THE BANK OF NEW ZELAND

Dominion, Volume 3, Issue 846, 18 June 1910, Page 3

THE BANK OF NEW ZELAND

; .'CHAIRMAN'S"IMPORTANT SPEECH. CONTINUED PROSPERITY AND- PROGRESS. :; HIiHER DIYIDjEND NEXT YEAR. ' '. IS'THERE ■■A LACK..' OF -CONFIDENCE.?

The annual' meeting of the Bank of •New Zealand was,held yesterday. Mr. Harold Beauchamp (chairman of directors) presided, and was supported by Messrs. W. H. Quick, Martin Kennedy, W. Milne, W. Watson (directors),' A. E. Mills (inspector); B. M. Litchfield (chief auditor), and eleven shareholders. Tho chairman, in moving tho adoption of :tbe report and balance-sheet said':—"Onco. again it is my pleasant duty'to'place before shareholders a report which,'though showing profits to le.dealt with somewhat lower in the aggregate than.those of recent' years, cannot but be regarded as very gratifying,' and a balance-sheet which carries on-its.face, the evidence of a satisfactory financial position, and reflects in almost every detail the bank's continued, prosperity and progress. A comparison of the figures with those of a year ago gives the following results:—The capital of the bank still , stands at £2,000,000. For the . two years, prerious to the ono now under review the reserve fund was added to iy, £200,000 per annum. Tho reduced profits for the' year have.'not admitted , of our making quite as large an appropriation on' this occasion, but we have been • .'able :to set : asido £150,000—an amount which, under' tho circumstances, iwe consider.quite satisfactory. The reserve fund after this addition will stand at £800,000.. With' the/ balance proposed to be carried forward, after payment of dividend, the reserve fund and undivided profits will amount .to upwards of £864,000. .'■,'■■' "Notes in circulation, which stand at •£919,329, show, a slight decrease as com-.-parodwith tho previous year. "Deposits show the substantial ; increase of £2,140,448, the total under the heading, of' deposits standing at £H,687;680. To larger Government credit balances' is due the major portion of the increase,. but both fixed and free public deposits show very considerable expansion. Fixed deposit rates have been lowered during the year, but, notwithstanding this, the volume of the deposits continues 1 to he well maintained.

• "Bill payable and other liabilities are ' less by £344,502—the decrease being mainly in the bills payable and of do special. significance.'.. Cable- transfers ■are increasingly used in the making of .London payments, and consequently^the amount of drafts at usance sold is a . Bteadily-decreasing quantity. ■ * " Assets Reviewed. , '■ ■'"Turning to the assets side, a strong : position is ' disclosed..'. The increase" in deposits rendered] advisable'a corresponding increase in cas)i assets. ■' Coin and cash balances are greater by . £388,688 than at March, 1909: money, at short call,' Government.and other securities in London, exceed last year's totals by £2,028,610. Bullion also shows an increaso of £30,108., I may say that the totals under this.heading, . plus the amount of bills receivable and investments in the colonies, equal 65 . per cent., of the total liabilities to.the very strong financial position.' "Bills receivable, in London and in transit, - stand at £2,626,561—an increase of i £454,859.' , The greater volume of produce bills, incidental to the expansion in the Dominion's exports, and enhanced values of same, account for this.' ~"■ ' - : ■: "Investments in the colonies stand at £1,144,7407 ; -a 'slight increase on last year's total. " ' . "Bills discounted are less by £247,272, and other advances by £665,159, than at March, 1909. The growth in the Dominion's exports and the favourable prices obtained for, the majority of our staple produots haee rosulwd m debtors being able .to largely reduce their ■ obligations to the bank. The shrinkage in advances and the increase in'deposits show a very substantial improvement in the position of the public with the . bank, the result of the cautious • policy '. generally adopted throughout the country during; tho financial stringency of the previous year. Assets Realisation Board.' • "Further sales of the Assets Realisation .Board assets have.been effected during the year, the movement of the accounts being shown in the following ■' tabled- .■■■■:■' ■■'■ At' At . March 31, March 31, ; ■•■.-.■■■ 1909. 1910. ■ Balances owing by ' ' purchasers £336,931 £286,899 Other assets un-' realised .......'.....• 66,778 46,302 ' . £403,709 £333;291 No reasonable opportunity will be lost of disposing of the balance of the . properties. ■ Landed Property and Premises. "During the last few years tho growth of the bank's business lias necessitated tho. erection of now premises at a number of points, and considerable additions and alterations to existing pre-misc-s., Landed property and pre-

