BANK OF NEW ZEALAND

Waikato Times, Volume 93, Issue 14539, 10 December 1920, Page 5

BANK OF NEW ZEALAND

SATISFACTORY HALF-YEAR v REVIEW OF THE POSITION. LOCAL BODY DIFFICULTIES. (Bv Telegraph—Special to Times.) WELLINGTON, Friday. At the half-yearly meeting of the shareholders of the Bank of New Zealand, this morning, in the absence of Mr Beauchamp, chairman of directors, owing to illness, Mr J. H. Upton presided. The secretary read an address prepared by Mr Beauchamp, in which, after referring to the satisfactory profits for the half-year ending September 30, which justified an interim dividend of 8J per cent, he dealt at some length with the lcgisation passed last session for the rearrangement of the bank's capital and reserve fund. Imports Must be Reduced. In referring to the exchange position as between Australasia and Britain, which he pointed out had for many a ears shown little fluctuation, Mr Beauchamp said that during the last few months many importers and others had met with unusual difficulty in obtaining drafts to make payments in London, although they possessed plenty of money for the pru'Pose. This had been caused by • a large excess of imports over exports. The position could only be remedied by a curtailment of imports, especially" costly luxuries, and the stimulation of production to expand exports by every means. Difficulties of Finance.

New Zealand, continued Mr"Beauchamp, had enjoyed wonderful pros' perity during the war and commandeer periods, in which £147,850,293 had teen paid for our primary products by the Imperial Government. A very great change in the economic conditions had developed within the past few months., end the outlook generally was not so favourable as it was. There is an increasing demand for loans on the part of the Government., also by many local bodies and large joint stock companies. Local bodies had obtained authority lu borrow, in the aggregate, about £6,000000, and such of them as managed t-J appeal to the market early in the ycir secured their loans: the majority of them had, so far, not been able to arrange their finances. There were probably two reasons for this —(1) that the rate of interest was lower than most investors now expect to receive, and (2) the average investor was overloaded with such securities. This difficulty on the part of local bodies in raising money might not be without its advantages, for it must be obvious that ii any of them were influenced by a desire to carry nut 100 ambitious prii;rammes in respect to municipal enterprises. A great modification in the views of those in control must result from this difficulty in borrowing. This, however, might prove a blessing in disguise, for when money was again available at a more moderate rate of interest, industrial conditions might then be more favourable, and the projected public undertakings would in that case cost much less than they would if put in hand now.

The banking averages for the past quarter gave striking evidence that a change had .commenced. This was shown by the very substantial increase in the advances and discounts, viz., £8,808,035. The mortgages registered and discharged in the Dominion also furnished indications of the changed conditions, the excess of mortgages registered over mortgages discharged in the past 12 months being considerably more than double that of the pre vious year. The export and import returns for the nine months to September CiOth also emphasised the change that was taking place. Compared with the corresponding nine months of last year there was a decrease in exports of £5,390,i00, and an increase in imports of £20,786,540. Wool, Meat, Dairy Industry. Speaking in regard t'o the wool outlook, Mr Beauchamp said there had been a sudden change in May from the then satisfactory position. The market now was depressed, and while line wools were in demand at reasonable prices, medium and coarse crossbred-; lad slumped appreciably. The new clip was'not under requisition, and could be marketed as producers chose. The demand as it existed to-day was not equal to absorbing the available supplies in a reasonable lime, and efforts must be made to stimulate the consumptive demand by lower prices. The arrangement by the Government to assist growers to hold their wool wou d probably be taken advantage, of by many, but it would mean the creation of a considerable additional amount ■>! banking credit and would naturally ten! to curtail credit in otiier directions. While frozen meat, with the exce ilion of lamb and light-weight mutton, vas in a similar position to wool, Mr Beauchamp said it was a matter fyr n ucli congratulation that butter for export to March 31 wis at the highestprice ever realised for this produce. The industrial troubles in Great Britain, however, had had a depressing effect on the cheese market, and prices bad fallen substantially. As a consequence many cheese factories might srrange to make butter. The changes outlined were such as were to be expected in a transition period, and the outlook was not aspromising as a few months ago. By keeping their heads New Zealand, with its marvellous powers of recuperation could not be permanently injured by the changes he had indicated. Though an era of low prices both for producer and consumer seemed probable, the adjustment when over might prove a benefit.