THE WAR AND TRADE

Dominion, Volume 10, Issue 2950, 9 December 1916, Page 7

THE WAR AND TRADE

BRITAIN'S GOLD POWER WONDERFUL FINANCE ' THE POST-WAR OUTLOOK The half-yearly meeting of the shareholders of tho Bank of' New Zealand was held yesterday at t'<o Head Office of tho Bank. There were present:—Mr. H. Beauchamp (in the oliair); Messrs. W. Watson, J. H. Upton, W. Beece, D. J. Nathan, and E. W. Kane (directors) ; Sir James Mills (member of the bank's London Board); Mr. W. Cullender (General Manager); and Mr. B. M. Litchfield (Chief Auditor). , The chairman said:— "Our business at this, the half-yearly general meeting, is, as you are aware, limited to tlie election of a proprietor as one of your representatives on the board, and to the declaration of' an interim dividend. There arp no accounts to submit and review. The Late Mr. Martin Kennedy. ! "We miss, on this occasion, tho face of our former old friend and colleague, the late Mr. Martin Kennedy, whose death; as you are all aware, took place on August 25 last. Mr. Kennedy was so closely identified with the bank for the last 22 years, and attended our meetings so regularly, that his absence makes a sensible gap in our assembly. Shareholders have lost a very efficient and valuable "representative, who was at all times keen and constant in the safeguarding of their interests. A man of great natural ability, and endowed with qualities of insight, foresight, and' shrewdness in an unusual degree, Mr. Kennedy brought the force of all his capacity and wide business experience to bear upon the many and sometimes complex problems which, from time to time, came up for discussion at the board's deliberations.. His counsels were inspired by ( his native wisdom and prudence, and the soundness of his judgment was almost always proved by the course of events. - The fact that lie was .consistently re-elected unopposed shows that he enjoyed the unbroken confidence of his fellow shareholders. ■'■Mr.. R.-W. Kane's Appointment, "When Mr. Kennedy's, death took place I was absent in America, and the board was thus reduced from its full strength of six to a personnel of four only—the number necessary to constitute a- quorum. The remaining shareholders' representative, Mr. Wm. Watson, expressed the strongest desire , that the vacancy should at once be filled by a temporary appointment under Clause 53' of the Deed of Settlement, so that there, might be no gap in the shareholders' representation.. Mr. Watson's views weighed greatly with the board, and it was decided to make an appointment without delay. Mr. Watson suggested as a most suitable appointee, Mr,. K. W. Kane, who, as you know, had previously acted on the directorate as one of the Government nominees, a position which. he vacated only in March last. The board's experience and knowledge of Mr. Kane's qualifications being entirely satisfactory, andthe directors having received numerous recommendations in his , favour, from/ shareholders, both in Wellington and at a distance, the appointment was unanimously made, and Mr. Kane took office accordingly. He is with us here to-day as a shareholders' representative, in which capacity I have pleasure in extending a welcome to him on your behalf.

"It was impracticable to arrange to hold the election of a successor at this meeting, as time did not admit of notifying shareholders and affording thr-m -tin opportunity to consider the position, and to give notice of candidature if desired. To enable them to do so, it has been decided to defer the; election until tho Juno meeting. Shareholders were advised of this decision by circular dated September 1,, and informed that notices of candidature can be 'received at HeadOffice until January-31,, 1917. In the meantime Mr. Kane -has .announced:-his intention of being a candidate. ; "During - my .''absence iij. Americi the duties of acting-chairman have hcen very efficiently performed by Mr. J. H. Uptori. ■' The War, , . "Before proceeding to the business which it devolves, upon the meeting to trans-, act, r propose, in conformity with my usual r practice, to , take a cursory review of the leading features of tho.'prt-sent financial and industrial position. The ■ military situation may, I think, be described as an improved and improving one. There is reason to believe that our adversaries' reserves of fighting men of tho best quality are becoming exhausted, and that the reinforcements he will in. future be able to command will cqnsist of of a decidedly inferior class.. We, on the other,hand, are bringing into the field new troops of 6plendid physique, efficiently trained and equipped, and all'fired'with, an enthusiasm Which draws its inspiration ;from the conviction that we are fighting in a 'miiteous cause and that victory, though it may be long delayed, must eventually be ours. And we. civilians sharo with our soldier sons this same unshakeable conviction.' . . . .

