AN ENVIABLE RECORD

Evening Star, Issue 23369, 12 September 1939, Page 11

AN ENVIABLE RECORD

DUNEDIN SAVINGS BANK CELEBRATES ANNIVERSARY ESTABLISHED SEVENTY-FIVE YEANS TO-DAY BENEFACTIONS TOTAL £62,951 Indelibly impressed in the growth of the city of Dunedin, and particularly in the financial and industrial spheres, is the enviable record of tl\e Dunedin Savings Bank, which to-day celebrates the seventy-fifth anniversary of its inception. Well and truly laid were the foundations of the institution, and to those who pioneered its establishment, men of great foresight, Dunedin will always owe a debt. And to the trustees, who' have carefully safeguarded deposits through the decades, the city’s thanks are due, for their “ forward ” policy in leaving behind obsolete methods and beaten tracks has been rewarded with results that have far surpassed the imagination of the most sanguine. But the bank itself has justified reason for pride. It has rendered great service in instilling in the ■ minds; of the people, and especially the young people, the advantages of < thrift and in the safeguarding of the investments of their savings. The long list of benefactions made since 1879, which now total £02,951, enables one to realise,; to some extent, what a great benefit the bank contributions have been to the social, philanthropic, and educational life of the city.

Despite its chequered career, particularly in the earlier years, it is pleasing to note the great expansion recorded since 1914. Since those war days, when it played a major part in rehabilitation work, its list of benefactions has grown substantially, so that in 1939 a total of 15 organisations received a distribution’ of £5.000. At March 31 this year there were 38.549 depositors, with credits of oyer £2.500,000, while throughout its history it has continually stimulated trade by loans ( to the Government, local bodies, "private enterprise, farmers, and others. The Dunedin Savings Bank is an institution of which citizens are justly proud. BIRTH OF THE BANK.

Until gold was discovered in Otago in 1861, the growth of the province progressed slowly but steadily. The population increased largely by the arrival of immigrants year by year, industries were established, buildings erected, and a leisurely development in business was recorded. The opening up of the Tuapeka goldfields and others in Otago in the early ’sixties changed all that, for men poured into Dunedin in large numbers which .represented much expansion of the city. In 1863; when a number of publicspirited citizens set in motion plans and preparations for the establishment of “ The Dunedin Savings Bank,” it was recognised that such an institution for wage-earners and salaried people was a necessity. ' The Government readily gave its sanction and authorisation for the commencement of the bank under the Act of 1858, and in December of ’63 thefollowing were • gazetted as trustees; —lVtesrs John Bathgate, John Cargill, Richard S. Cantrell, Thomas Dick, George Duncan, Thomas S. Forsaith, John Gilles, George Hepburn, John Jones, John Logan, Frederick J. Moss, Arthur W. Morris, William Mills, Richard B. Martin, George M'Lean, James Rattray, Frederick H, Richardson, William H. Reynolds, Alfred R- C. Strode, and Charles H. Street. The list of trustees was representative of practically every class of citizen in Dunedin at that time, and it is in large measure due to their publicspirited motives that the hank was so well established. First manager was Mr Edmund Smith, who was selected from 12 applicants. POLICE PROTECTION. The first banking chamber was m Farley’s Buildings, Erinoes street, and operations were conducted on Monday evenings only between the hours of 5 and 7. The first depositor was Mr William M‘Lellaud, ana the small deposit of £1 marked the commencement of business. Seventy-five accounts were opened on the first day.

A constable was present during the times the bank was open for business, and he also escorted the manager and trustees (two of whom were always present during the opening hours) when they conveyed the moneys to the Union Bank. FIRST LOANS MADE. First loans on mortgages were made on October 6, 1864, these being £3OO on 100 acres in Tokomairiro and £SOO and £4OO on Dunedin properties. The loans were at 124 per cent, per annum. As funds were forthcoming, the eon sent of the Governor (Sir George Grey) was obtained to invest half of such funds in Provincial Government Debentures bearing interest at 84 per cent, per annum. The Commercial Bank was to. accept these debentures as security for any advances, when required, but such advances were not to be. more than one-half of the nominal value of the debentures.

