BANK OF NEW SOUTH WALES

Dominion, Volume 14, Issue 95, 15 January 1921, Page 10

BANK OF NEW SOUTH WALES

(Published by Arrangement.) AL the half-yearly general meeting of hhe Bank of Now South Wales, held at the chief banking house, Sydney, on Friday, November 26, 1926, the Chairman, tho Hon. Sir Charles K. Macke.llar. K.C.M.G.. M.L.C., preuident of tho bank, in moving the adoption of the report, said:—

Gent’lemen, —In moving the adoption of the report, I beg to call your attention to the figures which make up the bal-ance-sheet. You will notice that there lias been, considerable activity in the business, and' some important fluctuations. Deposits have increased some £4,300.000 on the year—a very fair result, considering the calls of our clients on their credit balances for various purposes during tho year. . Note circulation in Now Zealand is about. £200,000 higher, owing to the activity of the turnover in the Dominion. The bills payable and other liabilities in that group show a decrease of about The capital and reserves, etc., snow an increase of about £1,100,000 net. -These increments from our capital, etc., and increases in deposits and other resources, have been fully absorbed, temporarily, on the other side of the balancesheet, by increase in advances. Ihe drought,' in tho first place, has caused clients to lean upon us for assistance to an unusual degree, as we have foreshadowed in our remarks at* other recent haltyearly periods. This drought period has been 'a very trying one for all concernetl, lint recuperation has set m, and witn fair seasons ahead for a year or two, as may bo fairly expected, business should, in this respect, become normal again within.a reasonable time, and our increased advances 'from this cause be lur a oly reduced in the near future. Lno speed'of this is contingent on the money return for our primary products. ine wheat: harvest promises to be a very good one.' Assurance cannot be fully achieved till tho wheat is in tho bags, of course; but -expectations of a very large-harvest aro fairly justified. Arrangements aro under way for financing the crops, and this bank is with other banks in effecting this. \Uth wool the situation is not so clear. During the war, up to the season just'.ended, the British Government financed the wool by cash payments, which was a very great help to" growers and finance generally; but this season there has been a reversion to the pre-war methods of local eales, and drawings for same by 60 di\y drafts sunder credits established from the other side. This would be all right if the wool was selling freely, but owing to the fact that, the Imperial Government has something like 2,000,000 bales of past clips on hand to-dispose of, and to this further difficulty which has arisen with regard to the sale of low class wool, for which the demand is very limited, for the time beui£, the wool sales are languishing, and it is dimcult nt present lb say when the market will right itself. This is distinctly an after effect of the war, and it may take some time to bring about an adjustment in respect of this important side of the business- Other products particulaily dairy products—are being dealt with on fairly good lines; but meat and metals slow some delay in moving, owing principally tb shipping difficulties. At last half-year I referred to the large amount of money we had in London, and the problem 'of getting it satisfactorily to this side, where our principal business is carried on. That problem has been solved for us by the extraordinary activity on the selling side, by reason of the unusual increase in the importation ot goods It would almost seem as if goods had been rushed into Australia by British manufacturers. At any rath,. the result has been that payment for imports lias absorbed the largo London balances uhich rhe majority of the banks held six months ago, and has converted plenty into scarcity at the London end. The delaj in getting money for sale of our exports 1 ns contributed to this scarcity, and for the time being we and other banks have had to curb the operations of clients in respect of tho importing business. the situation demanded such a course, for, with very little going into London tot the time,’ and abnormal drawings on our accumulated store of funds there common prudence compelled practically all banks to adopt what may be tonned a “rationing’’ process for the present. As time goes on, and the bulk of our produce is converted into cash, the normal position will lx- restored, but we canno£ get! away from the view that, there have been excessive imports amounting in some cases to over-trading, and that a check will be salutary, however brought a The aggregate advances of the bank have increased on the year by .£6,900, .net. Some of the causes have already been explained; but I may Drought, assistance m Now South n ales and Queensland has approximately ab’sorbed £2.030,000, which the board consider is fair proof of the banks determination to stand by the man on the land. Trading requirements for imports, £3.000,000, and the balance has gone ink) the general business. A large portion of this will come back as exports nre made and realised, and I may say that the increase is spread over the whole of the districts in which we operate. Notwithstanding these heavy drains on our resources, our first line figures stand at over £29.000,000, representing over 10s. in the £of liabilities. But the composition of the first line has been much altered. Coin and cash are somewhat less, but Australian notes and Government securities are more. The principal change is in money at short call, and short-dated securities in Ixmdon, and the cause of the dpc reuse in these hns already been explained. The finaricia.l situation is largely affected by the transition from war to peace conditions, and the latter are very much influenced by delays in getting away our exports. Anything that can be done to expedite the turning of these into money, must be energetically and systematically given effect to by all who have nnv control whatever over such matteis. The general outlook still calls for steady and continuous conservative control ot finance. All the important money markets of the world are affected by severe stringency, and rates are high, with no immediate prospect of relief. The remarks that I made at the Sepvember, 1919, half-year, still hold good. Aft.rwar adjustments ,, are still in the transitional stage, and until the outstanding problems in connection with transport labour and other kindred interests are reduced to something like order, it is evident ffiiat banking and all other business must be kept within the most prudent lines possible, and that, especially, anything in the way of overtrading must be avoided. Given reasonable working conditions, the productiveness of Australasia. is very great, and the trade founded on it should be sound, if reasonable prudence is exercised. But attempts to make excessive drafts on the future are not calculated to benefit the country in the lon--’ run. In other words, the more we can" finance within, our current resources the better.