Bank of New Zealand.

Horowhenua Chronicle, 3 December 1915, Page 2

Bank of New Zealand.

THE HALF-YEARLY MEETING The half-yearly meeting yf the iSauk of !New Zealand shareholders is being held ill Wellington to-day (Friday). . In addressing the meeting, the chairman (Mr Harold Beauchamp) eaid :— Everything continues to be dwarfted and overehadowed by the great European conflict which is still in progress, and, which clay by day becomes imro and* more acute. All the circumstances seem now to point to tlio conclusion that the War is to be a. war or exhaustion, and that victory ultimately wil be on the side of the combination po.ssessing the greater capacity for ondur-

ance. The financial might ol Britain has been a theme of constant encouragement and confidence when we bare speculated upon EHe final, issup of the War. Most of us recognise that, m a test of endurance, the (side which controls the longest purse is in a position of immense superiority. i l ,;tt wo mns:. not close our elos to tin; fact that a measure of advantage will also tto r.:i the side which, by rigid economy and caution in both private andi public o penditure, maintains ite , !l' in a potion to support its ])ooj)le and pros' cute the War uh a substantially low.w cost than its enemies. The applicit ion of the old adage, "a penny save: is a penny gained," becomes at once apparent, and it is quite possible by the exercise of extreme ca.re in the private and national outlay, that our enemies may in great measure counterbalance the superiority we possess in the way of more ample financial resources. In this respect, Germany, particularly, bon gre mal gre, has been forced to economise through the effective blockade of"her ports by our Aavy. While our enemies themselves have ad nutted the serious handicap nndier which thu.v labour—that is, viewing their position the financial standpoint—and while we ireely recognise Britain's pre-eminence and vast financial resources, ii will nevertheless be prudent that each constituent part of the Empire should take bcock of the position, lor it its to b.. 1 feared that an overweening confidence. i'i our financial supremacy, may encour-

age. nay, is encouraging, a recklessness and prodigality in expenditure which may, if not checked, expose the Yllies to a risk ol that urst exhaustion which is to be the determining iactor in the struggle. I hone J. shall not I<; classed! as pessimistic or unpatriotic, for i assure you 1 am neither the one nor the other; but I am pcr.suadd that, at the prseent juncture, tho greatest optimist and the truest patriot js one Avho proclaims, in no uncurl ain t.mes, the supreme importance of tli-j utmost care in the conservation of l-lio national resources. Unless the koiiiv.. .

ii! supply be limitless, it k plain tint it is only a qusetion of time, and our rate of outlay, when the end of oven the most ample resources must h> icached. This obvious fad is Uv. one which, at tkt> present time, llio British Empire .stands most in need m realising. Diving to tiic segregati m of the Allies, and the distances which separate the component parts ol ..in own far-flung Empire, tho cost of marfchalling the Allies' forces, and placing them at the points wheiv they are inquired to engage in hostilities, is in itself enormous. This is an expense from which our enemies are almost entirely free. The contiguity and compactness of their territories, and, tLe completeness of their strategic lines ■■-. railways, enable them to move their forces in large number* with grout facility and at a minimum of expense.. Therein our enemies have a decided advantage over us. fiut these are not the only advantages they enjoy. For we have to admit that our entire outlay i< on a. vastly more costly sealo than theirs. Our soldtors are bettor pmVI, better clothed, better led, and better cared for. This superiority of conditions, though most conyiicndable. is pur-

chased at a very great price. Again, instead of being, as our enemies largo-

I.v are, acli-contained and self-depend-ent, producing within our own borders the greater part of what we require lor our (support and lor tfiu prosecution of tire War, and discfiarging our internal obligations by means ol a paper currency, we are drawing supplies, civil and military, From almost every quarter of the Globe.-and paying our dvh'cs in coin. This, of course, involves us in enormous additional expense, for the price demaded "By tho foreign manufacturer or producer has to bo paid pgold, and transit charges addicd. Generally, therefore, it js a case of making war on a basis that is calculated 'o strain our financial resources to tit.uttermost. Many of you doubtless have noticed in the Press, within the last u-w months, lot'erenccs Irom tune to time in regard to the adnormal state of the exUnited .States of America. Some ->i change between Groat Britain and Iho you, who may have had business dealings with America, liave had the sigiubiought home to you very forcibly, by iicance of the condition of the exchango your personal experience in discover ing that your British pound has converted into much smaller number m American dollars than JiaK ever hot< been the case. At one time tin fell as low as $3.48 porpouml, against the par of exchange $1.80/.This is equivalent to a loss in British money of £7 18s 4d. per cent., so that for every £100 paid by Great Britain a that time for American gooVls she was receiving goods to the value o , ' only £92 1r Bd. If. theietore, with the eschti-ngo market, in such a position she had bought £l0O,O0T) T a0O of American goods, she would-have lost roiinhly about £8,000,000 through tlie trans action, in consequence Si the adverse

state ol the Exchange. This unfav ourabie position was created through th necessity that arose for dritain to plao such enormous orders lor inunitiod and goods, with America. There wa no immediate prospect oi the huge bal ance in favour t>l America being a<l justed, cither by exports to Amerhi (these Jinving shrunken to small figure since the commenivment of tlio.Wa. , ) or by a settlement in coin, wliiql: would have been disadvantageous tc both countries, ih not altogether impracticable, and tli(< exchange rate fell persistently until It m ichod the ruinous level 1 h a v e mentioned. An Anglo-Frond) visited America with a view to discussing remedial measures, and it.was finally arranged that Hritain and Franco .should raise a joint Joan in Xeu- V () ,k for as largo an amount afc possible. A billion dollars wa«..talked of in the first place, but the amount was iitimatclv fixed at--500,000,000 dollars (about £100,000,00(3 sterling). The issue was made in o per cent notes at COS having a currency of five year«. with an option oi conversion at .•>■;:(nrit vj n to 15-25 year •Ji por ccfft Ijoiulk. The wliole loan vrns unden-, ritton !,y a Xvw »ovk .syndicate at i'tKi. The lerni.s are sufficiently onerous, the co.st to the borrowers being at £9G. about £.*. 10s per cent, and at L[)S about f> $T;}<i j) O r coift. The ofl'cct of the raising of the loan has oecn io improve the exchange rate somewhat. It stood on the 20th