mises now-, stand at £359,700—an increase of £13,186 on last year's figures. The bank has, since March 31, completed the purchase of tho freehold of the Mercantile Bank's chambers in Collins Street, Melbourne, ami tho business, of our Melbourne branch'will presently be transferred thither. We regard the acquisition of this property as a very satisfactory transaction, anil believe that tho better position our office will in future occupy in Melbourne will result in an increased and more profitable business being transacted by tho bank in that city. Profit and Loss. "After paying tho £40,000 interest on guaranteed stock and making all necessary appropriations, including provision 'for the bank's annual grant to tlio Provident Fund and bonus to tho staff,' as well as allocating the sum of £15,000 in • reduction of bank premises and furniture accounts, the net profits amount to £259,385, as compared with £313,150 last year. After adding tho amount brought forward from last year (£60,993), and deducting tlio amount of interim dividend of 5 polecat, on preference and ordinary shares paid in December (£50,000), the sum available for .distribution is £270,354, as against £317,248 last soar. Tho directors now propose to

pay a further dividend of 5 per cent, and a bonus of 21 per cent, on orclir.ary shares (making 12J- per cent, for tho year), a'i'3 a further 3J.pcr cent, on preference shares (making 8$ for the year). .The total amount distributed to shareholders for tho year will therefore be £106,250. Of the balance remaining it is proposed to transfer. as already mentioned, ■£150,000 to the Reserve Fund, and to carry forward £64,131. ' ■ ■ "In view of the considerable reduction in advances and "discounts, and. of the increase in the deposits, a shrinkage in tho profits was only to bo expected. The position in regard' to certain sources of revenue, usually profitable, was also unsatisfactory during the year, and tho bank was therefore working in. the face 'of adverso conditions. - Taking all these circumstances, into consideration, we have reason to be well satisfied with the result. Tho year upon which we have just entered has opened well, and, given a continuance of favourable conditions, we hope to be able, when we meet to consider the' next annual accounts, to place before you a report showing somewhat better results. ■ GENERAL REMARKS. DISAPPEARANCE OF STRINGENCY. INCREASE OF EXPORTS. "When addressing you a year ago, in the course of my remarks I said: 'It would be idle to deny that a mone|.tary stringency is being felt in Now Zealand, and it is most. disconcerting to have to admit, in view of the long period of prosperity — covering practically fifteen years—that a sudden drop in values of, our primary products for one season only should cause such a financial disturbance as wo have been experiencing.. The sudden fall in values, however, was not wholly responsible for this. If we seek other causes, we have to recognise that thoy 'will be found in the inordinate prices paid for land and general extravagance amongst all sections of tho 'community.l , ' "To-day tho conditions are reversed: .the mpnetary stringency has disappear-* cd, and wo have instead an abundance of loanable credits. The cause which, led to the stringency of a year' ago' was, in the main, the sudden fall in . values of our primary .products, and tho causo for the present plenitude of money is-the rise in the values of those products and the larger, volume.of production. The export returns, for the year ended March 31, 1910, compared with 'the figures for the previous year, show this very clearly. The figure's are worth 'recording, and they are'as follow:— ' Tear ended 31st. March: 1909. 1910; Increase. . '.£-.< £ " £ Wool .'.... 5,537,861 7,941,655 2,403,791 Sheepskins . .... ' 527,710 , 703,180 175,47,0 Frozen meat... 3,302,725 3,485,256,. 122,531. Dairy ■ produce 2,287,054 2,820,568 . 532,914 Gold '...... 1,942,968 1,992,189 49,221 Tallow 526,952 6M,046 137,69 i ,Kauri gum'... 4-14,309' 540,729 96,420 Hemp 310,304 373,145 62,781 Timber 366,524 352,840 * Grain' 140,751 859,967 713,216 Other N.Z. Produce 1,143,827 1,556,261 «2,434 ;' '■' £16,597,645 21,290,436 4,692,791 •Decrease—£l3,6B4. . The only item in the list to show a shrinkage is timber,, and the decrease is very small, amounting to only £13,684. Wool. ■ "Of the total >ain of £4,692,791, wool alone accounts for- £2,403,794, equal to more than 50 per cent. This .gain is due both to increased output and enhanced prices, the figures approximately being as follows:— Total Average ■ ■ Value, per bale. Mar. 31 Bales. £ . £■ 1910 ... 524,652 7,941,655 15 1909 ... 486,141 5,537,861 '11 2-5 Increase .38,511 £2,403,794 £3 3-5 Tho values are those at the port of shipment, and are extremely interesting. Taking a period of five years, tho figures arc instructive as showing the wide fluctuations to • which this commodity is subject:— March 31. ' lbs. • £ 19.06 ... 144,145,196 6,028,093 1907 ..„ 165,227,628 7,529,188 1908 ... 157,951,854 6,003,436 - 1909 ... 179,674,074 5,537,861 1910 ...' 204,358,824 7,941,655 Dairy Produce.

