UNION BANK OF AUSTRALIA.

Globe, Volume XXII, Issue 1882, 5 March 1880, Page 3

UNION BANK OF AUSTRALIA.

[“Daily News,” Jan. 13.] A special general meeting of the proprietors of this Bank was held yesterday afternoon at the offices, 4, Bank buildings, Lothbury; Mr William Fanning in the chair. The Manager (Mr W. K. Mewbum) read the report and balance-sheet, which were as follows: “ The directors have the pleasure to report that the accounts of the Bank, after amply providing for all bad and doubtful debts, are again sufficiently favorable to admit of the declaration of a dividend of 7 per cent, for the half-year, and of a bonus of 5s per share, being together at the rate of IB per cent, per annum. The 500 now shares which remained unallotted at the last issue having been disposed of, the Bank’s paidup capital of £ 1,500,000 is now completed. The premium of £33 each on these 500 shares, viz., .£16,500, has been added to the reserve funds, bringing the total of those funds to .£816,500. Intelligence from the colonies is of a cheering character, the season being reported as generally very favorable alike for the pastoral and agricultural interests, whilst the marked rise that has recently taken place in the home markets, in wool, corn, copper, and other produce, cannot fail to have a vary beneficial effect in the colonies. The directors have pleasure in stating that the general manager, the managers of branches, and other principal officers, as well as the staff generally, both at home and abroad, have given them satisfaction, and they tender their best thanks for their zealous services. The annexed balance sheet presents a net amount of profit of .£123,039 10s 9d available for division. Of this the dividend and bonus will absorb £1120,000, and leave £13039 10s 9d to bo carried forward. The dividend warrants will be transmitted by post on 19th instant, and the dividend and bonus will bo payable in the colonies at such time as the general manager shall fix after receipt of telegram. The proprietors have already been informed by circulars from the Board, of 21st November and 23rd December, of the resolutions now submitted for their consideration. The first of these is to effect a change in clause 2 of the Deed of Settlement, which, as it was framed in the year 1837, no longer expresses correctly the localities in which the Bank’s business is now, or may be at some future time, carried on. The object of the second resolution is to amend clause 100 of the Deed of Settlement, by omitting that portion which provides that a director, before election, shall have held his qualification in shares for not less than six months. As this is an inconvenient provision, the directors recommend that in the interests of the Bank it be removed. The third resolution contains the assent of the proprietors to the registration of the Bank as a limited company under 1 the Companies Acts, 1862 to 1879.’ and to the increase of the nominal capital to £54,506,000. Should this resolution be adopted, the capital and reserves of the Bank will be as follows, viz. :—Capital, £54.500,000, in 60,000 shares of £575 each, consisting of — £525 per share paid, £ 1,500,000, and £SO per share reserve liability, under section 5 of the Companies Act of 1879, £3,000,000 ; total capital, £ 1,500,000 ; reserve funds, £816,500 — total, £5,316.500. The directors recommend these several resolutions to the adoption of the proprietors.” Statement op Liabilities and Assets at the Branches on the 30th June, AND AT THE LONDON OFFICE ON THE 31st December, 1879. Liabilities Capital. £>,500,000. Reserve funds —Amount as at 30th June, 1879, £800,000; premium of £33 per share on 500 new shares, £16,500; together, £816.500. Circulation, £318.506; deposits, £6,565.680 8s 9d; bills payable and other liabilities (including reserves held against doubtful debts), £1,388 506 12s 8d; balance of undivided profits, £123,039 10s 9d. Total, £10,742,232 12s 2d. Assets—Specie on hand, and cash balances, £1,231 813 5s Id ; bullion on hand and in transitu, £72,103 16s 8d ; money at call and short notice in London, £318.000 ; Government securities, £536,449 14s 2d; bills receivable, loans and other securities at London office, £1,309,471 lid 4d ; bills discounted, bills receivable, loans, and other securities at the branches, £7,008,044 7s lid ; bank promises and property, £266,350 ; total, £10,742,232 12s 2d. Statement of Profits —Balance of undivided profits at 30th June, 1879, £127,631 14s 2d, out of which a dividend and bonus were declared of £119,000, leaving a balance of £8631 14s 2d. Profits of the past half-year, after making provision for all bad and doubtful debts, £183,494 18s; less remuneration to the local directors, and salaries and allowances to the colonial staff, £43 384 18s 3d; general expenses in the colonies, including rent, taxes, stationery, &c., £14,514 6s 5d ; remuneration to the board of directors, salaries of London office staff, rent, taxes, stationery, and general expenses, £8539 7s 7d ; income tax, £2648 9s 2d ; together, £69,087 Is sd. Balance of undivided profits at this date £123,039 10s 9d. Statement of Reserve Funds—New Zealand Imperial Pour per Cent. Debentures, £200,000; Canada Imperial Four per Cent. Debentures, £150,000; Colonial Government Debentures, £150,000 ; making £500,000. Bank premises and property, £266,350; balance of reserve funds not specifically invested,£so,lso; making £316,550 ; total reserve funds, £316,509. London, 7th January, 1880. (Signed) B. J. Ashton, Chairman of Committee. W. R. Mevybttrn, Manager. B. Buckler, Accountant. Tho Chairman said—l believe, gentlemen, that it is unnecessary that I detain you long over what I may call the usual business of our meeting, and tho more so that yonr attention is drawn to questions of unusual occurrence and importance, upon which yon will yourselves probably desire to raise some discussion. Now, if I am unable on this occasion to dwell on those great strides in Colonial progress with comments on which you have at times been interested by gentlemen occupying this chair, I may fearlessly assert that throughout a time of great depression, even to its approaching end, the colonies have vindicated their claim to rest on a basis sound and reliable as any that has ■ been assumed by their best friends, I need hardly stay to remark that this stability implies our own perfect security. I have said “approaching end ” because, though the active causes of the difficulties I am about to allude to may have passed away, their consequences may for some time to come continue to affect the character of our reports to yon. You doubtless bear in mind that the time now reviewed brings us, as far as tho colonies are concerned, only to tho 30th Juno last. The causes of onr

