A YEAR OF DIFFICULTIES

Hawke's Bay Herald-Tribune, Issue 185, 23 August 1937, Page 13

A YEAR OF DIFFICULTIES

NATIONAL BANK OF N.Z. i ~ •" *i Additional 4 Per Cent. Dividend To Be Paid CHAIRMAN'S REVIEW The payment of a final dividend of 4 per cent., an interim dividend of the same pate having "been paid earlier, was authorised hy the National Bank of New Zealand at its annual meeting hettd in London and prftsided over hy Sir Austin E. Harris, K.B.E., chairman of the company. The chairlnan said that with this distrihution £112(797 would he carried forward, as against £113,959 last year, which' made allowance for iEl'0,000 for premises and the usu&l payment of £14,000 to the pension and gratuity funds. "Deposit and current accounts at £13,752,000 are £96,000 more than last year, and bills payable and other liabilities at £71,000 less," said Sir Austin. "The figures on the assets side show more variation. Last year coin and notes and cash at bankers were abnormally liigih, sbowiiig a proportion to our deposits and eurrent accounts of 24.2 per cent., and this year at £2,366,000 they show a fall of £941,* 000, which is offset by an increase of £640,000 in. investmeuts and £200,* 000 in New Zealand Government Treasury bills. Bills receivable in London and in transit show a fall of £835,000, whicli is very largely due to the fact that under the Primary Products Marketing Act the Government now con* trols the export and marketing of butter- gnd cheese with a corresponding loss to us of the British bills. On the other liand, remittances in transit show an increase of £135,000, bills discounted an increase of £114,000, and advances an*increase of £616,000." Continuing, ✓ Sir Austijj said that preinises stand in the bank'fi books at £3,000 less than last year, and at £621,500 were conservatively valued. During the year Under review the bank had made considerablo alterations to its Christchurch premises, bnilt a new residence at Riverton, and converted the agencies at Waipu and Lower Hutt into branches. It had also opened a new branch at Rotorua > There were now 58 branches and 28 agpncies in the Romjnion. Proftt and Loss. "Rroflt shows a very slight ira* provement of £244," said the chairman. "There is no need for nie to tell you that tho year has agaiu beelx oue of change and difficulty for the banks. Some of the changes and difhculties have Wcighed hcaviiy with ns, a sterling bank whose business is conhned solely to N.6W Zealand and tUe boatd therefore consider that tho result of the year's working is satisfactory. Moreover they feel that, provided tliere is no further encroachment hy Government measures on banking| business, we should be able to participate in the returning prosperity of the Dominion." The combined quarterly averages of the trading banks' assets and liabilities, which alford the best indication Of movement in bank deposits and bank advances, at March 31 last sliowed surplus resources of £19,346,000, as compared with £20,494,000 a year ago, said th© speaker^ Total deposits at £66,287,000 had increascd by £687,000, but this ligure did not indicate the change that had occurred during the year in the character of deposits, for interest-bearing deposits, which are now 51 per centi. of the total had fallen £4,604,000 while non-interest bearing had increased by £5,291,000. There was a sure sign of increasing prosperity. Advances at £46,941,00 had increased by £1,835,* 000. Both deposit and advance rates bad remained uncbanged during the year the 24 months' deposit rat© being 2^ per cent. ahd the advance rate for "best" accounts 4£ per cent. It was the avowed intention of the Government to keep nterest rates as low as possible; for iustance, local bodies were not permitted-to pay more than 3j per cent. for their loans and the State Advances Corporation lent on mortgage at 4 1-8 per cent. wliile under the Mortgagprs and Lessees Rehablitation Act the maxhnum rate oii first mortgages that had been adjusted under tbe Act had been flxed at 4£ pcr cent. On the other * liand, the batiks felt the competition of the Post Office Savings Bank, which olfei'ed 3 per cent on deposits up to £500 and 2$ per cont on depbsits from £500 to £2,000. Staff Changes. "During) tho winter," said Sir Aus* lin, "Lord Balfour of Burleigh Visit* ed New Zealand, travelling Us l'ar as Sydney by air. Jblo callcd at all oUf branches, and at the sume timo camo into touch With most of our staff and witli many leading meiubefs of tho cominunity. He has reudCred the bank a sCrvice of very great value by this Visit in which he has gaiued an in* timaie and first-hand knowledge of our affairs. The boatd have asked him to accept tho position of deputy-chairman of the bank, and he has agreed to do so. _ " "Sir James Grose's period of s«rvce as generai manager came to an end in April this year, and he has now retired from that position. During the nine years he has been with us lie has rendered great service to the bank, more espeeially, perhaps, during the last few years when political (lifficul* ties loomed largely before us. Wo are grateful to lnm for all he has done for the bank. The board have appointed him an advisoly director in NeW Zealand, Mr P. lt. M. Hanna, who has occupied senior positions in tho bank for many years, is succeediilg Sir Jaxiics Gl'Oso as gciieral manager, while Mr Littlejohn, lately manggfci 41 Ihe Christchurch branch, has