. ■ review of what has .been achieved in ■ the campaign of last summer and autumn fills us with hope for the future \\ e cannot, of course, expect much effective work to be performed until the winter )S past,-but-we.look forward with 6,inguino anticipation to the opening of offensive and in'the tenent hone that the operations of 1917 will be effective in crowning tho Allied arms with victory and bringing the war termination. From a reliable souice we hear that, in ' less ■ than six months hence, Great industries and resources will be mobilised to such K t" that 6,10 be awe to sS ply all her own-requirements ill resnect l Uerte ndbigßUnS '

Britain's Money Power, v.-Passing from the military to-the fi Banc,a aspects of the war, with which thiß addiess is more naturally concerned I would remark that one of what rnhvbe called the wonders of the war Ims beeh the marvellousease with which* so far milit vy n "nd n^ nncial r «l"»'ements for Jnltaiy and other purposes of Great a;fiU ,l,l gold%t& ournalVofS l6^? JOUInaU) of September 23 last from the liberty of Noting! "."'lf at the beginning of the conflictany one had been told that Great Britain was/to be called upon for two or th'reo years-and perhaps for a longer periodto finance the whole of jts Tir' imports and those of its -Allies, to finance them moreover, with commodities at record high priced. and at a moment when a great portion of the industrial population was mobilised for war, lie nng.it well liave been, excused for wondering whether, under such £onditions, it would be possible for England to maintain its position as the i»reat jroo gold market of the world. And' vet the wonderful thing has happened. The demands upon Great Britain have been Rreater than could have been imagined in the wildest dreams, for during the past two years our adverse trade balance must, have amounted to many hundreds of millions .of pounds. c i of that fact, however, we nnd that whereas, immediatelv on the firm™ ot the first shot, Germany shut flown on her gold and lias ever since hoarded it jealously. Great Britain from the start, and the other Allies at a later period, have utilised their enormous .public and secret £old reserves as such reserves always should be utilised in times of emergency. So far from shutting down upon our own gold supplies, we must have sent abroad since the war began very little sliort of ,c250.000,00n. most of which has come from our own stores (including the nutnut from South Africa), the amount 'contributed bv the Allies, though useful and timely, beinp, of course, moderate when compared with Hie huge size 'of the credits granted by us. And yet. in finite of the freedom with which this gold has been outpoured, our central stock of the metal is some ,nis.<V)o,ooo greater than it was previous to the war, while in addition

