THE CHAIRMAN'S ADDRESS.

Dominion, Volume 6, Issue 1615, 5 December 1912, Page 6

THE CHAIRMAN'S ADDRESS.

; . ; P RO|:|TS,GOOD v^-••■■■ ;■ -.': CONSEEy^TI^E;.Ppi/ICY ; I 'JUSTIFIED. ; :■:. Sir. Martiu.. 'Kennedy;-; chairman' of :' directors, i?aid:;:."This .being; : year generalvirieetingof'proprietors;>there ! is no statement, of accounts!.to''submit; to you , . The only actual.business to'be traris- ; '-.acted is tlieiiel.cctioni'of..' a' shareholders 5 • " representative'''on the', beard, and the •; 'declaration of■ an-interim dividends With ■ . regard to th'eriorriierii I 'have to state that j' , . the retiring director,- Mr. Williani' Wat- !.,. 6on, I •■'". there.;be'ing'.no oilier, candia.i;te, 1 have :. much pleasure*in-'ileclnrins Mr. Watson- ■:■' dulyelect&d.viJHe.liaS'MW/oc'cupied a seat. . on the. board' 'for'-some' ".eighteen.; consecii- ■ ..'■ tive years..-"■• •• ■:■'■■' ■■■'■':i'-.''■..■]['■ • ' : - '■■"•'' i "Though ad: accounts-are:.submitted,' J ". am glad to be able'ltd inform'>.'you' that '■ the profits for the half-year-ended Sep- : tember 30 last, compare favourably with ' , those for the corresponding period of'any j previous year. The interim, dividend has '■; therefore been earned; and; as we" judge from, present-indications that'the-results- ' of th'e.current half-year's" working. lire ; :' likely Ito- prpvo' equally satisfactory,;■' we ■ have noVliesitation in declaring the usual interim dividend.'"A.dividend at the rate '■ of 6 per cent, is declared accordingly; aud- ■•■'■ will be payable, in ..Wellington, to-morrow, : sth instant, and at branches on receipt >' of advice.V'"■;•'i> •" • . .-'.■■' ■-.',■;-.. Personal, i -'.•.'-■■; .; •'. : -' •■•■ "Mr. J. B..Reid/ who was absent fromthe Donniuon oii' -the' occasion pf'oiir lost' • , meeting,-returned in October, and we.were ; :. pleased -fo 'welcome'Mm back to his seat '■'■' oa the board. We regret,. however, that ho is nqt with\ us to-day, he haying .quite I recently resigned his position as a difec- '[■'■' tor. .I'JiavelMrr'iEeid's-.'authorityto say '■' that, resigning , from-the 'directorate; j--. ihe was-prompted by;a.desire:to opea the ■ 'way for the apppintmentun his : stead of' ' a director .devote -more' time to; ' .'the doties'v'of.the.position than, he finds- '; -.. it possible'to'give."' It 'affords meplea-;.--'sure-to say that Mr. Eeid has always -.-. ■ i taken a»keeu"interes_ti in'"the affairs of ! . the bank, and'his retirementiis a-rnatter ''-■'■..■■' of very great regret-to-his colleagues on ■ the board. He,' however, urged the , course 1 : he has followed as being ; the-best in the '.interests of the bank', and : the .Govern-' '■ ;ment have met his wishes and accepted ■ : his resignation, appointing in. his stead .'■■ our old colleague, andr'former : , Mr. 1 Harold Beauchamp, whom ; wo have ■.: much pleasure in welcoming among us, '■'■■.' again.to-day. .-.""'■• - ; .. .;•''■■'; "the'-Mon?y Market. ■ .;..,, ;'. .. "The■■ hardening: tendency;'Of the- money I, ■ market, whichi-licommented upon..-when '■ ■'•"••' I addressed- you':in,' June', last,. has..since ' been accentuatediboth'in the coloniesand : London, and, in view of-the conditions i generally,'it , '-has teen.'..deemed prudent ■ . to continue the pursuit, of' the somewhat conservative policy adopted early in the ■ year. At tlio same time, wo have met ■' the -legitimate requirements of our cus- ';■■■ tomersTarid have' given the necessary? sup-: ;■'■ port to the industries and trade of the ; Dominion. While'there Mie'/, of course, been cases ia wKich.-'we hive'deemed it - advisable to refuse accommodation ap- ■■'■ -plied for, we.;think'that,, on' the.whole, : ' our customers' recognise'' that we have !■:■ responded well \q Xamt applications.. i . "The existing state of . the.local money I' market brings home to'-ns.'very'forcibly, : the facility with :w(iicE';iiiiah'ciaK:_feohdiv v tions, change in theseJc'olb'n'iei'li.'lt is but / some ! eigh(ieen. months;ago .that my i ..pre- % - '"'•"' decessor, addressing you- from"this 'chaif (in June, 1911), remarked upon.'the;ab\mdi ance of money,available,v.and the.restrict- ;•- ed scope' for its.employment.' At the pre- ' sent time we are experiencing an exactly : '--'. opposite -state- of-, affairs.. The scope for '. employment .of money is- ,at; thei ..present !'- -time wide, and the money is scarce, and i.' .the demand fori.accoinmpdation,, though. i in most teases .'quite 'legitimate, is greater ' thanihe.'v.banks';.Jeel..fl;emsslyes,.'justified' .-'■. in satisfying. I-se.er nothing-in. the ,im-. : . mediate ouuodk to warrant an expectar' 1: ■ tion of an early return ;tp;..easier,,co.n-, ditions; -indeed, ■• there-are-not; wanting \ ■ indications; that an,feveh ,greater;, degree . of stringency.'inay lie ahead. i ./... _More Capital-and.Legislation. ll( ■ •' •■'TJa.der' the circumstances. Tithe board 1 (have of late been considering whether the , : Itime hasinot.-arrived ,to-propose,a>,"sub-. : jetantial increase in 'the..bank's capital. '■<■ IThe 'existing' capitulifation' of ;.the 'bank ' (was fined- by ,statute'lin.vl9o3;.' and we are [ (legally advised 1 that, without legislation, : (nothing of a definite character.can be '.-'■•■; (done byvehareholders in the direction of \ . lincrease^-r-We-therefore-think-it will-pro- ■: . ibably be desirable that steps should' be '.-■' itaken, in the next session of Parliament, K' io obtain authority for the shareholders ;to increase the capital from time to time, i as they may deem expedient, by resolu< ■ ,tion in general meeting in terms of the: : (bank's deed of settlement. There caa-.be' >- (BO doubt that, at the presont i iaccession of capital would be of great- ' Senefit to the .commercial and industrial; •■'■• anteresta of the Dominion, as it would* i -put the bank in the position, of being';: i'.'■• iable to afford financial assistance in ■many" ; . Iquartera where at present it-has to.be ■■refused. It would also undoubtedly be i ':■ (in your own intsrests.'ras it would en- '::;: able us to extend oui'ibonnectionsLand, f:. icement valuable and 'profitable'' , Telationi Jships. ; ■ ■ ' 'I "legislation, will be, neeessary : next ; -. 'rear if the .£1,000,000 f. r per qenfe guaran- ,:.• teed etock,'which matures on"' 'July "■ 19,' 1914, is to be renewed under the guarantee of the New Zealand Government. :^Ve . therefore propose, w.ith'yo.ur approval,.to snake application to '»the Government, ■ iwquestinfir them to introduce,' into nest "'.-jeession of Parliament, a Bill conferring f [upon- shareholders power • to increase tho ■;■ (bank's capital. ;.. ... ...- ~ ... .■.--.-... ... '■{ Trade arid Industries. '"Notwithstanding the stringent flnan•clal conditions, the state of the' Do- . (minion's trade and industries appears to ; i be prosperous. The season bids fair to be |an abundant the price'of our , j staple wool—are high-. i :ly satisfacforyl , ". There'-'-.is every indica- : ition that:the.'prp^"ects:;.f ; or.,.wpol are ex-. ; '.oeedingly'':brißht*.for-'-itlie'. coming eeason. :.. 'The imprevjefflentVtiiat:Tias recently; tuk«n iplace intthe hemp',market will; 'if ■ main;tained, no'i':iilbubt,,!Tesulf in ; ' renewed'' ac-' ' itivity in ttiei'flax'i'nanstry. The recentlypublished for the year 'ended September' 30 last, show a gratify- ■ 'ing expansion' in the volume of'our'ex- ' ' ports for the year, ,the,.figurea .beingr— . ' Exports year ended— .'. September 30, 1911 '„..'...... '^819,912,656 September SO, 1912 .......... 20,714,595 ■ Incirease .i..'..:....«. ' ' '' "This movement bids fair t6_ continue" during the current year in an increasing 1 ratio, the figures of our principal exports for the ; month of October,, compared with '.- the coiTesponding month . of-. last .'year, showing a very encouraging growth,. i namely:— . - ' October,. 1911 - '^614,007. : Octobsr, 1912 .:....'...'./.> ..-953,202... ; '■'- Increase ■ ..I. M .". "On the other hand, however, theim- ,'■ »rts for the year have shown a more. l r :han coiTesponding increase, the figures : ns follow:— J [mports for the yeaT ended— f&pteinbsr- 30, 1911 ;-.' ■ Septembsr 30, 1912 19,615,291;:;.': I • Increase '£1,003,331./.. ]■ . Why Money Is Scarce, • 'Tor -many years to come, New Zealand ; rill bo in a state-of d9veloDment tl .fls.d..

