BANK OF NEW ZEALAND.

Dominion, Volume 1, Issue 235, 27 June 1908, Page 7

BANK OF NEW ZEALAND.

•ANNUAL MEETING OF SHARE- , HOLDERS. POSITION'REVIEWED BY THE CHAIRMAN. . ' THE DEMAND FOR HIGHER DIVIDENDS. " ■ DIRECTORS. REE USE IN CREASED , REMUNERATION. . Tho annual mooting of tho shareholders of the Bank of Now-Zealand was held at tho head offico, Lambton Quay, yesterday altcr- :■ noon. , Mr. H. Beauchamp, Chairman of - Directors; presided, and, in addition to tho directors. and. tho principal officials, twontytwo shareholders were present. ' THE CHAIRMAN'S SPEECH. v ,Tho Chairman; in moving the. adoption ot •tho report and balance-sheet; said:— • ' '' I have much pleasure'in again placing before shareholders so satisfactory a. report and balance-sheet as.'that recently distnbuted'among you.-Following our usual custom, I 'propose, in tho first placo, to refer briefly,: balance-sheet in . which there: is any considerable variation: A comparison of tho figures with thoso ot year ago I gives the following results:— ! . There is no alteration in the capital of the ;. r.' Bank,/which ? still stands' at ; £2,000,000. :. The Reserve Fund. ■ " Tho amount at credit of this fund, after I crediting tho sum- allocated irom last year's I profits;!* was! £250,000; and. in -pursuance ■ of , tho policy indicated at the last annual meet-ing,-the'directors-have again- allocated a . J considerable; amount-;from tho' profits of tho . year- towards : this important fund. The amouiit : prdposed to .be- transferred; out'of the'.profits at March 31 last is £200,000, '% "bringing : :'tho'.. reserve fund up to £450,000. •With the balance proposed to be carried for- '.' ;ward ;'ajfferVpayment ,"o*f.i dividend" and other appropriations, tho'. reservo fund and un- : divided, profits will amount to £50-1,097. : Notes in . circulation are .less by £52,563, but 1 still; stand '• 'at' • the -v. satisfactory, sum '■ of . £912,627. . ' Deposits. "Thero has been a gradual expansion in tlio doposit business of tho Bank-during tho year, although.tha increasa. is not so marked as that" recorded. for the corresponding ■ period. ■' Current :accounts : and fixed deposits together I .'"show ';aii! increase of-' over, £400,000 for tho year, while on tho other hand' New Zealand A. Government credit (balances are considerably f... less ' than 'at March, 1907, causing a net de- : ' croaso of • £137,747 to bo shown' in tho ag- ; gregate. .. •: ,Y' "Fixed deposit Tat-os were duriiig tho lattor part of the year raised one-half per. cent., > - which will probably . havo- tho .effect of. still : further.: augmenting tho deposits aof - tho • bank. ,-- Bills payable. and other • liabilities show a decrease of £356,133 mainly in bills . payable, due to, fluctuations in- Government . oporations... , v-

The Assets. "Turning-to the assets side:—Coin,' bullion, .money at\short call, etc., show acon-.'■i-i -Biderablo ( movement' ,on ® last .''year's figures.. Wo .have ' increased -.ourr.hblding of com by A- .£285,388;-.arid ;jthe .''item';!coin and- '.dash'"' bal-~ inpes now'Stands^'at"£2,44s,D?3;'."'"Bullion; is' less by-£29,688.". Money- at : -shoii,'Call, Gov- , i ernment ■. and other securities in London, aro ■ {.: together/'less-by £1,084,682. For the last „• few years ;wo have had mow 'than t .the nor- .; mal 'affiountiofiour surplus":fundsvin'vested in ?;?Bhort'"loans'; and-'othtfrf-liquid;: securities :in'i ; - London. , During last.year,' however; .'the do-; - maud for money in. New ;Zeala nd - was active, and we were , able , to; increase our advances' hero at rates distinctly :', better'than' those . obtainable ■in London;:- .Tho policy - of tho ~ bank in keeping large funds in London has v: : frequently', been .- questioned, ; but your direc- ■ tors hold that/it is most desirable to maih.tain ,a : position,of strong, finance, in ; that city ■ to meet the exigencies of tho large and'm- •• croasing business of the Bank. As has been frequently pointed out.m the-past, our-sur-plus funds can be profitably utilised ill London, ;iandi:by;;reasdn-^of; : the:'iiquid': nature; of-' ■ -.. their Jnyestmerit; they. are.:readily -available ■ for■ uso in ;tho Dominion when required. ."Bills ; , receivable ,m London and m transit stand at ~£1,844,440., . Previously -the ■ item .'bills rcceivablo! in our balance-sheet included only , bills receivable • actually in London, all i othor 'bills':ih transit hein" ih- ... eluded among bills discounted.; It has'necn ■ considered advisable (to now include bills in . . transit to London with bills receivable held ; / thefe. i v This gives, the "more appropriate, clas--j6ification,;ahd,our balance-sheet,willth'e'iii in ..r ; ,' : 'this .respect, Jbe 'bn'thb' same'lines as thosd .. . of .othen ,hanks doing busihess m • tho Do-' : , minion. ... . i. : "J. n i vei i tmcl! ts in the 1 colonies are "greater' , ■ by. £95,455, and now stand at £1,123,295. Y\ •i j'-"'-' '' -Y:V (■'"

for" adjustment of "bills purchased in 'discounted, bills show a slight.reduction on last year's figures, rt! 1 nS>',? dv '' vni:es f sllow an increase of )/er £1,926,000, making * tho total under the heading of, current account advances .and 1 other debts due to tho Bank, :"£8,350,619/as appearing in the.balance-sheet.: J •. "."Since, the': beginning of the year a certain amount, or" stringency;has-been expericnced m tho local moiiey: market, for : advanqes hav& hardened considerably. an ;-? ot ' v P.'.demand .for money tuts :ponunion, ■ .and: the" position- isaccentuated ; ,l.y v the recent fall in the price: of wp°l and- flax;-.'causing farmers' and', others engaged: uncommercial pursuits to lean mora neayiiy on banks and, commercial ■'institutions.'' lho iianki m tho circumstances .is pursuing a conservative policy in the matter of advances at the ipresent time, tho aim of tho direcbeing to meet the' legitimate .' require- ' mcnts of our own customers." ■ , •: ""With .regard ,to our advances, I' can but repeat given .to you on former occasions that:the greatest caro is bestowed .upon important .branch of tho business by your directors- and tho executive officers of .the Bank. . ,