nearly ,£30,000,000 of gold has, of course, been set aside on account of tho note currency reserve.' "The 'central stocks' referred to are, of course, the stocks of the Bank of England. These on July 22, 1914, amounted to .£38,564,000 On Aov. 1 last they stood at ... 54,426,000 ■ An increase of "In addition to the stocks of the Bank or England, considerable gold reserves are held by the large British banks. This position must in the circumstances be regarded as satisfactory, and indicative of sound finance and strong credit. Finance Methods. "The Bank of England rate was advanced from 5 to 6 per cent; on July 13' last, and the following day the rates for British Treasury bills were advanced to: — 3 months per cent. 6 „ 5} per cent. 12 „ G per t cent. "At the end of September the rate for Treasury bills was fixed at 5i per cent, for all currencies, and a new issue of Exchequer bonds was announced carrying interest at 6 per cent., and maturing on February 16, 1920. The design of this arrangement was doubtless to divert money from the short-dated Treasury bills (of which an enormous amount— some Jil,o4o,ooo,ooo—were current) to the longer (though still short) term Exchequer bond. The effect of the new Exchequer bond issuo on a 6 per cent, basis was very depressing upon all investment stocks, and a permanent lowering of quotations on the Exchanges took place. . "The British Government appears to prefer to finance meantime on shortdated bonds, and is apparently desirous of postponing the funding of its floating liabilities in the expectation -that 6ome decided change in, the war situation, in favour of the Allies, will afford the opportunity to float a loan on more favnrable terms than would at the present time be obtainable; The amount thus outstanding on these short-dated obligations at the present time exceeds considerably £1,000,000,000, or. if Exchequer bonds be included as short-dated obligations, jfi1,500,000,000. "The total British Government borrowings since the commencement of the war amounted, at September 16 last, to £2,405,209,000, and as the expenditure is at the rate of about 5J millions per diem, the debt will have since been largely increased. And still the outlay goes on. Britain is, however, becoming more selfreliant as time passes, and is consequently spending less outside and more within her own borders. ' This means, of course, that while the indebtedness of the. State as a collective unit is enormously increased, the wealth of the individuals, constituting the State in which the borrowed money is expended, is also largely increased. The well-being of the individuals comprising the State is promoted, though the State itself may bo driven to the -verge of financial extremity. Britain, however* in the meantime is in no such extremity. Her Chancellor of the Exchequer, in an announcement on the subject a short time ago, stated that tlie country's finances were absolutely sound, and that, assuming the war continues untU March 31 next, the existing taxation would cover all'the necessary peace expenditure, provide all the interest on the national cfebt, and a sinking fund which would redeem the whole debt in forty years, and moreover, give a surplus which would admit of the abolition of tho excess profits tax besides reduction in other taxes. Surely a country with sucli 1 a record might cheerfully face a future of darker portent thnii that at present in view. As <m Anierisan writer has remarked:— " 'When tho history, of the wai comes to be written, it will be found that tho wealth, of Great Britain, and the genius of her financial men, have been predominant factors in defeating tho aims of Germany. Who can doubt that just as i the genius and resources of Great Britain liavo proved equal to tho task of financing this-war, so they will prove equal to the task of reconstructing tho national life on the j conclusion of the war.' Foreign Exchange Rates. "Whilst the demands for munition supplies from the United States of America are now greatly- reduced, considerable importations from America both of munitions and'merchaudise, are still going on to Britain and British Dominions, and an adverse slate of the American exchango still continues. By careful manipulation, however, it has been found possible, to prevent the violent fluctuation in the exchange rates which marked, the autumn of 1915, and for. .practically tho whole of the current year the rate has been fairly steady, fluctuating between 4.77d01. and 4.76id01., or a discount of roughly ,E2 per ,£IOO. "Tho war has effected a tremendous change in the financial position of the United' States relatively to the rest of tho world. America has, .for the time being, become a lending nation, and having' regard to the wonderful expansion of her exports to Great Britain and other countries, one does not wonder at the amazing growth of her wealth. Note these figures: In the month of September, American exports made a new record, when .£102,570,000 worth of goods were sent abroad. Tho exports were greater than over before in ono month, and. exceeded the previous record made last August by about .£600,000. In an-, nouncing these statistics, tho Departments of Commerce pointed out that American export trade was approaching the iC1,000,000,000 mark:' the total of exports for the 12 months ended September 30 was <£994,390,000, exceeding that for the same period tho year beforo by ■£355,900. The net inward gold movement aggregated for September and .£91,207,000 for the year snded September 30. Last year the figures mere <£8,000,000 and Ji11,089,000 respectively, tho net inward gold movement having doubled in ono year. "Gold has been poured into America to such an extent that Americans are now coming to regard with disfavour settlement of indebtedness by mac means, because shipments increase tn an abnormal and unnecessary extent their holdings of unremunerative l'unds, and, it is apprehended, accumulation may .lead, to a period of reckless speculation in an endeavour to .provide employment lor idle resources..

' America is consequently becoming mora favourably disposed towards settlement by loans instead of by cash. A few months ago a loan of J;5(l,0ti0,000 known as the 'collateral loan' was arranged, it being supported, collaterally, by-deposit of American, Canadian, and other securities borrowed by the British Government from British investors. The British Government undertook to pay interest on the borrowed securities at slightly better than the security rate and to eventually return the securities to the owner, or, in the alternative, pay for them at a price agreed upon, which is better than the market price for the time being. There is now, however, talk of a. further loan without any collaterals, which in itself indicates the growing confidence of the United States in Britain's ultimate victorious issue from the war. Business on the London Stock Exchange is once more free of any price restrictions, ail remaining minimum prices having been removed on July last.

The New Zealand Position. "Turning now to local concerns, I may remark that in this Dominion producers continue to experience a. period of phenomenal prosperity, and our staple products are realising prices which, it may be said, have never before been obtained in the history of the country. Since early in 1915, the Dominion's meat output has been purchased in tho interests of tho .Imperial Government 011 a fixed and remunerative basis as to prices, and the arrangement has recently been renewed till the end of the war 011 somewhat more favourable terms to the producer. A portion of the cheese output for Inst season was also purchased 011 behalf of the Ilnine authorities,' and arrangements have recently been made to similarly take over the Dominion's \vool clip for the coming season. Throughout the whole country an exceptionally favourable season has been experienced, and the yield of every description of produce promises to he bountiful. The area of land under crop is somewhat restricted this year owing, to some extent, to the difficulty that is being experienced in obtaining the necessary labour to cultivate the land and harvest the crops and also, in a measure, to the relatively higher prices ranging for meat and wool. It is to be feared that the hizh yield for meal is inducing prodigality in the slaughter of slock, and there is reason to anproliend that our Hocks and herds are being reduced in numbers to such