consequently dependent to a large, extent ujon| cheap loan money. In ordinary times, the. savings of'the people, and tho borrowings of the Government and of local'bodies from abroad, enable this demand to'be met; but, owing to the general Unrest in Europe, to labour strikes, and war clouds, with lately the actual outbreak of hostilities in the Balkan Peninsula, our principal'source of supply—. London—has'.been practically closed to us for some months past, and it will probably be some time yet before the loan propositions' of any of our local bodies will meet with a favourable reception in the London..market. The States pf.tho .'Commonwealth' , of Australia are.in the 'same position as ourselves in this respect. , .So' long as' this condition continues, it ] behoves all local bodies nnd other bor- , rowers, having projects of expenditure on ; hand, to. make their financial . arrange-' ments beforehand. '■ : The Chairman's Movements, .7 "It is no doubt'known to many of you' that I purpose paying a visit to the Old Country, leaving' Wellington this month. I expect to return to New Zealand m soven or-'eight-months. During my stay in London 1 will 1 have the opportunitj- of further familiarising myself with '_ the -bank's business there. I will ba able to .confer with the shareholders there on the matters above referred to, and I :hope to come back, furnished with fuller knowledge than I at .present possess, to assist tho board in its deliberations on the important questions affecting the interests ; of the bank and those of the shareholders which, as I have already indicated, may fall to be dealt ;with next year. "In view of the probability—the almost v certain probability-of banking legislation next' session, I will consider it my, ■ duty t° be back in New Zealand when . that is before Parliament. As there are only two shareholders' directors it would -. ba unfair to'my colleasno to leave-him alone at that time. In., consideration- of ; the number of. years' for which I have . had the honour to be your representative ■ I should consider I was fnilinß in my , duty if I failed to be present on,an ; occasion of the sort." ■ .]