•"Dairy produce shows an increase of over half a million sterling as compared with the previous year, and this industry has ili recent years become a very important factor in our export trade. The 'values of the butter and cheese exported during tho past five years aro instructive, and are as follow: — Butter. Cheese. Total. Mar. 31 £ £ . £ 1906 ... 1,443,254 205,084- 1,708,368 1907 ... 1,522,113 449,676' 1,971,789 1903 ... 1,338,393 792,318 2,130,711 1909 ... 1,422,198 865,456 2,287,654 1910 ... 1,634,864 1,185,704 2,820,568 "In four years this industry shows an expansion of over one .million sterling, but about half the amount was. gained in the last year. A fair'proportion, however, was obtained by advance iu values.Frozen Meat and Grain. "At one period of the past year, tlio frozen meat trade was in a very precarious position. The dumping of largo supplies on British markets at a time when the consumers were uiiabln to afford even the normal price proved disastrous. Values -.declined enormously, resulting in big losses to nearly alt sections of the trade. At the samo time, it must be admitted that the low prices at which our meat was pushed for sale secured for it a splendid ad-* vertisement,. and the results are to be seen in the higher range of values that have ruled since about' October last. Notwithstanding the adverse features referred to, the year closed with a substantial increaso in tlio value of tlio

oxports in this line. Continuing tho five-year comparison, wo obtain the following:— I Boof. Mutton. Lamb. Mar. 31. £ £ £ 1906 ... 181,519 1,09-1,107 1,158,591 1907 ... 350,954 1,345,400 1,430,122 190S ... 420,205 1,230,451 1,457,373 1909 ... 455,012 1,209,590 1,617,934 1910 ... 546,392 1,042,727 1,803,640 , "The last year's increase, it will bo seen, occurs in lamb and beef. "Tho export of grain, whole and ground, has risen from £146,751 in 1908-9 to £859,967 in 1909-10, duo to the more favourable harvest.