• , Assets Realisation Board Assets. >. "The policy : . indicated in my address' -to you m June;-. 1907, viz.'. to, quit tho depond- : f encies , taken oyerAfrom ■ the Assets Rcalisa- , turn'; Board "at best ■ prices- obtainable with the least possible delay, lias been vigorously .carried out during the past year. 1 - At March ■ 31 assets- stood ■in -the books :of the banket £471,235, a: decrease of £286 964 on tho. figures ..at . March 31,11907; but in -order to . show- what has been, done in tho ; way,o^realisirig^lio-various properties taken over;,! would direct your, attention to the • following statement The .amount of mortgages, e'e ■-■ ,representing:, balances, oiitstanding on account of sales, taken ■' : ; overj at July -31, • 1906,' was ..." £371,410 Otlier assets taken over on December. 17, 190G . ... ■.... .... ■401,047 - ■ ; £832,457 ''; " The position of these accounts as shown /■; : in, tho present balance-sheet is. as follows - . .■Mortgages, etc., V.'..- - ... £378,040 Other assets unrealised 93,195 £471,235 ."At Juno 15 tho figures wore:— Mortgages, etc. ... v..; ... £362,416 Other assets unrealised . ... ... 75,364 •: £437,780 "A reduction iof £394,677 has thereforo / boon offected sinco these assets wero taken ... over in.:l9oG, and 1 think you will agreo with me that this result may bo regarded >'- .-,88, highly satisfactory. Wo are continuing

our efforts to realise the, remaining properties still in our hands, and will take advantage of any reasonablo opportunities of disposing of thorn."

Property. 1 r : The-Chairman went on to say that landed proporty and premises stood, after appropriation now made. of £20,000, at £321,853, a slight increaso on last year's figures. Tho directors had this year hllocatod £20,000 in reduction of bank promises and furniture, boing an increase 'of £4000 on last year's' appropriation. ' ' • Profit and Loss. "After making all necessary appropriations,'' continued Mr'. Beauchamp, "tho balance of net profit for the year amounts to £309,922, as against £294,880. last year. To,this has to bo.added the balance brought forward /from, last year, . £31,675, -making • total available . for distribution, £341,597— a 'result- that must .be regarded as .cxtromoly ■gratifying.. .- : 1 _;. , ' " An interim dividend of 5 per cent.'has already been paid to holders of ordinary shares and in respect of tho preference shares .issued', Crown. /. Tho directors now, proposo. to pay - a 'further dividend of .5' per cent.: on toy ordinary,, shares and of 2-i per cent, on the preference share capital.' Tiio 'total distribution by way of dividend is thus £87,500. Of tho balance remaning it ,is .proposed ;to transfer. £200,000 to -tlio reservo fund, and to carry, forward. a . bal-' anco of £54,097." ■ ,

. ' The Provident Fund. ->j - A ..report upon tho ' Provident, Fund had been obtained from a London'actuary, and the' : Board had decided to .adopt one of . his recommendations., " This necessitated," continued th'o Chairman, " our setting aside the sum pf;£5669,'.-or, say,'£l33l less than the amount you-voted to tho Fund by way of a. ''refresher,' so to speak, in! 1907:,'. Now, seeing -that our net. profits as shown in' the 1 balance-sheet forthe past financial year, 'after providing .for ,;thc - sura of £5669, aro greater- by £19,041 than'they were in the year .immediately preceding it, I feel : satisfied .that you will- not demur to .the action of the Board; in respect to this maitter; It -is the. intention of the Board, whilst, the conditions of.th'e Bank por'mit; to mako a similar payment to the Fund each year. " Our Pension Fund now, I am gratified to State, compares very-favourably with that !of,; any pother bank transacting business in this Dominion, and I confidently anticipate that it-will bo tho means'of not only at-ract-ing. to vour ranks,; well: educated ambitious youths who have decided to adopt banking- as .a .profession, but of * enabling-■' us to retain, the .services ,of many .'capable; experienced officers who'in other circumstances might be induced to - accept appointments olfering greater present attractions...'Whilst improving tho positioniand prospects of the 'officers'; the Board has ; .hot been; unmindful of its responsibility ;in- connection . with 'the Bank's 'messengers,- a sum has been allocated, the interest" on'.which will provide' pensions 'for' .them 'also..when the time ''crimes' for their retirement, ;; ■]

.) A World-Wido Change. 11 v.Since;.l met you--this time last -year, there •lias, unfortunately, occurred .. a; very ; changein; the economic and commercial conditions'of the • world; .The . financial- ■ crisis that convulsed' the United States in OctobbrDecomber last had far-reaching'effects, which wo in New . Zealand aro feeling to a certain extent; , ; Thero haa-been a marked fall,in tlio values of the majority ofbur .-'staplo p-.o? ducts, • notably ;' wool, tallow, hemp, -kauri gum,:and .frozen'meat(with tlio exceptioribf, lamb), due to the financial stringency, in .-Neiy York reacting on London, Paris,' and Borliri; and'.causing in. these centres ', to "advance, 'to prohibitive;and;; trade-paralysing rates. -~ The appreciable, lessening of industrial activity "in' the.TJnited Kingdom—which was a direct result of the financial panic—affected the: values'. of; our 1 : products. ' Wool has: suffered severely, : but;' : tho..feno.of. tho : May sales iva s: encouraging and gives hopes, of an early revival. "v- ■ '. • •• -