past difficulties are, I take it, to be found in that commercial depression which, long protracted, disturbed Europe, America, and the East, It was long in reaching our colonies, but the wave of depression, if I may so call it, though long in reaching the Australian shores, did at last arrive there It was aggravated by the lamentable Scotch occurrences of the autumn of 1878, and reached its lowest point during this great drought, of which you have heard so much. I question, however, if any one but he who has been resident in the colonies during one of these visitation" can readily realise their terrors. Suffice it that I say they first afflict the pastoral and agricultural interests; but, long continued as of late, the mischief spreads into every channel through which the general business of the colonies flows, and the result is that an urgent request is heard in every Bank parlor, under circumstances not calculated to inspire confidence, not merely for forbearance, but for additional assistance. Such, gentlemen, were the conditions, hnppilj the unusual conditions, under which our business was some time conducted, and I refer to them without hesitation because, overcome, they justify the Confidence X have professed in colonial stability, and because I thus draw your attention to the arduous position of late occupied by our general manager and by the managers of ear principal branches. It redounds grea'ly to their credit that though losses were inevitable they were so much within the amount we might have anticipated, as also docs the fact that we seldom hear of complaints on tho part of our constituents that they failed to receive in their difficulties the consideration thev reasonably expected at the hands of their bankers. And here I feel bouni to add, though a little careful to speak in laudatory terms of gentlemen in their presence, that the zeal of our London officers, tho watchfulness and calm advices of Mr MewVmrn. merit your warm acknowledgment, as they have ours. That, under the circumstances alluded to, we have felt it advisable to restrict business I do not conceal. I have already admitted that losses have been incurred, but as wo still declare for distribution a sum equal to the dividend and bonus which you have received in past half years, and this after writing off every bad debt and providing liberally for all that is doubtful, I feel justified in looking for tho expression of your satisfaction with the result submitted. Thus much, if yon please, for the past. The future is of far brighter omen. Not only do we expect a fine clip of wool everywhere, but the improved condition of commerce here and elsewhere bids ns to anticipate for it a greatly increased value. A rise in prices of 2d per lb. on the low average of 1879 means two millions sterling additional in the pockets of the flock-masters. In the wheat-producing colonies an abundant harvest is all but assured. South Australia alone showing an estimated surplus of from 250,000 to 300,000 tons. la mining matters, recent advices show a revival of spirit, and the more settled industries, ineluding that of the sugar planter, are progressive. Mercantile affairs generally are reflecting the improvement which we here are experiencing, and if the colonists can only arrive at a process—tho question is receiving much attention —by which they shall find, as America has done, a market for their surplus stock in any shape, they are now far from having reached the limits of their immediate progress. In this progress we shall share, but our course will not bo less disputed in the future than it has been in the past. Tho late increased demand for money on the part of the landed and pastoral interests has attracted attention and led to the just conclusion that it is insufficiently met. In one department of our business wo may look for inare'.sed competition. We do not regret it, for viiongh advances on the lands of a country are made on the heat security, and though the making of such advances was one of the objects of tbe Bank when founded, it is obvious that times may arrive, as of late, when tho amount so employed might prove inconveniently large and not so convertablo as the ordinary business of a banker requires. That the profits of the Bank in this view promise an early increase it were idle to assume. To what extent they may fall off, if at all, remains to be seen. Of the result I am not apprehensive, I doubt not that we shall bo able to make yon snob a return as under the circumstances should satisfy you. 1 think, however, we should wisely keep before us the points I have referred to. As regards our balance-sheet, I would ask you to recall what fell from our chairman at onr last meeting. Mr Hill then divided into their component parts some of the larger items on either side of the account. The greater part require no distribution. Ho promised a more detailed statement when once we should be registered as a limited liability company, and seeing that the statement was welcome to you we decided to anticipate tbe event so near at hand, and we now submit the account m that form which it will in future assume. Tbe chairman then commented on the balance-sheet as submitted to them, and then proceeded—Now, gentlemen, we will tarn to the consideration of the three resolutions which I shall presently submit, bat which at this stage of our proceedings I need not read, as they are already in your hands, being fully set forth in onr circular notice of tho 23rd of December last. I will then, with your permission, say tho little I have to advance on each of them as they occur on tho circular referred to. 1 will ask you to defer your own remarks until you have heard me to the end, when i will do my beat to reply to you in, I trust, a satisfactory manner. The first resolution seeks to alter the second clause