IMPORTSREDUGED. , . TRADE BALANCE FAVOURABLE. REFLECTED IN THE BANKING FIGURES. : "While the exports exhibit so considerable aj)d satisfactory 'an expansion, it is equally satisfactory to note that tho imports have been materially reduced, making the' trade balance a distinctly favourable one. Including reexports and . specie, tho -total value of the exports for tho past financial year amounted to £21,491,809, while the_ imports for tho same period totalled £15,353,581, showing an excess of oxports over imports amounting to £6,138,228, sufficient to pay the outside obligations for .interest, etc., and also to ■meet any" deficiency that may havo arisen in the previous year. This favourable trado situation has naturally been reflected -in tho banking figures for the year, and the change that has resulted may be seen in the aggregate figures of the fixed and free deposits (excluding Government) on the ono hand tho advances and discounts on the'other for a series of years. The figures are as under:— ■ ■ ' , Freo Fixed Total Mar. 31 Deposits. Deposits. Deposits. ■"£- £ ■ £ ' 1906 9,712,019 9,791,160 19,503,179 1907 11,345,582 9,700,511 21,044,093 1908 11,534,879 9,553,694 21,088,573 1909 10,100,938 9,983,942 20,084,880 1910 11,585,410 10,570,352 22,155,762 i "Last year the. total deposits were less than in the previous year by £1,003,693, whilst for tho year just closed there is an increasq of £2,070,882 —an improvement that is almost as.tonishiug and very gratifying to tho whole community. : Advances and Discounts. "The advances and discounts, compared in tho same- way, show as follow :— , Advances. Discounts. Total. Mar. 31 . £ £ £ 1906 13,991,822 2,143,483 16,135,305 1907 15,551,547 2,002,808 17,554,355 1908- 18,542,310 2,095,795 20,638,105 1909 ''18,186,909 2,132,562 20,319,471 1910 16,178,128 1,815,317 17,993,445 "Thero is a substantial decreaso in the advances and discounts, clearly proving that tho customers of the banks have been. able to meet their past obligations to' the institutions. Other favourable indications are that the note circulation, which decreased in 1909, has sinco expanded, whilst tho returns, of tho Treasury for the financial year show a revenue of £9,238,261 or £237,076 more than in tho previous year. A REMARKABLE RECOVERY. ITS EFFECT ON LAND VALUES. . GREAT ADVANCE IN DAIRYING LAND. "The remarkable recovery which tho foregoing facts and figures illustrate and emphasise has- naturally caused land values to bo maintained at a high •level, ■ andj in somo cases, to advance; and the unprecedented advance in tho values of dairying land in. particular lias been the causo of considerable concern to bankers and financiers. It has suggested itself to mo that 'sqmo authentic details of what is possible under modem conditions of scientific .farming a.nd with the use of-the-latest dairy machinery would be of interest to you. The best results obtainable in New Zealand, of which reliable information is available, is the annual return 'of, approximately, £11 per acre. This has been achieved on tho Waimato Plains, near Manaia, on a 32-acro farm with 24 cows, the actual returns from which, for milk alone, were £360. If from this two-fifths be deducted as the cost of labour, thero is a not result to the land-owner of £216, equal to £6 15s. per acre, or £9 per cow. This splendid result is the exception rather than the rule, for the total return from cows kept for dairying in the Dominion (536,316) only amounts to say, £4,080,000, made up.thus:— Butter exported for year ended March 31, 1910 ... £1,634,864 Cheese'do., do., do. : 1,185,704 Milk, butter, and ■ cheese ' • ' ' for local co&sumption, say 1,257,927 Or a total of .' £4,078,495 If from this an average of two-fifths bo deducted, tho net result is, approximately, £2,448,000, or about £4. 10s. per cow, or just about one-half of the

best results which I havo mentioned. But we cannot take it on the favourable basis of £9 per icow,' for a. recent investigation has shown that a largo percentage of the dairy cows of tho Dominion, do not average a gross return of £8. Indeed it is on record that 'some large herds- have given a grass yield of less than £4 per cow. There is a wide margin of difference between the extremes, and it is quite obvious that there is great scope for tho scientific expansion of tho industry. Testing of Dairy Herds. "It is a question, therefore, whether tho time has not arrived for tho Government to take aji activo part in a wholesale way in tho matter of herdtesting. A beginning has already been made, which-appears to justify Government intervention, and with proper safeguards there seems no reason why herdtosting should not te carried out on an extensive and comprehensive- scale. The milking machi.no and'tho low rato of interest at w-luch money can.be borrowed from tho Advances to Settlers Department, havo also been factors in enhancing the price of dairy land. The rise in tho. prices of our dairy' product is, of course, mainly responsible for the higher land values in dairying districts. I have' had prepared a table showing the. annual prices paid for eleven years at one of our loading North Island checso factories. Theso show an increase- of over SO per cent, in tho price paid to the farmer for his butter-fat, the basis on which all milk is paid for;— ■ Per lb. of liuttor-fat.