Butter and Cheese/ 1 ■ To. turn ,to a' brighter side of .the. picture,. : :it is .satisfactory to note the splendid prices obtained -for' butter and cheeso dur 7 ing the past season.' In the matter of price, butter i; established .'a rocord,. several . consignments realising from 140s. to 1525. per cwt.:.m Tooley Street;;. Thes.e prices;. equal-'-led, if.they did.not.exceed, those made for the: best' Danish, -which, heretofore, occupied' -'pride of'.place.' v. It isvinteresting to' observe how tlio exports of. dairy products continue; to expand.: ■

■ 0: "v ; V.' :y. In 1897,-8. we exported buttor and cheese valued at ... ... 683,862 In 1902-8 we exported'butter and ■cheese valued afc - ' ... ; 1,450,363 In 1907-8 we exported- butter/and ■ . cheese valued at. 2,130,71 i' "The ; exports 'of 1907-8 exhibit. the enormous and highly satisfactory increase 'of 265 .per' ccnt./as compared with 1897-8. The roturns for the past season would have been greater had,it for tho inordinately, tong, spell , of. dry «wedther 'we' experienced last spring .and summer, which naturally caused:, an • appreciable shrinkage '.in milk supplies.;.;/...This- : unfavourable weather ; is also responsible for a rather, lighter, harvest than usual; but whilst tho volume is less, tho quality is excellent,- and there is at the moment .an active demand■, for all descriptions of grain arid.-.other:-'agricultural pro-' ducts at exceedingly prolitafilo rates.'; V. Exports and Land Values.

On balance,; however, the -fall 'in the values of ; our principal staples exported shows a. shrinkage., which lis most . marked! Tho.:. tbtal, values• of our. exports, -exelusivo of specie, for each of tho past, five years ending March .31 compare as under:—', .. 1904 :'.„v £15,301,209 >- 1905 ; ... ... £15;.520,903 -. 190G ... . ...' ... . £16,217,212 - ' 19U'- '■ ... .... ... £19,.131,658 '-. - 1908 ; .... ....' ... £17,863,842 Thus, after a ; series of'increases, there has como a check, the decrease of 1909 as : compared with; the .previous year amounting 't0£1,570,816.: £1,570,816.: Tlfo declension, will be more dearly emphasised, when: the' true' trading year—that, is, September 30—is completed. The :lower prices of produco • naturally, affect land values, for, after all, land 'is only worth 'according ,to whatit will .yield, and mustfluctuato'Vsvith tho rise arid fall of tho primary products. Building land has, 110-' doubt, been raised to fictitious - values, and a sharp drop .in that < description l : will- not be altogether an. ovil, i'or farming land there continues'to' bo: an cxcellont demand, hut it is not unlikely that values of rural lands ivill reeede somewhat in tho near future owing, to the fall' in tho .prices of ."'commodities,'"and' also to tho,probability that considerable ad-. ditional- areas will be marketed through the effects of tho high graduated! Land Taxes which are to' become 'operative presently, and which were designed, to bring about the dispersal . of. big estates.. Moreover,. it is confidently "anticipated: .that, as - tho, result of the Native Land Commission now sitting, .'ory large blocks Cf land, especially in the .Auckland Provincial .. District, 'whicu-'up. td' the-present liavo: been, lying wasto,' will be available, for selection by intending settlers' m the near, future. .?■ ,;.

. A Prosparous People. ' '.With-tho sharp dcClino that has occurred in'the valuo of wool: (which is now lower that it has been: since 1901-2) the outlook for the Dominion of Now Zealand is not'so rosy as it was when I addressed you on a similar occasion in 1907. Wo aro experiencing a set-back; but, having regard ; to the prosperity wo have enjoyed for the past ton "or- twelve years,>and tho national and individual wealth which has accumulated during tho years of plenty, thero is little doubt that tho community can stand the slight business check wo liavo mot without trepidation. For tho benefit particulaily of shareholders ; who reside outsido of New Zealand, vou will perhaps permit me to emphasiso this point by tho aid of official figure's.". After quoting statistics relating to tho savings, tho public and privato wealth, industries and population of tho Dominion, Mr. Boauchamp proceeded: " These figures, I think, provo conclusively that I am not unduly optimistic when J say that at no period of our history wero, wo better situated than we are to-day to face a set-back in the prosperity wo liavo enjoyed during the last fow years. 1 an) no prophet,

but I believe that its duration will not bo so long as Boino anticipate. If wo turn to America (whoro the commercial set-back had its origin), wo have a reassuring report from Mr. Seymour Bell, tlio British Commercial Agont in tho United States, who points out that tho panic thero was entirely financial, and thougli it caused for tho time boiug a widespread diminution of trado and industry, still goods were not thrown upon the markets at ruinous prices, and there has been a prompt and effective check imposed upon production. ' Abovo all, it has to bo considered that tho farmers, who still form: tho backbone of American prosperity, havo been very , little affected. The prosperity of this class is exceedingly great, and a country that produces crops valued at one thousand five hundred million pounds sterling (£1,500 ; 000,000) is unlikely to suffer long from industrial depression. 1 ' Of courso the Presidential election this year will cause a disturbance; but, on tho other'hand, tho great Republic is promised a bumper harvest next mouth. , . > Tlio Cheapening of. Money. "Tho Bank of England discount rate is now 2J per cent., or only a half per cent, above ' the . traditional minimum. This cheapening ofj money in London has already had an excellent effect in stimulating investment in gilt-edged securities.. .In New York, accord-: ing to recent mail advices, call monoy-was at 1J . per cent. In European capitals, tho tendency of tho money markets/ is downwards. Cheap money must , inevitably exerciso a beneficial influence on trade and commerced.

