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In the easy money conditions which prevailed, the Board did not consider that any useful purpose would have been served by the expansion of Central Bank credit in the Dominion to any appreciable extent; nor did there appear to be any need for contraction. The Reserve Bank, therefore, aimed at the maintenance of a state of equilibrium rather than the attainment of any other object by monetary means. In all its actions the Board has been guided by its conception of the two primarv functions of the Reserve Bank as a Central Bank. In the first place, as banker to the State it has aimed at conducting the affairs of the bank in such a manner as to enable it to give as much assistance as is practicable to the Government of the day in putting its monetary and financial policy into operation ; and, secondly, as banker to the trading banks and custodian of their statutory cash reserves it has, within the limits of its powers, endeavoured to render to them all reasonable support in the conduct of their normal business and also to safeguard their cash reserves entrusted to its care. In the exercise of these functions, and in tendering any advice to the Government 011 monetary and financial matters, it is the constant endeavour of the Board to act in a spirit of complete detachment from any sectional interests of any kind whatever and to regard all such questions entirely from the point of view of what is most likely to promote the welfare of the Dominion as a whole. Staff. In conclusion, the Board wishes to avail itself of this opportunity of expressing its appreciation of the willing and efficient manner in which the staff as a whole has discharged its duties. For and on behalf of the Board of Directors— L. Lefeaux, Governor. Ist June, 1936. W. P. L. Ward, Deputy Governor. Profit and Loss Account fob Year ended 31st March, 1936. To General charges, including salaries, £ s. d. By Balance of profit after making pro- £ s. d. rent, cost of note issue, and other vision for rebate on Treasury bills not expenses .. .. .. 76,210 11 10 yet due, and for sundry liabilities and Staff Superannuation and Provident contingencies .. .. .. 183,222 19 0 Fund .. .. .. .. 9,000 0 0 Balance, being profit for year .. 98,012 7 2 £183,222 19 0 £183,222 19 0 Profit and Loss Appropriation Account. £ s. d. £ s. d. To Payments to Government in terms of By Balance from Profit and Loss Account 98,012 7 2 section 11 of the Finance Act, 1934 70,000 0 0 Balance .. .. .. .. 28,012 7 2 £98,012 7 2 £98,012 7 2 Balance-sheet, as at 31st March, 1936. Liabilities. £ s. d. Assets. £ s. d. Paid up capital .. .. .. 500,000 0 0 Gold (at face value) .. .. 2,801,733 0 0 General Reserve Fund .. .. 1,000,000 0 0 Sterling exchange .. .. .. 24,876,004 12 0 Bank-notes .. .. .. 10,187,304 10 0 Subsidiary coin - .. .. .. 201,126 9 8 Demand liabilities — Investments .. .. .. 1,801,118 0 0 (a) State .. .. .. 8,794,967 11 7 Other assets .. .. .. 22,005 16 6 (b) Banks .. .. .. 9,049,392 16 1 N.B. —Holdings of sterling have been (c) Other .. .. .. 79,919 9 6 converted into New Zealand curOther liabilities .. .. .. 62,991 310 reucy at the rate of £100 sterling Profit and Loss Appropriation Account 28,012 7 2 equals £124 (N.Z.) £29,702,587 18 2 £29,702,587 18 2 L. Lefeaux, Governor. W. F. L. Ward, Deputy Governor. W. R. Eggers, Acting Chief Accountant. Auditors' Certificate and Report. —We have audited the balance-sheet as at 31st March, 1936, above set forth and have obtained all the information and explanations we have required. We have accepted the certificate of the Bank of England as to assets held on account of the Reserve Bank of New Zealand. In our opinion the balance-sheet is properly drawn up so as to exhibit a true and correct view of the state of the affairs of the bank as at 31st March, 1936, according to the best of our information and the explanations given to us and as shown by the books of the bank. J. L. Griffin 1 . v , D. G. Johnston/ u 1 ors ' Wellington, New Zealand, Bth May, 1936. Approximate Cost of Paper.—Preparation, not given : printing (560 copies), £8 15s.

By Authority: G. H. Loney, Government Printer, Wellington. —1936.

Price 6d.]

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