For tlio. fivo years ejided Juno, 1908, the average prico works out at 10.84 d. »er lb. of buttor-fa-t, and for tho ton

years to~ June, TLOOB, the average is 10.35 d. per lb. The lowest price paid in tho ton years to 1908 was 8.2 d. in 1904, and the highest was 12.8(1. _ in 1907—a margin of difference amounting to 4.6 d. per lb. Danger of a Relapse. "It is true that while the price of all farm" products for the past half century lias shown a more /or less steady and persistent decline, the prices of dairy products of high quality havo shown an almost- equally persistent rise. Nevertheless, there is ever present the danger of a relapse, and it is / quite pos'sible for, tho price of butter-fat to declint to the lowest level of the ten years as mentioned, which would represent a' fall of about 33 l-3rd per cent, Such a decline would canse very serious trouble to farmers who have paid high prices for dairy land, and who have not brought their herds up to thejughest possiblo standard of productivity. The question of the immediate future is whether more money is to go into the value of the land or more in the improvement of the milking herds. In my opinion, and speaking broadly, the price of dairy land is on tho averago quite high enough at present, and to justify same greater attention must be devoted to tho feeding and breeding or high-grade stock. This work will take timo and money to accomplish, but id must be faced if our dairy farmers aro to continue to enjoy prosperity. Wanted: Cheap Land. '. "A year ago I said, 'What we want in New Zealand to-day more than cheap money is cheap land,' and I am constrained to repeat that. It is cheap land that is attracting immigration to other countries, and if we are to secure an increase of population by immigration we must be able to offer to the newcomer some advantages. i\otwithstanding the severity of the Canadian climate and tho many drawbacks to farming there, people are flocking to that Dominion, attracted mainly by the opportunity offered of securing land at an exceedingly cheap rate. . It is becoming a difficult matter for Now Zealand to keep its farming population, for many aro leaving, and have left, for Queensland and other parts of Australia. The Government ' could, no doubt, do a great deal by. making available for settlement the Native lands now lying idle; but I will not pursue this subject further, as I dealt with, it to some extent in my remarks last year. BANK-.OF ENGLAND RATE. A SINGULAR ADVANCE. ENCOURAGING SIGNS.. "As you aro aware, the Bank of England rate (reduced to. 3i per' cent, on June 2, and to 3 per cent..on June--9) was advanced to 4 per cent, in nudMareh, a movement that may be said to be singular, because, it is about 32 years since- a similar movement was recorded. It is usual to see the bank, rate reduced in the first month of the New Year and to reach its lowest point in June. The cause of tlie advance was apparently the heavy borrowing on the part of the British Government and the demand for gold from foreign countries. However," the undertone of tho money market has been iheerful all through, the Stock Exchanges have been keeping busy, tho capital applications have been on a large scale, whilst .British trade shows that there is a decided improvement in the industrial situation, and these are factors that aro most encouraging to Mew Zealand. . >

A Continental View. ."How the situation is viewed on tho Continent of Europe is shown in tho report of the Directors of tho Drosdncr Bank,- which states: —'The first two months of 1910 havo ushered in a somewhat quieter state of business, and it ii) probable, that international comnierco will ' continue to exhibit ■ a certain amount of reserve until'tho economic conditions and measures of domestic policy, both in the United States of America and Great Britain, shall havo' settled down. If, however, as may bo assumed; the world is spared political complications of a serious nature, it seems probable that wo are on the threshold of a prolonged period of easy money/leading up to n further manifestation of tho spirit of enterpriso which will affect not only trade and industry in general, but also the building trade, which has for so long been dormant. The favourable position of, agriculture, wo are glad to say, in no small degree contributes to this prospect. Although we do not expect to see in the near futuro a renewed high tide of industrial activity or a generally pronounced upward movement of prices on our bourses, we have no reason to doubt that the capital available in banking business will find suitable outlet for lucrative employment.'"

THE POSITION IN NEW ZEALAND.

ABUNDANCE OF LOANABLE CREDIT. * BUT WANT OF CONFIDENCE, "In New Zealand to-day there is an abundance of loanable credit,, and yet, I am bound to say, thero is a feeling of want of confidence prevalent in the community. Money is not flowing into thoso channels .which should , exist in every new country, and which do exist in Now Zealand. The financial situation is infinitely hotter than it was a year ago, but that in itself is not. sufficient. 'We want the capital available in the country to seek an outlet in industrial and ■ other enterprises. Tho spirit of enterprise is, however, wanting. To what) this unsatisfactory state of things is to be attributed is a matter . for speculation and conjecture. Politics are of course outside! the province of an address such as this, but it is quite within the scope of my remarks to note tho existenco of a condition of affairs so detrimental to'tho development, progross and financial .prosperity of tho Dominion, leaving to others the task of seeking out tho cause and applying the remedy. New Zealand is a nation in tho making, and requires all the capital it can command for its development. It should .be careful to do nothing to make capital shy of entrusting itself within its borders.