"I do not wish to bo misunderstood. / While I believe there is little justification for the assumption that the check wo are -experiencing will last long, still, with a loss'.buoyant commercial barometer, it is obvious that caution-should be; our watchword, and this policy-should, in my opinion,'be'adopted by sonio business houses who, in recent, years, ,havq_ been, overtrading and. somewhat "indiscriminate in the giving of credit;, by farmers who have ' been, and are, paying , excessive prices for land —both leasehold : and .freehold —and by others, who,' with little regard to: the , future, have ; been I living at an extravagant rate.' ■- t ßoard ofj Directors. "Mr. F. do C. Malet, in cons'equenco of ill-health,, resigned his position as a director on March 31 last, and tho Government was pleased to appoint Mr. Jamos Bennio Reid in ! succession to that gentleman. -' Mr. Malet :was connected with the: Bank \ for slightly, overnirie years; and for just oyer five years carried out tho: responsible duty, of chairman—to the ,complete satisfaction; of his colleagues and' with 1 much iadvantage to tlio Bank,'-. Mr. Martin-Kennedy returned to the Dominion in December last. During his, residonco in London, 1 he was 'associated with ,our Board .in that city;, this' afforded him an opportunity of; gaining a good insight into the ramifications of our extensivo business at that point. Wo aro much indebted to tho members of the London Board for tho caro and discrimination they oxercise in tlio conduct of-our business. , - . ' . ' ' '' : .

' ; "■ v-; " Staff. . • It' again- affords- me much pleasure, to record my colleagues' and my own appreciation of the valuable services accorded to the ■ Bank during,the past year by tlio London,, Australian, Fiji, and New Zealand stall. To Mr. William Oallender' your and our thanks aro especially due for the able and conscientious manner in which he has discharged tho .onerous duties of General Manager. In a practical manner, the Board have recogiiisod .the staff's good work bv paying them a nonus of 5; por cent, .upon all salaries. now formally move tho adoption of the report arid balance-sheet.l" If this be carriod, tlio dividends proposed—namely, 2J por .cont. on tho pYcforcnco shores, making 1\ 'per cent; : for:"the year,'-,and 5 per cont. .on the' ordinary shares,. equal to 10 per cent, for' the samo period—will pp-payable- ill Wellington on 29th ' lhst., and at ' tho branches, upon receipt • of l advice." (Applause ) i I SPEECH BY MR. WATSON. ;,,Mr. W. Watson,, in seconding the motion,: saidWhen I first becamo connected with : tho Bank, of New Zealand in 1894 it jvas my, unpleasant duty to report to tho tlion Colonial Treasurer '.-that;,' out of £ L 1,000,000 of; ■the; Bank's,•so-called-' assets, ' less than onor half woro profit-earning, while .interest or its equivalent; was':beihg ..paid on deposits and othor moneys .: aggregating no less than £6,366,000. This; statement, without, going into, further; details, -will, suffico' to. make clear, to you what an up-hill battle Jias been fought to obtain the position ocoupied to-day. Iu the balance-sheet now before you 'there aro profit-earning assets' amounting to oyeri £15',000,000, all sound and good, against ill-' ' liabilities of: about It is perhaps needless that'in; 1894,, although tho : goodwill was; of'great' prospecr' tivo'valuej the Bank.was making no'profit at. all | ; now, ; after liberal provisions', tho: net 1 profit - for : tho year ended 'March 31, 1908, 'is £309,922. Shareholders;of 1894 will naturally say:' It is a splendid result, for tho Bank,, : but by our heavy contributions wo • helped to bring ' it about, yet whero do wo como ,in,: for wo went for years :without any. return at all, and even now, wo. receive only two per cent, on'tho money we contributed.'

. / Prospootlvo Dividends. > " Ladiesand. Gentlemen, —I say that I firmly believe. you-.will not havomuch longer to wait boforo receiving a more adequate return. Tlio bther Banks doing business in the Dominion' havo. reservo funds.,in proportion, to their liabilities; which cast our reserve fund somewhat in the shade, but ours is mounting up very, handsomely, and if we are ablo to add substantially to it noxt year, as well as pay increased. dividends, I should advocat'o that : course. Then thero is tho question of probable increases' of capital in tho future! Tho banking business of tho Dominion must go on increasing, and thero is every reason to beliovo'that this Bank will maintain its ratio in the increase., Moro capital will bp required to balanco the greater responsibilities,' r and shareholders should then have the opportunity of. investing profitably, or transferring their options at a premium.

