BANK OF NEW ZEALAND.

Gisborne Times, Volume XXVI, Issue 2366, 5 December 1908, Page 6

BANK OF NEW ZEALAND.

* ANNUAL MEETING

THE CHAIRMAN’S STATEMENT

[Piiess Association.]

AYELLINGTON, Dec. 4

Speaking at the half-yearly meeting of the Bank of New Zealand to-day, the chairman (Air. Beauchamp) said that tho profits of tlie Bank for tho six months ending September 30 wore exceedingly satisfactory, and ho had reason to anticipate that tho current financial your -would compare favorably with its predecessors. The combined advances and discounts of the banks transacting business in the .Dominion are the highest on record, being on September 30th £21,217,9. as compared with £18,498,384 on the same date last year, an increase of £2,919,775. Private deposits decreased bv £1,344,995, and tho Government deposits by £887,193, making ia total change of £4,951,963. The altered relations between the- Bank and customers was brought about by the sudden and unexpected fall in wool and other primary products. AATiile the phenomenal prices ruling enabled producers to carry on operations without -levying unduly upon the banks, they simultaneously promoted farmers to increase their holdings, much land being purchased on the assumption that the fat years would continue indefinitely. In towns similarly the effect on urban and suburban land values encouraged many wholesale and retail firms to trade beyond their means, and there was also extravagance in living. AA'itli the curtailing of credit .and economy in private expenditure, the financial equilibrium would soon be restored. There was >a strong demand for butter and cheese exports. These should touch £2,500,000 before the close of the season. There had also been a marked improvement in the values of wool in Europe, Australia, and New Zealand. “AYo can scarcely look for a recovery in the price -of hemp, kauri gum, pelts, and frozen meat,” he said, “until trade had revived in Great Britain and "America. A wonderful revival of industrial activity was anticipated in America, which would naturally have a- material effect upon the Dominion. This time last year tho Bank of England rate of discount was 7 per cent. ; today it is 24, and money in London is a drug on. the market. Day-to-day loans have been .available at” to 3 per cent., .and 1 per cent, is the charge for a. week, whilst the working rate for three months hills has been ! 7-16 per cent. ’..ln spite of these unusual monetary conditions, it is still hard to float loans on account of public bodies. The reason is that tho British pub Sic are shy of investments, and there are a large amount of undigested issues iu the hands of underwriting syndicates and stockbrokers. Until "these are .absorbed the public bodies of tho Dominion cannot expect to receive much encouragement, in London. The time is not far distant when it will be desirable to consider the question of increasing the capital ■ol the 111 nk, and thus bring it more into line with other banks represented in the Dominion.”

For the position of retiring directors there were two candidates,' Air. Wm. AAuitson, a member of the hoard since 1894, and Air. Herbert R. Rawson. A ballot joi' shareholders resulted : AYatson 55,334 votes, and Rawson 4074 votes.

Out of the profits of the past half of tho financial!! year, the board declared an interim dividend of 5 per font, on both preference and ordinary shares. The dividend is payable at AVellington on Monday next,” and at the branches on receipt of the advice.

Mr. Watson returned thanks for •his election as director. On tlio question concerning tho dividends many shareholders, ho said, had written to him. If he saw tho Bank was able to pay increased dividends, as well as substantially add to tlio reserve fund, he would advocate it on the board! Few of the general! public understood the posiion of ordinary shareholders in the Bank of New Zealand.

Mr. Martin Kennedy said that hitherto lie had not asked for increased dividends, though he had advocated it in the near future. He declared that an increased dividend would bo asked for. Strictly speaking, the Bank of New Zealand’s capital basis was a million and a-half. It was only paying 5 per cent, at present. Mr. T. S. YYeston said he.hoped the shareholders would be advised of any intention, to increase the capital. They did not want a repetition of what took place in 1903. The Chairman, in reply, dealt with the relative positions of the Government and the shareholders. Air. Kennedy had put the relationship in a light that was scarcely fair. Although the Government held only £50,000 preferential shares, they also held a. guarantee of £1,000,000, and wero therefore interested to the extent of £l, It was impossible to got away from the question of repayment in 1914. Until the guarantee was 'extinguished the Government had the right to be represented on the board to the amount of the guarantee, plus the amount of share capital which they held. The meeting concluded with votes of thanks to the Chairman and staff.