Canadian Banker's Opinion,

"In this connection lot mo- give you a short extract from the speech of tho vioe-prosident of the Bank of Montreal to tho shareholders at tho last annual meeting on December 6, 1909. He said :-r'Tho most important change from last year in the statement submitted to you is the unusually largo iucreaso in deposits,' amounting to thirty-six million dollars. Part of it is temporary pending largo. payments in. connection with special transactions; part is tho natural increase from depositors as a result of tho prosperous condition of affairs in tins country; hut the largest portion of tlio increase, arises from lnoiioy brought into Canada from other countries. It is quite' possible that if tho apprehensions ex-, pressed in many quarters as to' tho consequence, of the now methods of British taxation are realised, deposits from tliis last source may bo still further enlarged. It is very important, therefore that nothing should bo dono in Canada by injudicious legislation, the exploitation of doubtful enterprises, or otherwise, to stop this (low of capital.' "These remarks might very appropriately bo incorporated in tliis speech

as equally applicable to the Dominion of New Zealand, and with that observation, I pass from the, subject. THE DIRECTORS. N.Z. AND LONDON BOARDS "As most of yon ' arc aware, Mr. "William Milne and I were reappointod hy the Government directors of tho bank for a further term of two years, as from April 1 last. In. December next, Mr. William Watson—one of your representatives—retires, and lie intends offering himself for re-election. "ion- will notice that our colleague, Mr. James B. lleid, is not with us to-day. Ho left tho DominioJi for Europe in April last, but is expected to return hither towards the close of this year. During his residence in London, he will be. associated with our board in that city, and I havo no doubt that both ho and the members of that board will profit by , the interchange Qf ideas on colonial and English banking and other matters. AVo desire to again place on record our appreciation of the unremitting care and attention devoted to the bank's business by tho London Board of Directors. The Staff. "Our general manager, Mr. William Callendar, is absent from Now Zeaon well-earned furlough. When in England lie will make a thorough inspection of our London branch,'.and report fully to tho Head Office Board. We look for his return to AVellington in November next. Meantime, his duties are being performed, to our entiro satisfaction, .by Mr. A. E. Mills— ono of our' senior inspectors—who possesses a wide and intimate kn6wledge of the ramifications of the bank in all its branches. It is gratifying for me to again, testify to the able and loyal manner in which the staff in New Zealaiid, Australia, Fiji, and London havo carried out' their responsible duties, and I feel confident you will endorse tlieso remarks by extending to them a hearty vote of thanks. As a .tangible proof of appreciation, tho board lias already paid tho staff a bijnus of 5 per cent. THE BANK'S JUBILEE. HOW IT WJLL BE RECOGNISED. "SLIGHTLY INCBEASED DIVI- ■ DEND." "Gentlemen, 1911 will be the jubilee year of tho bauk. ( Now, assuming that tho profits of the'bank for the current financial year can be maintained at the samo level as that of liit year, wo ought to .be in a position to show in our next balance-sheet -tho Reserve Fund and undivided profits at not less than £1,000,000. ' This, in my opinion, would justify the directors in recommending that such an important event as the bank's jubilee and tho creation of so substantial a 'Reserve Fund should be signalised by the payment of a slightly increased dividend or bonus, say "to the extent of 2i per cont. This indication will, I trust, inspire you with hope and confidence as to the future. "I now formally move the adoption of the report and balance-sheet. If this, resolution be affirmed, the dividend and bonus proposed—namely, 3f| per cent, on preference shares,' making SJ per cent, for the year, and 7,\- ]>er cent, on Ordinary Shares, equal to 121 per cent, for tho same period, will bo payable in Wellington on Monday, 20th instant, and at branches on receipt of advice."