Rights of Shareholders. _ " Thero should be no doubt that your rights will be respected both as regards capital and dividends. _ The Eight Hon. tho Prime Minister,; speaking in Parliament last year,. pointed: out clearly that the ordinary shareholders' rights in the Bank and its goodwill wero paramount. In the course, of his speech he said:— ,;,. ' ,■ "-'The Government had only a comparatively small interest in tho Bank. . : The sharehblders controlled the whole of the deposits'.amounting to about thirteen -, millions sterling; they also controlled tho wholo of tho, bills iinder discount, and ' owned by far tho greater proportion of the goodwill of the Bank's business. ..... the shareholders of the Bank, who though rescued by tho colony coming/ in, had still rights that even the almighty • power of Parliament could not ignore. They were bound as a matter of fairness and justice, to see that tho share- : holders' rights wore protected.' . ~ . Should the Stato take over,tho Bank of ' New Zealand, the shareholders would still' havo a right to keep their own business, . to keep their own deposits, to preserve ■ their own goodwill, and no Act of Parliamont could take away these rights from '.'; them any moro than by Act of Parlia- • mont'you could shift New Zealand to somo other part of the world.' ' : '.' This leaves no doubt as to tho sharehblders' rights. The Government's Interests. ■ "It has bedn urged upon mo by prominont shareholders that tha majority do-not fully comprehend tho position as between tho Government and the ordinary shareholders, and that I should mako it clear on this occasion, ltcally it is this: —Tho Government own 75,000 prefercnco shares of £6 13s. 4d. each, fully paid up, and tho ordinary shareholders own 150,000 ordinary shares, also of £6 13s. 4d. each, but having £3 6s. Bd. paid up. Dividends arc'arranged on a sliding scale, so that, when dividonds higher than 5 per cent, aro paid, tho ordinary shares bear double increaso to tho prcferonco shares; thus, if 15 per cent, wero paid on ordinary shares, 10 per cent, would be tho rate on the preference shares, but by special limit, 10 per cent, is tho maximum rato for them, whoroas tho rato on ordinary

shares is unlimited as in any other bank, 'l'ho Government guarantee £1,000,000 stock issued by tlio Bank in London, and duo to be repaid on July 19, 1914. On tlio Board of tho Bank tho Government linvo at presont four nominees, and two members are elected by tho ordinary shareholders. Tho Government appoint tlio chief auditor, and tho Gov-ernor-in-G'omicil may veto any resolution passed by the shareholders. Tho Directorate. "It will, therefore, bo scon that the Government's interests aro ; moro tliair amply safeguarded. When tho guaranteed stock is paid oil', it is reasonable to suppose that tho shareholders will havo representation somewhat more in accordance with their larger interests in tho Bank. 'Indeed, for my own part—and I know that Mr. Kennedy agrees with mo—l think that, in fairness and justice, tho shareholders should even now havo a greater say in the affairs of tho Bank, which is principally their own institution, although wo recognise that tho Govomment should havo efficient checks, and fair , representation on tho . "In accordance with tho Act of Parliament, I am the next to retiro from tho Board by rotation, and again I shall offer myself for re-election at the hands of tlio shareholders. I would ask those who consider that I have served,them well for the past 14 years to kindly givo me ! proof of their appreciation by not forgetting to record their votes for mo when tho voting papers reach them." (Applause.) OTHER SPEAKERS. Mr. John Mill (Port Chalmers) compli-j mented the directors on the favourable posi--tion of tho, Bank. He continued: —'"The balance-sheet shows us that, after provision is made for paying £40,000 interest upon 4 per,-'cent, guaranteed stock, the net, profits earned by the Bank fo,r the year are shown to have been £329,000, an increase of £19,000 •oil the figures of the previous year, and no less'a sum than £119,000 in excess of tho profits fivo. years ago. We observe that out of this sum, the directors havo applied £20,000, or £4000 more tha'n last year, to tho i reduction of tho promises and furniture account. \Vo also notice-that tho. recommendation of tho Board for tho distribution of profits among tho shareholders is identical with that of last year; this, we think as shareholders, ought now to havo been increased somewhat, inasmuch as wo ought to participate in somo bettor returns for tho years that tho Bank paid no interest to its, shareholders. 'But. wo 'suppose, and we can seo by tho balance-sheet, that it is tho intention of the directors to carry, to reserve fund the sum .of £200,000, which represents a very! large sum of money earned in olio year. 'This will mako tho rcservo fund stand at £450,000, which wo think ought to enable the directors to declare at least a, 5 ■per cent; bonus to help to make up'tho loss to the slianJiolders for'tho many years, in which they received nothing on thoir shares. Wo feel confident that tho Board of Directors, as now constituted, will.yet bo in a position to pay tlio shareholders as much as any .bank trading in the Dominion. As long as wo have a' Board of Directors as at present constituted, there is no fear of shareholders' property and interests" being anything but woll looked after.- Our representatives upon the Board—namely, Sir. Watson and Mr. Martin Kennedy—aro both gentlemen well fitted for the positions which thoy hold, and wo, as shareholders, trust that they may be long'ablo to successfully represent us on tho Board. We know what a very keon interost -they...have taken on our .behalf. Mr'.,Watson is a_ .thorough banker, and one who', is well qualified to represent tho shareholders; Mr. Martin' Kennedy is a successful merchant, and-ono of our earlj- settlers. Wo feci confident that i our interests in tho Bank will bo welL eared for by tteo two shareholders' representatives. V ,

A Wonderful' Recovery. "Sir, it is needless, for. mo to remind my fellow shareholders that wo. qro greatly indebted to Sir Joseph Ward and tho late Mr. Seddon, for tho part they-took in-securing tho Bank.of Now Zealand for tho people of the Dominion. Many of us remember well, when Sir';. Joseph Ward,, was. .Colonial. Treasurer, when, ho, in his'placo'in the Hou3e of Representatives, brought, down a Bill'jand carried it through its first/second, and third read-, ing'-'in-'orio sitting, showing tho great need' thero was for the Government to assist this Bank from closing its , doors which undoubtedly I would have occurred if ■ the; Government had not supported it, with 'a guarauteo of £2,000,000.'' Wo aro now shown by. tho balance-sheet that' tho reservo fund stands 'at £450,000, and .'taking everything into consideration after What tho Bank lias ebmo through, it must be admitted that it is a wondorful'recovery." 'Mr. Mill also paid a tributo to 1 Mr., Malet for. the services lie, rendered to tho'Bank,, and expressed satisfaction with the: appointment ,of Mr. James' Rei'd as a director, and of Mr. Micliie, whoso services would be of great valuo to'tho Bank at Home. • Tho shareholders thought' tho 'directors , wero not being remunerated adequately in view of the amount of time and work th'oy gavo to' the Bank;, .(Applause.)

