself, a lessened deriiand for exchange to finance our imports will be followed automatically by a drop in the rates.