of the deed of settlement. It is not that wo desire to obtain power to vary in any way the character of our business, but to widen the area of our operations if at any time it be considered advisable so to do. The power would be exercised with the greatest caution. It will be readily intelligible to you that conditions which satisfied the state of things in 1837]rcquire to-day some modification ; and as we are now about to alter in qua important particular the deed of settlement, we may as well avail of the opportunity and make such other changes as are required to meet the rapidly extending settlement of places adjacent to Australia, and which must when settled of necessity look to it as the centre from which their requirements must bo supplied. You will be good enough to understand that we have no intention of any wide extension of onr operations, but overtures have been made tons, of tbe soundness of which, if satisfied, we might be required in the interest of the bank to act promptly. Should it so happen, our action would be laid before you at onr first half-yearly meeting : thereafter. The second resolution which I shall submit proposes the amendment of the hundredth clause of the deed of settlement, and X shall ask you so to vary it as to give the Board of Directors, when needing a colleague, power to nominate any gentleman whose qualifications for tho office shall seem to them recommendatory, without waiting for the expiry of the six months during which it is now required that he must have held his share qualification prior to nomination. If not otherwise qualified, the six months’ tenure of the shares cannot supply what may be wanting, and the hundredth clause as it now stands simply throws in the Board’s way an unnecessary impediment. I urge upon you most strongly the favorable consideration of this point. Without the power sought, in the event say of a first-class man arriving from the colonies, a man, for instance, at the head of a well-established house—a man of fortune, of large experience, and standing high in public estimation in the colonies, we might to the great injury of the bank’s interest bo unable to secure his services, and this because we would maintain a wholly useless provision as far as the security of the bank is concerned. And now, gentlemen, we come to tbe last and most important point with which I have to trouble you. I do not think that it is necessary that I should dwell on the expediency of registration under the Companies Act, 1879, as for a considerable period we have all been agreed that it is most expedient. For some time after onr lest meeting certain difficulties seemed to interpose, but wo are now advised by eminent counsel that there is no hindrance to our carrying out your and our own views. The question for our consideration now seems to be: Do we propose a reserve liability which is sufficient, or is it too large ? Wo believe that it is sufficient—indeed, as far as my own convictions go, I might admit that it is too large; but it is the public whom we have to satisfy, not ourselves —the public whose confidence we, as an unlimited Bank, now eminently enjoy. Our deposits testify to the fact, and bills drawn under ibo Bank’s credits are negotiable throughout all Eastern markets, where a very important part of colonial business lies, on terms inferior to none, I don’t care by whom the credit was issued, and our acceptances are regarded hero and elsewhere as paper of the finest class. We must maintain this most desirable position, even though wo appear to bid high for it. We shall get rid of a risk which, owing to late deplorable events, is often, I believe, much exaggerated, and the limit of liability attaching to ns individually, should disaster come, will bo much diminished by the responsibility of the class of shareholders whom it is already evident that we shall attract. I have taken much trouble to estimate the relative positions which wa and all other Banks at Home and in the colonies will occupy after we have registered, and though fearing a comparison with none, the question is how shall we stand in contrast with our foremost colonial competitors? They arc established either by Royal charter or by Acts of tbe Colonial Legislatures. Tbe limit of their liability, as far as I know, supposing all shares, theirs and ours, to stand at par, is as much again as the par value. In our case it will be twice as much, and onr position as regards tho proportions which our capital and reserves will bear to all our liabi ities —both to the public and to ourselves —will he such as will stand a favorable contrast with that of our principal rivals, if the comparison be thought advisable by any one. Here are tho figures on which I base my assertion; they are too voluminous to trouble you with, but they are open to the inspection of any shareholder. There is a vast difference between tho liability proposed and that we now lie under, though both one and the other are to my mind of remotest contingency. Yon will not forget that no part of the reserved liability can be caUedupnnlesstheßankba in liquidation, and chat between us and this event, if you consider it I had almost said possible.

there stands as a buffer the goodly sum of our reserved funds, £816,500. Gentlemen, I think that wo are justified in urging you to adopt the resolution I am contemplating with the same feelings of confidence and safety with which your directors regard it. [Cheers.] After a short discussion, the resolutions referred to in the latter part of the chairman’s speech were passed, as were also motions for the adoption of the report and the declaration of a dividend of .£1 15s, together with a bonus of os per share. On the motion of Mr C. C. Trevor, seconded by Mr E. S. Wilkinson, a vote of thanks was giveu to the chairman and the other directors.