A Pica for the Depositor. . . Mr. J. M. Kobbell asked for further information in regard to, tho'action of the directors in strengthening the Provident jninci. Ho also thought tho! shareholders should bo shown in tho balance-shoot what : the Bank' •was paying in taxation. . lii rogard to doposits; it seemed to him that there was a ; Court appointed by tho Government for, tho purpose of raising tho wages of tho working man. to the highest possible point, there, was another body! appointed' by : .the. banks to bring down tho. earnings of tho siiiall capitalist,', although ' they had it- ou Government authority that the cost of living' had , increased during' the. last fow 'years by 18 por cent., Without these small depositors,, tho bank could not pay such a liand-, some dividend. They should receive- a littlo more attention.' Tho Government some timo ago raised tho rato of interest ,011 Savings Bank deposits, and ho thought tho Bank of New Zealand was quito as well able to pay 3} por coat, as tho'Government. For a long time 3 por cont, was paid.' Tho Government, by raising tho rato, scooped for- tho Savings Bank a largo amount of money that the Bank of New . Zealand would othorwiso have secured. ■ . ■

Division of Profits. Mr. Martin Kennedy said lie would leave tho Chairman'to'-reply to the last speaker. Ho thought tho shareholders were quite satisfied that tho balance-sheet showed ovidenco of solid,, progress, but', they could not help feeling somo disappdintmont that they wore not now receiving larger dividends than those,proposed to hi paid. While tho Bank was making larger profits than any other Bank in tho Dominion, it was scarcely dividing half the profits that othor banks woro. He wished to express; not for the first timo, jlis opinion that subject to putting areasonable amount to rcservo each year, the Bank of' Now Zealand ought to divido as much as any other bank in tho Dominion. Thero was no division of opinion between the preference and ordinary oharoholdors as to tho dosirability of, a strong reserve fund, but while building, up that rcservo, could : they not divide 40 per cent, of the profits of'tho Bank among ,tho shareholders. (Hear, hear.) /.Ho' had- suggested such a departure last year, but his viow. was that it should not como into efFect until next year. Tho Government's interest in tho Bank was; not one-half, but only, a, third, and whilst tho 'shareholders owned /two-thirds of tho capital, thoy wero supposed to bo unfit to : exorciso moro than one-third of tho power of- control as indicated by tho constitution of tho Board of Directors. TJIO present arrangement was justifiable in tho past, but' tho shareholders now had the larger interest, and whilst ho admitted tho great services dono by tho 'Government, 110 maintained that what had stood by tho Bank was tho million of 'money which was put in by tho shareholders between 1595 and 1907, and which must now amount with interest to a million and a half at least. Yot tho shareholders, ho calculated, woro getting only 5 per cent. 011 their shares. Whilo they, could not fall back on the millions that wero written off at tho time referred to b.v Mr. Watson, who could say that that action was not duo to panic, or that tho assets wero not written down unnecessarily? It should bo remembered that, whilo tho Bank was and always would bo thankful for tho help received from tho Government, yet tho colony had taken its reward in tho sliapo of'half a million shares

at par, and that not at a time when any risk was involved, but when the Bank had rocovered its stability.

Disproportionate Representation. 'Ho agreed with Mr, Watson that the timo was not far distant when tho Government would rccognise that tho Bank belonged to the shareholders—two-thirds of it at least. Now that the Government's risk in connection with tho Bank was merely nominal, in tlio form of a guarantee, ho did not think.it was reasonable that tho Government should appoint two-thirds of tho directors, and ho hoped the timo would soon como when a change would be mado. Ho was not complaining in any way of tho actions of tho Government nominees on the Board. All tho directors had worked together most harmoniously, but there were necessarily many circumstances under which members representing tho shareholders would feel moro sympathy for the. shareholders. They saw : almost overy interest being provided for, and yet they would be told that they ought to bo satisfied because they were getting 10 per cent., which Mr. Watson had said was only 2 per cont. It was his conviction that! if all tho directors were elected by the shareholders, a larger portion of tho profits would bo divided. amongst tho latter. (Applause.) THE CHAIRMAN IN REPLY. Tho Chairman said that from his knowledge,, lie had 110 hesitation in saying that, whon tho Government came to .tho rescuoiof the Bank in 1894,. its position was that of .'an. insolvent institution. True, it had a magnificent connection, which had enabled it sinco to build up a profitable businoss, but had tho Government not come to its aid, it would have been wiped off the financial slafo. He had had a return taken . out, which showed that tho shares on the New Zealand register at March 31, 1003,' numbered 79,515, of which 45,315 (equal to. 5G.77 per. cent.) wero acquired subsequent to March 31, 1899. The average cost to the present holder of each sharo which had been, acquired since March 31, 1899, was £5 1 8s. The return of a 10 per cent, dividend on the above average price of £5 Bs.; was not 2 per cent., as stated by Mr. Watson, hut £6 3s. ■4d. per cent., which lie thought was a very handsomo return on the capital invested. • A shareholder : " But have you allowed for tho time when tho shareholders did' not get [that? There wero years'when thejy did not get anything." The; Chairman: "Yes." .He wished to make it clear that the return,dealt only with' shareholders .in tho New Zealand register,': whose number' was ,56.77 of the total number, of 'shareholders. ;Procccdiug Mr. Beauchauip foreshadowed the' raising of additional capi-' tal'in the year 1914.' Ho thought 'they would bo able ■' to issue tho. shares at.' that timo at such a premium as would causo a considerable .'augmentation of tlio reserve fund, but he did not think they. need. issue ' moro An application v . 1 :