In 1860. the promissary note, dated July 2,. 1864, given to the Bank of Otago by several citizens who interested themselves in the establishment of the Savings Bank, was returned, and the signatures cancelled. THREAT OF GOVERNMENT MONOPOLY. The year 1870 was a critical one for the bank. The General Government was desirous of monopolising the business of savings banks, and sought the opinion of the trustees as to the advisability of transferring the bank to th? Office Savings Bank, in De-

bember of the same year, a full meeting of trustees met the Colonial Treasurer, Sir Julius Vogel, and, after a lengthy discussion, it was agreed not to hand over the bank to the Government. In 1873 the Bank of Otago, which later became the National Bank of New Zealand Ltd., took over the current account, which to this day remains in that bank. FIRST GRANT MADE. During the decade 1875-1884, the City of Dunedin did not expand greatly and this was in large measure reflected in the business done at the bank. It was in 1879 that the first grant was made under the Savings Bank Profit Bill, 1878. The profits had accrued to over £15,000, and the trustees donated to the Otago Benevolent Institution the sum of £7,515. this representing that portion of the accrued profits in excess of 10 per cent, of the aggregate amount at credit of depositors. Tho above sum was paid over by the transfer of nine mortgages totalling £7,510 and by the handing over of a cheque for £5. In 1880, a furthev’sum of £2,190 was paid to the same institution, and another of £1,500 in 1884. SLOWER PROGRESS. During the period 1885-94, slow progress was made. Great difficulty was experienced in finding suitable investments for the moneys of the institution. The interest on mortgages was reduced to 6} per cent, per annum. The position was relieved a little under the Act passed in 1885, which allowed savings banks to invest in local body debentures to the extent of onethird of their accumulated funds. At the close of the year 1894. the amount at credit of 3,698 depositors was £145,024 6s 9d, an increase of over £75,000 to credit of depositors during this period.

THE MOST DIFFICULT DECADE. The decade 1895-1904 was the most difficult one in the history of the bank. In 1896, owing to difficulty in finding suitable investments for_ funds, the trustees decided to enter into negotiations with the Government either to hand over the baulk to tho Post Office Savings Bank or go into liquidation. It was decided that, in the event of the latter happening, any surplus of any unclaimed deposits or any sunn lus on the winding up was to be held by the trustees for six years, and if any balance then remained the amount so left was to be donated to the Dunedin Hospital. When everything had been arranged and the Bill for the proposed closing of the bank was to be brought, before Parliament, a discussion arose with regard to the handing over of any surplus to the Dunedin Hospital. The Government desired to keep any surplus itself, and others in the community wished other institutions to share in the distribution, and the proposed Bill was finally withdrawn. This was a big set-back to tho bank, for the depositors could not be convinced that tho institution was still active, and

they were also wary as to wliafc might happen in the future. Notwithstanding the adverse financial influences, sufficient profits were made to enable the trustees to make a grant in 1902 of £6,500 to the University of Otago.

WAR, AND BUSINESS AS USUAL. The year 1914 is one which this generation will ever remember as the commencement of “ The Great War.” The war developed thrift, and from this year on there was a marked increase in the prosperity of tho bank, (facilities were afforded for the collection of portion of the soldiers’ pay warrants that had to remain in New Zealand, which greatly increased the popularity of tho bank. A mild run was experienced at the outbreak of the war, but the putting into operation of tho “ Scale of Notice,” as sot down in the Act, made people think, and many, before_ tho “ notice of withdrawal ” had expired, cancelled it. The result was that within a month of the commencement of hostilities business was back to normal. In 1920 Air Frederick Smith retired from the managerial chair after 40 years of faithful and honest service. He was succeeded by Air James Quaile, who had been accountant since Juno, 1907. Jn 1922 a South Dunedin branch was opened at Cargill's Corner. One of the greatest advantages to the public under the 1923 Savings Bank Amendment Act was the permission to enlarge the scope of its donations. Any portion of the profits not exceeding half of the net profits of the then preceding year could bo donated to educational and humanitarian institutions. In 1925 a North Dunedin branch was opened for business. Next year, owing to the increased expansion of the bank’s business, larger premises had to be sought. Tho buildings finally chosen were the present premises. Dowling street, at a cost of £25,000. In 1931 the general conditions gave business and financial institutions of tho Dominion much concern. Deposits contracted considerably, and at times there was difficuty in finding channels for investment of funds. ENGENDERING THE SPIRIT OF THRIFT. The period 1935-39 opened in a more happy strain. It seems to be a fact that,' in spite of the financial depression through which the Dominion had passed, such times engender the spirit of thrift. This is borne out by the big increase in the amount at credit of depositors over the period of the depression. Each year, in October. World Thrift Day is held. The Dunedin bank falls into line with the International Thrift; Institute (of which it is a member) by doing all in its power to further the cause of thrift. In Alarch, 1938, Mr James Quaile retired from the manager’s chair. Ho served the bank faithfully for many years, and his retirement was a loss to all concerned. He was the first officer of the bank to retire under the superannuation fund. Air Alfred Thomas succeeded him. The amount at credit of 38.549 depositors at Alarch 31, 1939, was £2,527,083 17s Id, an increase of 5,256 depositors and £268,690 los lld in the amount at credit during this period.