an extent that tho Adequate stocking of our pasture lands will, in the near future, become a very difficult problem for our farmers. More especially is this remark true in the case of cattle, of which class of stock a more than ordinary number of young beasts are finding their way to the slaughter-house. Lambing has generally been good for the whole country, and this, in gome measure, will compensate for (lie excessivo drain that has been taking place upon our sheep stock. Trade is Good. "The state of trade and business throughout the country is, on the whole, good. The excellent prices which have been realised for tho past tivo years for our staple products and tho large expenditure of borrowed money that is in progress in connection with tho training and /equipment of our troops for oversea service, have placed the people gen-; erally in an easy position in regard to' resources, and thev are displaying tho usual liberality, it not prodigality, in tho expenditure of the abundant funds that they have available. Traders in luxuries, such as jewellery, soft goods, etc., have been doing exceptionally well. Land and agency business is fairly quiet. The building trade is severely handicapped by the shortage of skilled labour and the high prices of materials; and operations in this industry are confined mainly to necessary works. The Money Market. 1 _ "There is little change to chronicle in the state of tho money market. Mortgages still continue to bo raised and renewed at rates averaging as a rule 5-V per cent, to C per cent., and the effect, of the ,£8,000,000 local war loan, which the Government placed on the market in .August last, and which was oversubscribed, has not apparently been to harden the market to any appreciable extent, at any rate in the meantime. The Cost of Living. i "The cost of liring. is steadily increasing, and the high prices to which the necessaries of life have advanced are imposing a heavy burden on the wage-earn-mg and small-salaried classes. The Government, with a view of placing a check on the upward tendency of tho price of butter sold for local consumption, fixed, by Order-in-iCouncil, thei maximum wholesale price at which butter destined to be retailed Dominion should be sold; and in order to compensate manufacturers for any losses they may sustain through selling for the local market instead of exporting, a levy at tho rate (at present) of three farthings per pound of butter-fat used, was mado on all' but : ter and cheese factories, and the issue of a license, to export was made dependent on the payment of the levy. The principle underlying the Government's action is a very important one both to producers and consumers, and its operation as regards butter will 'be watched with interest. ■ . "In sympathy with the increased difficulty of living decently and respectably at the present time on small salaries, the board recently decided to grant to the bank's' officers a war bonus of 10 per cent, on all salaries, not exceeding <£500 per annum, drawn by married men and V single men who are burdened with the support of dependents. As this bonus has been back-dated to April 1 last, and is to continue at any rate till March 31 next, it will, we hope,-effect a considerable Telief to the lower-salaried officers of our, staff in the matter of ways and means of livelihood. I have no doubt that the board's action will have your cordial endorsement. (Hear, hear.) Excoss of Exports. "The trade returns of the Dominion exhibit a very satisfactory position. In each of the two complete produce years that have passed since the outbreak of the war there has been a very substantial increase in the values of the Dominion's exports, as compared with the previous j-ear. To show to what extent the Dominion has benefited by the very strong demand for its staple products, I append a table of the exports and imports (excluding specie) for the two years from October lj 1914, to September 30, 1916, and also for the two years immediately preceding the war, viz., from October 1, 1912, to September 30, 1914;— Excess Exports. Imports. Exports. «C : X £ 1912-3 23,082,416 22,808,351 • — 1913-4 23,759,317 21,050,384 - 47,441,703 .43,924,738 3,517,025 1914-5 '.'29,710,434 19,780,224 - 1915-6 ' 34,920,541 23,791,152 - I " '04,036,975 43,577,376 21,059,599 These'figures show that the excess of exports over imports for, the two prewar years was =£3,517,025, and the excess for the later period . Turning to the figures for . the year ended September 30 last, viz.—Exports, ,£34,926,541, imports ,£23,791,152, an analysis of the export figures shows that the increase of .£5,210,107, as compared with the; preceding year, is due mainly lo higher values, and not to increased quantities. The fluctuations in our main products are shown iu the following table:— Quantity. 1914-5. . 1915-6. Wool, lbs.' 208,908,118 200,130,178 Frozen meat, cwt; 3,368,104 3,453,340 Butter, cwt 413,987 395,460 Cheese, cwt. 792,075 970,818 Value. ' 1914-5. 1915-0. £ £ Wool' 1 ' 10,425,172 13,173,908 Frozen meat 7,238,500 7,589,795 Butter 2,385,308 • 2,749,939 Cheese 2,523,169 3,416,142 It will be seen that all the principal products exported in 1915-10 exhibit an increase in value, though both wool and butter show a .shrinkage in quantity. Imports show an increase in value for the year of .£4,004,928. This is a large increase, which in normal times would call for more than passing comment, but ■under present conditions it is obvious that a considerable portion of the. increase is due to higher values ,of the goods imported and the execution of belated orders. The prosperity of the country tends to encourage extravagance in expenditure and in methods of living,