•. The Demand for Higher Dividsnds. Ho did not think tho' time was opportune for paying- greater dividends!. Tho: subject, would have to be taken'into consideration, .but up /to", the present it had not engaged the attention of the Board as such, although different members had expressed their individual opinions. The, Board had acted on •Ita own .'.responsibility in 'taking action to strengthen the Provident Fund. \ There were many reasons why the position of that fund should bo improved, but tho Board did not think it well to make the, wliqlo,matter public. -Tho:shareholders might rest ; assured that there would be no extravagance in this coniiectiony but' it was . thought advisable. ( .to' try ;by . this : moans to mako. tho sorvico 'so attractive that .the Hank would' have "the pick of, tho.'young"ihen- of the Dominion who desired .to '• adopt. banking' as" a profession. Ho did not think it w r ould bo advisable to set out in detail tho taxation paid' b,v theBank; but he would,say!that.'tho Bank jdid' not pay the ponal rat,e of 25 per cent, graduated tax.

Profits and Dividends. : - In regard to the. dividends paid by thedifferent:Banks, as compared with their net profits) lie would like to quoto figures which ■would put-the matter, in a. better.light, than it appeared in the remarks of Mr! Kennedy! Tho percentage; of. not profit transferred to reserve-fund by the different Banks'trading in Noiv Zealand, according to the latest available returns; was, as; followsTho Bank ■ of New Zealand showed up remarkably, well,, with 64 per cent., and tho others were:' Union Bank of Australia 27 per. cent.,■ Bank of New South Wales. 20, per cent;, -Bank of Australasia 41 per cent., National Bank of New Zealand 38 per cent! ' To.puVtho thing in another way,., tho percentage of,reservo fund to capital in tho Bank r of New .Zealand was 50 per cent., Union; Bank of Australia 82 per cent.; Bank of New South. Wales 64 per: cent., Bank of Australasia ,93 .per cent.,, National Bank of Now Zealand 89 per cent. Until jtliey brought up' tfio .reserve fund of tho Bank of Now Zealand to a figure that would compare, with those others, ho thought it would bo uiiwiso to. pay higher dividends to shareholders., It wquld befa pleasuro.to pay 15, per cent., but ho was there to carry out a policy of safety and conservo tho best interests of tho Bank! Ho knew lib had the cooperation of..' the directors,. although they sometimes' differed in opinion. Many men,' many minds.' Until the question,of increased dividends had been considered by tho Board, he asked'the shareholders not . to come to any . conclusion ;as ,to what they might; or might not expect.- "

• Tho Making of the Reservo Fund. ■; Hp would, liko to givo them a'very-short history of • tho. reserve fuud. l -;'.The':present reservo fund was formed in 1896-by, surplus received from' salo of 500,000-New Zealand Government 3}-per cent, stock issued in payment for 500,000 Bank of New .Zealand preferred shares issued to tho iri .terms of the Bank of Now Zealand, and Banking Act, 1895. ■ Tho amount'of surplus .'so placed to : tho reservo fund was £23,474, which; formed tho reservo fund, of the Bank until.. 1904, when it was increased to £23,987 by premium 'on salo of' , forfeited shares' credited' in .terms, of tho Bank, of, Now Zealand Act,. 1903. Tho following' year, 1905; tho -reserve tfund was increased from tho samo source by £19,910, bringing it up to the magnificent sum of £43,897, and in .1908 by £37,397 from tho samo source, making it £81,294. Tho total'amount received on salo of forfeited'sha'res which had gone to augment the reserve fund was £57;820. In 1907, when-the Bank was :freod from tho imcubus of the Assets Realisation Board, 'tho. 'fund was brought up to £250,000 by tho transfer of £168,705 from tho profits of tho year elided March 31,1907, while the transfer'of £200,000 from tho profits at March 31 last, brought-.tho reserv'o to £450,000. Tho report: and balance-sheet wero then unanimously/adopted. REMUNERATION OF DIRECTORS! .(.Mi*. F.'Weston-moved:—"That tho Directors of tho .Bank bo paid, as from March 31, 1907, tho sum of £1250 per annum for, their services as members of the Board of tho Bank of Now Zealand Estates Company, Ltd., such sum to bo in addition to their, present allowanco, and to ho paid out of tho profits of tho IBank, until the said; company shall bo wound up, or this resolution shall bo rescinded by a further resolution of the shareholders." •

The movor : said that the present rato of remuneration, £300 for each director and £500 for tho chairman, was fixed in" 1897, when , the position of the Bank was quito different from what it was at present. Tho assets then wore only 50 per cent, of what tlioy were now. During tho last few years tho directors had supervised tho remaining estates of-tho Bank of No\r Zealand Estates' Company, and had thus saved to the Bank £1250 per annum, which would havo been paid as salaries to tho members of tho Board, of that Company. Ho thought tho timo had How corno when tho increased burden of responsibility and tho prosperity onjoyed by tho Bank would justify an incrcaso in tho remuneration of tho directors. Ho did not think it was a case for a largo permanent incroaso, but tho additional sum should vary from year to year according to the prosperity of the Bank. In conclusion, Mr. Weston' eulogised tho directors for the caution and firmness they had displayed, and acknowledged tho Chairman's dovotion to tho interests of the Bank. Mr. Jackson, of Nelson, socondod tho motion. Ho remarked that tho earning power of tho_ Bank was larger than that of any other institution in Now Zealand, and was