OTNEft SPEAKERS.

MR. WATSON ON THE OUTLOOK. PIONEERING STAGE PAST. Mr. William Watson,- in seconding .tho motion for : the adoption of tho report and balance-sheet, congratulated tho shareholders on the result for tho year, which enabled £150,000 to bo added to the reserve fund, besides paying the same dividend as last year- lie desired to congratulate them still more oiiHho prospect held out by the chairman of what was likely to be inaugurated in 1911—the jubilee year of tho bank. Speaking for himself, he expected that tho ordinary shareholders would next year rocc ive 2 J per cent, better return on their shares than they did now, and the expectation was not without a tangible foundation. By a long course'of retaining profits, tho position of the bank had. been made so strong that the shareholders were entitled to expect what, after all, would only bo 3 per cent, on the £16 13s. 4d. which each sliaro had cost, and which cost hntl been used to benefit in oilo way or another the- people of this country. Pioneering new country generally had its ups and downs, and the bank had had adversity as well as prosperity. But fortunately, the adversity is of. the long past, and with the developments of the..particular kinds of farming for which the various parts of tho country were fitted, and a truer knowledge of the values, of landed and , other securities in the Dominion; the business of banking had steadied down to what was beyond the pioneering stage, although care and ability wero always necessary. That tho profits for tho year ended March 31, ,1910, did not equal those of tho previous year, need not cause llio slightest uneasiness, the causes being patent to all. who have scanned the quarterly hanking returns, the imports and exports of tho Dominion, and tho quotations for money in London. Indeed, tho directors could estimate results pretty closely as the months went by, aiul a writer in a London financial newspaper, knowing nothing beyond the printed returns, gauged the drop in profits fairly well before the balance was strnck. Use of the samo intelligence would reveal that, so far as the current year had gone, there was an improvement on the last; tho year ended March, 1909, was an abnormally profitable one. "1 entirely concur with the chairman in his ■ statement regarding the regrettable want of confidence which exists amongst the business community," continued Mr.' Watson, "and the lack of onterpriso in developing tho resources V tho Dominion. . He, of course, does not include agricultural or pastoral affairs, nor do I, hut as regards most other enterprises, tho matter is beyond doubts Surely, however, the causes effecting a state of' things so adverse to the true interests of all must ho sought out. and, ere long, removed. "I ain again before tho shareholders for re-election as one of their representatives on the board of the bank, and I trust to have the pleasure of obtaining a renewed mark of your confidence at tie meeting in December next, and of occupying during the bank's jubilee year the seat 1 have held since 1894."

MR. ICEBBELL AS CRITIC.

■ VARIOUS SUGGESTIONS. Mr. 0. M. Kebbell, speaking in support of tho motion, remarked jocularly that tho speeches of the present chairman and his predecessors reminded him of nothing so. much as hashed mutton. Shcop wero tho principal feature, and the subject had been hashed and rehashed regularly for nine and forty years. Laughter). He congratulated tho directors on the profits of the year. Tho dividend was a little on tlio'conservative side of the house, and that was strange, when there were so many liberals on the board, but after what tho chairman had said as to the dividend to bo caid nuxt year, they would