been appointed assistant generai manager. Mr Ohinchen, assistant manager in London, is retiring from the bank at his own request after 43 years' service, and is returning to New Zealand. The position of eecrefcary to the bank .would be bettor separated from that of London manager and we have accordingly appointed Mr J. H. Lawrie to the position of secretary. Mr Lawrie has liad good banking experience, and his qualifications are euch that wo havo every reason to fell sure that he will do full justice to that responsible position. "I wish again to record our sincere thanks to our staff, both here and in New Zealand, for their loyal and efficient service during the past year," concluded Sir Austin. He then proposed: "That the report and accounts be adopted and entered on the minutes: that a dividend at the rate of 4 per cent. per annuin for the six months ended March 31 last be now declared, f ree of income-tax : and that tbe balance of profit and loss account amounting to £112,796 19/5 be carried forward." (Applause). The Rt. Hon. Viscount Hampden, G.O.Y.O., K.C.B., C.M.G.> seconded the resolution. It was carried unani* mously. The Rt. Hon. Lord Balfour of Burleigh, in proposing the re-election of the retiring directors (Sir Austin E. Harris K.B.E., and Mr Arthur Willis) referred to his very enjoyable visit to New Zealand and paid a tribute to the work of the staff throughout tlie Dominion. Mr Sydney Parkes seconded the motion, and it was unanirnously approved. A vote of thanks to the directors, generai manager and offieers of the bank in London and in New Zealand for their services, was unanirnously accorded. The trade figures for the year to March 31, he said, showed a substantial rise in value for both exports and ioiports. Exports were valued at £48, *381,000 sterling, ns against £39, 901,000 last year, and imports at £38,250,000, as against £30,048,000, giving a sterling surplus of £10,131,000, which "was £300,000 more than that of last year. Exports of dairy produce accounted for £21^765,000 (New Zealand currency), or 36.1 per cent. of the total. The quantity of all dairy produce shipped was 245,154 tons, oi* 16,718 tons more than last year, and the value increased by £3,128,000. The trend of prices had been of more immediate concern to the Government than the farmer since the beginning of August last, when the Government assumed control of dairy produce and the farmer received a guaranteed price. It now appeared that the Government would come through their first experimental season of produce control with little or no loss. There was the possibility of wool and meat being similarly controlle.d, but it is now clear thafc the Government do not intend, for the ruoment at least, to assume this control. Wool prices were exeellent during the year, the average price received per balo being £18 14/7, as against £12 19/6 last year, whilst the quantity shipped also increased by 40, 000 bales, so that the total value of wool exported amounted to £15,787,000, or £5,360,000 more than last year. There was practically no wool carried over. Tho total value of meat exported amounted to £13,044,000, an increase of uearly £750,000. Anglo-Argentine Trade. "The Anglo-Argentine trade agreement signed in December last will be of eonsiderable benefit to the Dominion beef and veal trade, " said Sir Austin. "This agreement not only imposes a duly of a lb. on chilled beef and 2-3d on frozen beef from the Argentine, but also provides for the restriction of foreigu imports for the next three years, on the basis of the 1935 figures reduced by a total of 5 per cent. over that period. The Dominions are now allowed to ship increasing quantities of chilled beef, and their imports remain free of any duty. It will be seeu that the arrangement encourages the import of chilled beef from New Zealand, and it is interesting to note that our shipments for the six months to March last .were nearly four tiines as heavy as in 1935, when the export of chilled, as oppOsed to frozen, meat first advanced beyond the experimental stage." Referring to the increase in imports, he said that this was spread over all classes of goods, motor-vehicles showiug the largest increase of ' nearly £1,500,* 000. "In August next the Prime Minister intends to introduce a National Health and Superannuation Insurance Bill, and it is also understood that another measure to be introduced will deal with the revision of the basis of taxatidn,'' said tho chairman. "This latter is a matter of great importauce and interest to us, and in our opinion is ovefdue. On numerous occasions we have drawn attention to the inequity of the arbitrary method by which the banks are assessed for income-tax. Their profits are ealculated on a basis which bears no relation to their earning c»pacity; and you will realiso that in thcse days, wlien, thrOugh the operation of the Marketing Act the banks have lost a large part of their cxchange business, in addition to sulfering a l'all in interest rates and increased cost of iabour — both cnforced by legislatiou— thoir eafning capacity must be impaired. The banks have of course represented their case to the Committee which the Prime Minister appointed to examiue the whole question of taxation, and we are hopeful that we cnay be aiforded some alleviation when the Bill comes before the House." Public Pinance. Sir Austin said' that the Government ended the year with a surplus of £472,000, which, although satisfactory as the result of the year's working, had only been obtained by means of heavily increased taxation. Revenue was £31,147,000 as compared with £26,172,000 a year ago, and expenditure £30,675,000 as compared with £25,891,000. Of the increased revenue, a littlo Over £2,000,000 came from income-tax, and £600,000 from the graded Land Tux, wliicli was rointroduced in Ihe lasL Budgct. Tliere was of course eonsiderable criticism in the Dominion of the