closo up to the best in Australia; - The duties of the directors were onerous, including the. watching of many markets and keeping in touch with movements all civet 1 the world.'' Mr. Martin Kennedy, referring to Ternaries by Mr. Watson and the Chairman,; said ho hoped there would be no occasion to increase tho capital of the Bank otherwise than by undivided profits that might go .to rosorvo. They might have to do a restricted Ibusjness. rather than increaso tho capital, and then probably not earn as much as.thoy were .paying out. 1 ... ' ■ Tho Chairman rejoined- that 'what- ho- had. said as to increasing the capital ■ was morelya matter of probability, and:.,hoi,had, only, expressed his personal opinion,■ without;com-, mitting his , colleagues. He- thankedv-Mr.-Weston and Mr. Jackson for their very l kind motion. The directors had already- receivod notice of it, and ha'd discussed it".very fully. They had come to tho * unanimous , opinion; that the time was not .'opportune:, for,.tho; alteration proposed. They very: much appreciated the kind words that had boon .uttered, and wished to say that, whether they received £2000 a year or £3000 a yeai-j they would continue to give as.,good, service as they had in the past. (Applause.); Ho asked Mr. Weston to withdraw his- v The motion was withdrawn. • Thanks. . ■ On tho motion of Mr. Weston, "a vote of thanks was passed to Mr. Callcnder (general manager) and the staff. . Mr. Callendcr, in responding, rhaniieu wio directors and shareholders on. behalf of ; the staff for their generosity- in . regard. tft the Provident Fund. It was . most;'.gratifying ,to the staff to know of the kindly .interest'.'taken in their welfare. ./ ■. ! ■ Mr. Kebbell proposed a yoto' of tKinks to' tho Chairman and tho directors. This was carried unanimously;' ' HOPEFUL MARKET OUTLOOK. The Chairman, in acknowledging tho' com-, pliment,' said:."lf I may .be permitted; .toread due more short extract,.'.'l should,like,' before wo 6eparato, to give :you a.piecfe of ; .good news in tho shapoof a--portion-.'of a" report which has. just been ::received ' from tho manager of our ; produce; department in London.; Writing-to us undfer date April 15,. he-says:— '. : ■ . '.V

" '.Wool.—The course of mg/tho, past six months has been ; decidedlyunfavourable.' With comparatively "i'few-. exnil. classes of raw material h'avejbecome cheaper within that period, but' tho depreciation has probably in'-wool' than in any other'kind. : ..'Thp sluinp,. -it''is; admitted on all/lfands,- was entirely- due to : the Amorican crisis. If it' "had'iiot $een>f<jr; the .unfortunate' condition '.'of.' affairs' in, the ; States, trade hero and on the -• Continent throughout the current year-wpuld ; dpul)tless have I been active and - remunerative. Stocks -at. the beginning of the' sepsorr were-,neyer lighter, ■ and it; wAs entirely' owing ' to:'-'the favourable outlook that tboiprincipal; buyers operated so freely at high prices' in Aiis-. tralia. Never wero high 1 hq)ra'.sp completely dashed ..to the. ground. For. months past' buyers have been handicapped; by'-th'e difficulties theyhavo experienced..' cingthe dear wools they and; on which ..they are suffering iheavy, losses* Tlifiir. purchasing' powers' are', consequently o# a much more; -roduced' scale;; •formerly,and, it W hardly- .to be expected. * .that'-iilipy are in a mood to enter 'into .'r'fresH'.-'fconi-' mitments, especially while values are still further : declining. -.-'".m -j:., .-. " 'While the trade looks baqk,.to America as tho originator of all itis. ! recent troubles/ >it;. : at ;,tho same time,' looks '^rwardi-to!-relief, coming from the' sambf quarter ;.;at; ,yery, distant • time. Whether •, -thjs,'; tyo; realised it' is '.difficult td"?sayj:; : but ;.thefo;: aro signs that tho position in is-gradually improving. As further, progress towards recovery is made,vifr'is.'expected that wool will' be' one of-tho commodities, which woujd benefit. Stocks of-imported wool in the States are very - small,Vatidi' any . slight revival- in', the .'trade; wouJfJ ( : a£: v :onco ; ;dnvo; Americans .to ;this : addition to this,. the breds, has been adverselyVaffeetcdUbyP-'Arar".' selling' ,of - tops ; on : a 'someK(i^t,)l!irg9;^calei : , The weak state ,of the jjgajjyj; q§.< sisted'- . bearing ; . operations}- "and-'-t .severaldealers in;' Bradford have~s)een-rtakiiig- Juir. advantage l -of -. the. opportunity -„oif jted'.; H , Js T o jy' that _ prices, have / reached sj|ch a',.^ow r ;lgYel,, one is led to' the opinion, that 'nothing'. would ; suit, buyers better than that',"va'luesj.should' continuo,.abnormally low until,,they:'have/ser,; cured ,tho. bulk of thri suppliqs.'; com.ing'j.pn the market ■ in ; the near futuroV ' should - circumstances change" riney -j'rNvbuTd' doubtless-- become active'„ "''Meat.—Tho.-f season -has..been:;, Iaj» ( -'.in: starting." Mutton has metrwitli j a'-dragging' market for some time past,' b'ut'stho-idemand, .has lately improved,' thank? ;ift;,tl;o .r.eduqed, supplies of River Plate,- sheep,'' have been satisfactory. pected that the Fraiico-Britishi...ExKibition J , which is to bp held - in. : Loiulon i; .this,! yeai-j ■ .will. attract _ largo numbers of .people from many, quarters of the globe-to this-count'iy;; during tho slimmer.: Now/fZealantlf lahibi, is' much, to. tho fore--under 'dilferent^na'nie&=- : 'in the menu of most of our.ljptcls.;i»rid resiau-.' rants, > and . the : ' demand ' should 'prove,.moije. than .equal to the supply, ' which; i pwi'iig,' to. the dry weather in the Dominion,:'.is predicted'., to fall'short of that of . v:- : "I; am pleased to quote,''j'.thcsViiyiiws') speoting the market for wool arid; frozen meatf. as' they coincide so .'completely with' my .own>