BANK OF NEW ZEALAND.

Waikato Times, Volume 102, Issue 17130, 17 June 1927, Page 8

BANK OF NEW ZEALAND.

ANNUAL MEETING. INSTITUTION'S STRONG POSITION. COMPARISON WITH 1914. tSpecial to Times.) WELLINGTON. Friday. The annual meeting of shareholders

A the Bank of New Zealand was held to-day. Mr Richard W. Gibbs, actingchairman, presided, and in moving the ' adoption of the report and balancesheet said: — The figures call for a short notice and comparison, under the various heads, with the previous balancesheet. Capital and Reserve Fund: These oombined show an increase of £621,887, representing amount of calls paid up on the C and DJong-tcrm mortgage shares and the amount placed to reserve last year. The amount standing against the C and D -shares includes instalments paid by shareholders in advance. From this year's profits it is proposed to transfer £200.000 to the reserve fund, bringing it up to £3,025,000. Profit and Loss: Although the profit for the year, exclusive of thai, on investments realised or matured, shows a reduction of £65.000 as comparer!

, with the previous year, the actual earnings were not £3OOO less, the difference being accounted for mainly by a larger recovery of bad and doubtful debts in the previous year. .: Deposits: These show a reduction Of no less than £1,457,264, which naturally affects the earning power of the bank. Note circulation: This shows a shrinkage of £678,799—an indication

Of leaner times. Coin, cash balances, and deposits ■■ with bankers: Under this head the figures show but slight variation. Money at call and short notice, etc.: This item shows a reduction of £1,898,248, the amount thus temporarily invested being now utilised in other directions. Government and sundry securities: The total of these three headings setting out these figures shows a reduction of close upon a million. In order to maintain our cash reserves, which ■were being depleted by increase of advances and reduction of deposits, we found it advisable to realise a por- - titm of our investments in Government and municipal stocks. In some 5 cases these investments had been well bought; in others—mainly New Zealand Government war loans (to which | We subscribed very heavily during the war period)—we sold at less than cost. Our present holding of Govern-

ment and municipal stocks figures in the balance-sheet at considerably less than market value. The llrst nine Items on the assets side, representing liquid resources, amount to £22,482,008, compared with £25,066,358 of 12 months ago. The position remains a, strong one, but not unnecessarily so in view of the still unsettled state of the world's finances. ' Bills discounted and advances: These total £23,924,979, as against £22,662,696 as last shown, a not inconsiderable increase, which, coupled , with the fall in deposits of £1,457,264 ' represents an adverse movement of

£2,719,547. Landed property, premises, etc.: These stand at £520,877, as against £484,103 -twelve months ago. Rebuilding and enlargements account for this year's increase. Dividend: The dividend is at the old rate, viz., Is 4d per share on the ordinary shares. " The possibility of a 1 per cent, bonus for the year being forthcoming was foreshadowed, and bur earnings warrant this, and the modest amount, representing Is for Every £5 of capital, will be distributed with the dividend. The dividend on the < long-term mortgage shares .will llso be payable to-morrow. Progress of the Bank: The fateful year 1914 is a favourite period with many institutions for a post-war 'report of progress or the reverse, and if you. take the balance-sheet issued as at, March 31 of that year and compare it: with the figures now before you, I think you will agree with me that it shows a progress of which we have occasion to be proud. The total of the balance-sheet in 1914 reached what was then considered a very respectable figure, viz., £24,400,250; the present balance-sheet doubles that figure and stands at £48,860,540. The capital account has increased from £2,000,000 to £6,529,185, and deposits which in 1914 stood at £18,070613 now total £29,664,024, and advances and discounts from £11,360,486 have gone to £23,924.979. The staff has increased from 1001 to 1495, and the pay-sheet, in the way of salary and bonus, from £207,00. to £470,000. As has been said, "growth is the only sure evidence of life," I think the Bank of New Zealand may be considered to be very much alive.

Board of Directors. < The two directors to retire in March ast were Sir Harold Beauchamp and ilv Oliver Nicholson; both were reappointed by the Government. Sir George Elliot vyas re-elected chairman for the ensuing year. He left for a trip to the Old Country in April last, and my colleagues did me the honour of appointing me acting-chairman during his absence. The personnel of the London Board 's the same as a year ago. and we :ave again to express our appreciation if their care and vigilance.

World Conditions. While conditions generally may be considered on the whole lo have improved, they still give rise to much uncertainty as to the future and necessitate conducting our finance on a strong basis. The effects on finance and trade of the prodigious payments to America by Britain and the Continent by way of principal and interest on their war debts have, not yet been fully realised, but Ihe situation opens up some large problems which are already causing concern on both sides of the Atlantic. One of America's foremost econom-

ists, Mr Irving Fisher, of Yale University, in dealing with the war debts to his country, remarked: "When we think in terms of money we think Europe should pay; but when we realise that her payments must be in goods, we try to shut these out by tariff wall. So not only are we. Europe's taskmasters, but. we demand that they make bricks without straw.

Lot us be honest. Europe can't pay by piling more gold on our- shores, and pur heap is too biff already. Then if- Europe is forced to pay in goods, we should let the goods in freely, or if we are not to let them in freely, we

ought not to insist on payment." These few lines give occasion for some hard thinking, and the world's 'future financial stability is largely 'wrapped up in the problems which are therein dealt with, the solution of /Continued in next Column).

which must have a wide-reaching effect. Til is and other important worldwide economic questions will doubtless be receiving special consideration at the Geneva Economic Conference, which our chairman, Sir George Elliot, is attending as one of the two New Zealand delegates.

Replies to Critics. Mr .William Recce, in seconding the adoption of the report and balancesheet, said:—You are all aware that a good deal of criticism of the bank has appeared in the papers, and it has been suggested, or slated, that the

bank has not been as helpful as it should have been. I have been a director for many years and have had full opportunity of seeing what has been the bank's pojicy and practice in Ihe mailer of loans against farming securities. I have no hesitation in saying that every application has been i dealt with upon its merits, and that, no farmer applicant has been refused an advance if he was in a position to give satisfactory security. Our cri-

tenon ints uecn uiat ot productive capacity, and we estimate the value for security purposes upon the return which the luiid has produced over a series of normal years. Were we to adopt any other basis of valuation we should he running risks which we -could not justify. As evidence that the bank has not been unduly exacting, I might add that the greater part of the losses for which we, have had to make provision during the past row years have been made on the accounts of farmers and of farmers' compa " ''