ultimo at 4.(51,':] dollars, wi. unless tbr JinipiVe can reduce iicr demands feAmerican supplies by increasing her own interna! productiveness ,it ■' is ;Imost certain to l'e'cede n<jnin before long, and the boi'rowin»- operation will iu that case have to lie repeated, probably ujioii even more advantageous terms than ihose cxaered in this instance. This contingency will stress what i have already mentioned wi;'ii regard to the need ior produetioM, within our own borders, oi all the essentials of national and munition supplies. Britain's outlay connected with the war j.>, as already indicated, of a steadily iiicrcnsing character. Commencinu: at ihe beginning of the war with about £750.000 :er day it lias now. the Hi-ili-h l'riiiie .\linistt'r informs us. re.'ielie-! die enormous total of_.t*).t;o(i,Oi.d por day, or say jier annum. Oi' this, probably X:1..100.ii()0,()()0 p-,.r aiimnn wi.'i have to be rai.>ed by way of loan; an,; in addition to providing i U r her own outlay JJritain h-i.,. to a large extent, to finance the requirements of her Allies both in money am! munitions. In the early stages o i me war Untain

financed by tliu imuo oi Treasury bil by tender at varying rates, 6'ut all o< low 4 per cvnt. Her urst effort i fund jier war liabilities wa.s made i -Novoiuber, uiion 7>'\ p,r cent war loa o! imOUU,i;WJ u-as at Ido. T:i, was equivaloni to borrowing at -1 pe per tviit. Tho Treasury .shortly aft-: the isitie c.i n;o l(»an iliseontiuuecl th placing i,i Tu'a aii ,-y uIU by tunde and adopirti, iln- n.eiiiihl oi issuing then as iipplieil h.r, .a iLwd I'ates, via. -4, uiul :i : i iur ;i. ;j ; ;UK i (j Inou ths liillfe respectiveiy. in dime last tin ■Ai per cent wai- loan (without liini as to amuiuii; u.\> oifeieu at par, am ca.sh 6iibscrip:iou< ui.aijuat £u8.j,000,00( were■mvnvd. i«,io Oi ueasury uill. continue i<, \ Ji: au.l niy r'ates an now used. :u 0 poi «.f. ia I(ir ' all curren cies. In view ui ilie prceuut rate ol cxpeiulituie it caiun.i oe lung oefon auotJu-r JmiK'j'ial uar loan must bt placed on the markv-t, and tiie increast oi the TmiMiiy bill rate seems tt indicate, when the tiine arrives, at lea- ■ 3 pur cent inwrvai nill Jiave to De olfered. As lar as our staff, including London, Australia ami hjj. is c.oncernvl, everything possible- i« ix'ing done. We have at pre.som" l(jj , IK . n 01l military service and iUU wi.o jiavv and are waiting i» bv rcJieved. Thirteen ol 1 iio.se gone io iroiit have beea billed and twenty-two wounded. 1 am sure you will j uui „,<. m extending our hearifelt u> the relatives *" our gallant oilk-ers uiio have falljn in derencv of Iving i< n<l country. When a>l tbe v.jlimi, ol> |~,, 0 j , lllll(i t))e iojv ws, our Wi n read, like .120M0 per aniiiiiii— in itself a very c-iiiriliiition to the tvar imide. The outlook.-Tiiniing now to matters ol local interest I would remark that prospects continue good for ail descriptions of o f the Dominion's primary products. I.ujrler market for wool has l.eei, assured by the conditional removal of tho embargo placed, shortly after ihv opening of the war' oil exports of w O (,i t0 nctral coun-ti-ies. The export of wool to certain neutral cmintrie.s can now b 0 arrange "■pon tho compliance with such formalities ,-iti aic deeinecl necessary tor the purpose oi attiring that the wool will not reach Ihe hands of the enemy. The elfeei of this ha* been to.enlarge the aroa of competition, and, to appreciably stimulate- prices, more particularly for the class reciiurud by American buyers; Una purciiacsetl on UraJford account has not advanced to a corlespondingly hiyh'luvel.

Tho abnormal pronto that are being Jiiade-by the producers oi this country and others as tin: jvsuh of the war. .should be freely placed at the disposal of the .Enipiry #^jlnscription to tin war loans, or otiicWiije, in order that there may be no iaek of financial strength in pressing the war to amiiuiphal ee.iiclu.sio)i. }'l mv j Sj Jam glad to say, evidence that our people as a whole feel liiis, and act accordingly. TJie large donations that n'ave been made to uar and benevolent iundti testify to the piioiic recognition of tiie obligations, ami tlie recent success of the Government's' local loan of t2,W0,000, which was largely oversubscribed, furnishes strong additional testimony.

Interim dividend. -1 have pleasure in informing you Jhat the profits •or the .ihalf-year ended. 30th "September last..have been rjiiitr* .satisfactory, and the' Hoard have felt fully justified in declaring the usual interim divide id of .(J per cent <m the capital paid up in lvspect of the preference" and ordinary shares. The dividend 'will -be "payable in Wellington on tTie 4th inst., and at'branclies .on receipt of advice.