which in ordinary coarse results in increased imports; and from that, point of view it is . perhaps not a bad thing for the country that inward shipping facilities are in some measure restricted.

Bank Figures. "The banking returns show an eminently satisfactory position. The combined deposits of the banks received from the. public at September 30 last, compared with those of September 30, 1915, were as follow Sept. 30, Sept. 30 1915. 1911). Increase. .£ £ ,E Interest bearing deposits 11,609,080 12,878,620 1,369,563 Non-interest bearing deposits 17,515,863 19,020,071 2,074,808 ' 29,151,929 32,599,300 3,111,371 "Government deposits show large increases, the consequences of the incoming of the local loan moneys, and the large revenues resulting front the taxation imposed under the i'inanco Act, 1915. Note circulation shows an expansion of .£1,507,146. .'This is not tho result of any increased activity in the trade of the Dominion, but is occasioned by tho complete .suspension of gold settlements between tin' liank-i; of exchanges being now made in the• legal tender notes of the settling banks. "Advances also show expansion to the extent of .£1,329,059, the figures being as follow Sept. 30, Sept. 30 1915. 1916. Increaso. £ j: .e Discounts ... 1,357,083 1,.128,828 71,115 Advances ... 21,991,222 23,249,130 1,257,9U .23,318,905 21,677,961 1,329,059 New Zealand War Loan. "11l August last tlio New Zealand Government, whose war raiuircnients had previously been financed through theßrit.isli Government, issued locally a war loan of 0:9,000,000. The bonds were for 11 or 25 years' currency, and the rate of interest 1} per cent., free of income tax. Applications lor the loan totalled .1:99,558,500, of which amount the six banks doing business in New Zealand subscribed .1:1,000,000. Our own subscription was ,£2,000,000. Contemporaneously with the issue of this loan the Government offered for sale at the various post offices in the Dominion war, loan certificates ill denominations of «£l nad <£10. lhose certificates, which -ire payable m live

years, were offered at a discount, tho discount representing compound interest on tho purchase money up to date of maturity of the certificates. Tho prices of tho JGI and «£lO certificates were 16s. and .£8 respectively. By this means coupons for interest are dispensed with. Each investor will draw interest in ono amount when the investment falls due. No limit has beqji placed upon the issue of these certificates, and sales are still being, made. Up lo November 15, X 1,113,000 Iliad been received I'rom the sale of theso certificates. Bank Officers in Khaki. "Since the outbreak of war no fewer than 309 of the bank's officers— more than a third of the total staff—havo joined the military forces. The bank granted leave of absence to 329 of these, with half-pay in the case of members of tho colonial staff and full pay for members of the London staff, the military pay of the latter being on a lower scale than that of tho colonials. Tho remaining 40 resigned their appointments in order to join the army, preferring that .course rather than to wait their turu to be relieved. Of tho officers on leave I regret to say that 20 have lost their lives, ono is missing and believed to be wounded, and 51 others liavo been wounded in action. As probably less than 200 of our officers have been in the firing line, the balance being still in camp or in transit, this is a heavy toll, and it can be judged, that, as a soldier, the bank clerk keeps well to the fore and takes his full sharo of the fighting. You will, I am sure, join with me iu extending heartfelt sympathy to the relatives of our gallant officers who have willingly given their lives in the service of King and country. "The difficulty of carrying o.n ouir large business with a steadily weakening staff is one which is shared by practically every employer in the country, but the magnitude of our business makes our task proportionately heavier. We have .now 200 women clerks at work, and are taking on others. An efficient bank officer, however, is the product of years of experience, and he cannot be satisfactorily replaced by inexperienced clerks. Election of Directors, "Mr. William Watson is the retiring director this year. He has given due notice that he. offers himself for re-elec-tion, and as there is no other candidate I have pleasure in declaring him duly elected. The death of Mr. Kennedy leaves Mr. Watson in the position of senior director. For over 22 years he has been continuously watching over the bank's interests, and, having regard to his physical and mental activity, I should say that he is good for manj more years of service. I have pleasure in congratulating liini upon his re-election. j Interim Dividend, I "The results of the bank's work during tho half-year ended September 30 last have been, found to be satisfactory. Tho profits earned justify the usual distribution. An interim, dividend of 6 per cent, is accordingly ncys declared'in respect of both preference and ordinary shares." Concluding Mr. Beauchamp said he was very glad to see present at the meeting Sir James Mills, a member of the bank's London Board. The directors and shareholders were much indebted to Sir James Mills for his services in the London office, especially since the outbreak of war. Indeed the bank had been very fortunate in securing his services.