political programme. which imposed so heavy a burden on the taxpayer, cstimated at £19 1/6 per head in 1937, as against £16 5/9 in 1936. With reference to expenditure, which shows an increase on the year of nearly £5, 000, 000, these figures must at fivsr blusli appear somewhat alarming, although it was true that there was a saving of nearly £400,000 on the original Government estimates. The full dotails of the increased expenditure were not yet available, but the estimates providod for an increase of nearly £2,000,000 in expenditure ou social services, the greatest part to be spent on pensions of one sort or another. It was also estimated that the cost of xestoring salaries and wages to the 1931 level would require £500,000, education an additional £650,000, and that further amounts would be required to provide for standard wages ou land development and to meet the cost of reduced working hours. During the year the Government decided to exercise its option to redeem the £12,400,000 four per cent. loan due January, 1937-40, and made an offer to convert it at par to either a three-and-a-half per cent. loan maturing 1953-57 or a three per cent. loan due 1939-41. At the same time they invited subscriptions for an additional £1,530,000 to purchase the assets of the Southland Electric Power Board, making £13,930,* 000 in all. Applications for conversion were received to the extent of £8,254/ 000, and cash subscriptions amounted to £2,715,000, leaving a Bhortage of nearly £3,000,000, which had been made up from "other sources" — probably Government Departments. Unemployment. The figures for unemployment roflected the increased activity in trade and industry generally, said Sir Austm. The number of registered unemployed men in March last was 27,907, as compared with 32,019 a year ago and 35,568 in 1935. If the number of those working full time with assistance from the Unemployment Fund is included, theii the comparative totals of men wholly or partly a charge on the Unemployment Eund are 34,526 in 1937, as against 54,529 in 1936 and 53,498 in 1935. The expenditure on unemployment during the year to March, 1936, was £4,883,000. Revenue from the gen-' eral levy of £l per annum and the tax on income at 8d in the pound was estimated to yield £4,210,000, which, to-! gether with a balance of £406,000, was considered suflficient for the year. "As you know," said the speaker, "Mr. Nash has been making a proIonged visit to this country, and was recently joined by Mr. Savage for the Coronation and the Imperial Conference. They have both been very earnest iu bringing forward the claims of New Zealand, and while nothing has transpired as to results of their labours here, I am sure there is po one who does not hope that they are going back not empty handed or entirely dissatisfied with what they have gained. They havo received the good will of evorybody with whom they have come in touch, and have impressed all with their genuine desire to iinprovo tho lot of the Dominion. ' '