put up with it. He suggested that tho item "4 per cent, guaranteed stock" on tho liabilities side of the balancesheet should be eliminated from future balance-sheets, and suitable arrangements being inado in tho matter. Ho noticed that the expenses of the bank had increased by over ££000. Much of that no doubt was due to extra taxation. The chairman: I foreshadowed that last year. Mr. Kebbell went on to say that ho thought the balance-sheet should show how much of theso extra expenses was duo to increased taxation. Ho'wished next to tread on what might bo called tender ground. Tho bank, before its reformation, was run on charitable lines rather than on business lines rather than on business lines, there would havo been no need for the reformation. He had, however, seen recently two accounts in which the bank figured as a creditor for' large sums of money without security. Was the bank showing a tendency to revert to its former self? He'noticed that one of tho instances which be had mentioned occurred in the north, where it was understood that debtors ceased from troubling, because they found financial institutions ready to- befriend them. Ho would rather havo the bank making a little less profit than see its name figuring in connection with bankrupt estates. THE CHAIRMAN IN REPLY. A CAUTIOUS POLICY. Mr. Beauchamp said they were always pleased to have Mr. Kebbell amongst them, because he liked nothing better than analysing the balance-sheet. In regard to tho '4 per cent, guaranteed stock, he (the chairman) had often referred to the date when it would mature —the year 1914. Long before that time came, the directors would carefully consider what was to bo donein the way of renewal or otherwise. It would be quite improper for him to give any indication at present as to what might be done m tie matter. Mr. Kebbell was right in surmising that the increase in the bank's expenses was largely due to extra taxation, but the balancc-siheet already practically gave tho information ho had asked for. "Rates, taxes, telegrams, and postages" were set down at £49,687 6s. 6d., and in order to find tho amount of rates and taxes it would only bo necessary to deduct tho cost of tho telegrams and postages. In regard to the times of safety in business, the bank had been following a particularly cautious and conservative policy. It was obvious .that so huge a business, could not be carried on without romo losses, but the losses were insignificant in proportion to the profits. Referring to the CS.S-2S mentioned by Mr. Kel> boll, the chairman said that in ono instance the amount owing to the bank had been paid-off. The bank had been wrongly mentioned in a local newspaper as an unsecured creditor! It was fully secured. The other case mentioned by Mr. Kebbell had been investigated at Auckland by himself and a colleague, and they were satisfied (that the bank did not stand, to lose a single sixpence by it. In this instance also the bank was fully secured. In fact, they considered tho security was equivalent to 60s. in the pound. (Applause.) The report and bala-nce-shcct were adopted. THANKS. Mr. J. B. Harcourt moved a voto of thanks to the staff for the able majilier in which they had performed tlioir duties during the past year. . This was seconded by Mr. F. Dyer, and a brief response was made by Mr. Mills (inspector and acting-general manager). MR. KENNEDY ON "CONIMDENCE." DIFFERS FROM THE CHAIRMAN. 'Mr. Martin Kennedy, in moving a voto of thanks to the chairman, said, with a smile, that if he did not speak some of the- shareholders whom he represented on the board might think he was dissatisfied with tho chairman's forecast of an increased dividend next year. He assured them that ho was entirely .pleased with that part of the chairman's speech. The question whether there was a want of confidence, as asserted by the chairman, was one that verged upon politics and was debatable. Bankers were not agreed about it, some of them saying that there had been a want of confidence, but that it was passing away. The question .also arose, as to whether it was tho bankers or the individuals outside who were lacking in confidence. Surely there was an abundance of peoplo who were prepared'to taken money if they could get it, and to spend it. As to jvhether confidence was affected by legislation, that was another matter. If the prico of land was too high, surely that was a liiattcr of supply and demand. The Government could not encourage people to come here by offering land, as was done in Canada, becauso the amount of land in this country was not such as.to enable this to be done. He was not in accord with tho chairman's expressions touching want of confidence. There was abundance of confidence, but recovery took some time. He did not see how tho'industries. were being discouraged unless jt was by the labour laws, and, speaking as.a large employer of many years' standing, he would rather havo the labour laws than the strikes, which were the only alternative. He would not like it to i;o abroad that tho board unanimously endorsed tho chairman's views as to want of confidence. The chairman had done excellent work, and they Tinly differed on minor matters. Shareholders should understand that differences of opinion on the board were permissible,, and the bank was not run by any one person BOr even bv a majority merely, but thcro was free discussion. The voto of thanks was seconded by Mr. Kebbell, and-'carried with applause. Mr. Beauchamp, ,in thanking . tho meeting, said Mr. Kennedy was 1 quiteright in saying tliaj; tho freest discussions took place at the board meetings, and tho bank was not. a one-man institution. It was run by the board as a whole. Tho meeting then dispersed.

(1. Season ended Juno, 1898 ... 7 71 9 ... 8.8 „ » >. • 1900 ... 10.18 „ . „ „ 1 ... 9. 2 ... 9.95 „ » ., 3 ... H.4 „ „ 1 ... 3 2 ;, „ l „ 5 ... 9.2 „ „ C ... 12. „ „ „ 7 ... 12.8 „■ „ „ ■ 8 ... 12.