Re-electcd Director. Mr. W. Watson said:— "I thank you for again electing me to the board. As tlie chairman has stated, I am now. the solo survivor of the directors who were appointed in 1894, when it was arranged' to reorganise the bank and bring its. Head Office from London to Wellington. The older shareholders will remember that the lato Mr. Martin Kennedy and I novev wavered from the opinion wo expressed in ISD4 that the bank would be highly successful, and you will understand the satisfaction I feel in looking back to the steady progress and success which has attended the institution throughout those twenty-two years. Much of the success lias no doubt been due to the general prosperity and higher purchasing power ot the people of the but I claim that, so far as the internal prosperity of New Zealand is concerned, the Bank of New Zealand, by assisting the opening up and'development of what were huge unproductive areas twenty-two years ago, and bv fostering the meat and dairy Industrie's and trade generally, has done much to bring about that prosperity. I say this now .becauso it is a fitting opportunity for me to add to what the chairman has,said in_ paying respect to tho memory of my friend and colleague of so many years, Mr. Martin Kennedy, who certainly contributed his share to the bank's advancement. To you in Wellington it need hardly be stated that lie was a man of great ability, foresight, sound judgment, and high integrity, but shareholders in distant places should also know; and that at all times, both when he occupied tho chair and when acting as an ordinary member of the board, he devoted himself strenuously to their service. liecognising tho Government us tho bank's most important customer, and Mic firm amity and confidence which should bo preserved between them, he was always willing as a director of the bank to loyally assist and serve the 'Government ■of the day. 1 .may bo pardoned if for a. moment I striko a more personal note. Martin Kennedy and 1 were long connected in business matters outside the bank, and in all our affairs I never knew him depart from his word or advocate an unjust act. lie did not seek popularity or make many friends, but those who knew him well respected aud treated him implicity. "The circular which I sent to shareholders on September 1, and what the chairman has said to-day, will have fully informed you as to the part I took iii tho electiou of Mr. Ji. AY. Kane to the board. I need only say now that did I know of anyone better able to serve your interest's and to share my responsibility, I would have nominated such a person. Tho unanimous concurrence of my colleagues justified the nomination, and it remains for the .body of the shareholders to decide as to the confirmation of the appoinment." Mr. Kane Explains His Position. Mr. Kane said:— "The circumstances in/which I am here to-daj r , as one of the shareholders' representatives on the board, have been so fully explained by the chairman aud by my colleague, Mr. .Watson, in the addresses they have just delivered, that there is little for me to add. The board considered it advisable that the vacancy occasioned by the. regrettable death of Mr. Martin Kennedy should be filled promptly, and they did me the honour of inviting me to acept the position. "It was naturally very gratifying to me that colleagues witli whom I had previously been associated for two years should have been unanimous in making me the offer, I am very sensible of their confidence, and of the appreciation of my former services which their action betokened, and I had no hesitation in accepting the appointment, I have to thank you, Mr. Chairman, for tho kindly terms in which, in the address you have just delivered, you have referred to my past services, and to the considerations that led the board to appoint me. "I desire now, gentlemen, to confirm what the chairman has slated with regard to my intentions, viz., that X shall be a candidate for election by the shareholders at the ordinary general meeting to be held in June next. "Haviug no outside interests aud ample time to devote to the bank's affairs, I feel that, with my special knowledge and past experience of the bank's business, I can bo of service both to the bank and tho shareholders, and if you do 1110 tho honour of endorsing the board's action by electing me at the meeting in June next, as one of your representatives, I can only say that no effort itill be wanting on my part to merit a continuance of your confidence, Later on, I shall, if necessary, take the opportunity of addressing all shareholders by letter on tho subject of my candidature." The London Office. Sir .lames Mills said he wished to thank the chairman for the welcome extended io him, and lie was glad to have an opportunity of expressing appreciation of the compliment paid to him by the board when lie was asked to accept a seat on the London board. As might lie iuiagiued the position in London was a very anxious one for sonic days before the declaration of war, and for a short time after, until the Imperial Government was able to formulate a scheme for the relief of the money market. He supposed that it was no secret that the bank was in n very satisfactory position at that time, and had matters turned out worse than they did. it would have 1 been in as good a position as any of its

class ito meet the difficulty. He was glad to have uu opportunity of complimenting the chairman on his very interesting and comprehensive address. A particularly gratifying feature of the information given in that address about the trade of the colony was the fact of tho largo excess of exports over imports. This feature was of interest to the board in London, because there was a tendency for accumulated funds to find their way there, and it was the business of the London board to find safe and remunerative investments for these funds in such a way that they should not be tied up, but be available for tho use of the bank at any moment should they be required. He could endorse the chairman's opinion that notwithstanding the clouds that hung over us now both as regards the state of the war and tho political position at Homo, wo might look forward with confidence to the future, in the belief that our staying power in finance and men would bring us iu the end to victory in the war.

Tt was difficult to forecast the position after tlie war: so much would depend on the character of the peace arranged. But that it would he 110 easy task for Britain to recover her lost trade he had 110 doubt—her trade that had been lost and scattered, and largely captured by neutrals, because of her own resources being so fully occupied with the war. llie lavish war expenditure lad Riven the neutrals an opportunity to make very large profits, and after the war these accumulated proßts would be available to enable them to coninete With us. AVe misht expect, them 1)llills lo llol <l the nlcn iJI / h! " ] I c "Ptured. We could also look forward to Germany making a told bid to recover her trade as soon as the seas were open to her. It seemed to be admitted that Germany had been able to keep some of her industries goln?, and -that she was prepared to inundate the world's markets with her goods when opportunity occurred. She had also, it was believed, accumulated large'' stocks ot raw material in neutral countries for the carrying on of her industries. .All these things pointed to the great difficulties facing our commercial men and our banks, and pointed to the necessitv ot striking out on entirely neiv lines of better organisation, and co-operation between banks and commercial men, very much on the lines pursued' by the German banks and their commercial men. It pointed to the necessity of looking forward to the next generation rather than to to-morrow, to' the need for better education for ouir young men to fit them for commerce and other purposes, a training which might involve a slackening in the pursuit of Latin and Greek. These, however, were perhaps only idle visions at present.

Good Service Appreciation. j Mr. T. Weston said that it would be ungracious if the meeting dispersed without passing a resolution expressing appreciation of the late Mr. Kennedy's services, regret lor his dentil, and sympathy with his relative's in their lo'ss. He did not think there was anybody who had done so much for the bank us the late Mr, Kennedy. As a director lie luid been of inestimable service to the bank and to the shareholders. Never had his confidence in the bank failed, and lie always advised shareholders strongly to hold their shares. Mr. Kennedy had himself an enormous holding, in the bank, and shareholders always had the confidence that they had looking alter their iuterests a man who litul not only a big financial interest in the bank, but who was also a man of great business sagacity, and. with an iron backbone. He thought it would bo veyy ungracious for the meeting to disperse'wtiiout passing some such resolution. lie would move a resolution on the lines lie had indicated. "■.Mr. J. B. Ifareourfc seconded the motion, which was affirmed by all present upstanding. Other Resolutions. Mr. A. Macintosh moved that the meeting entirely approve of the action of the board in appointing Mr. Kane to the vacancy created by the death of the late Mr. Kennedy. This motion was seconded by Mr. Frank llyer .and carried. Mr. Kano expressed thanks to the shareholders for their kindly expression of opinion. On the motion of Mr. K. B. Jackson a voto of thanks was accotded to the l directors and tlio slalf.