BANK OF NEW ZEALAND

Hokitika Guardian, 16 December 1921, Page 4

BANK OF NEW ZEALAND

H A LK-YEARIA’ AIE ET IN G. WELLINGTON, 'L’his Day. The liall-yenrly genoNal meeting was held to-day at the, head office „f the Dank, l.ambton Quay, Wellington, Mr Harold Beiiuelnunp (Chairman of Directors) presiding. The Chairman said:—, This lieing the half-yearly general meeting, there is, as most of yon ate aware, no statement" of accounts tor presentation to you. The only actual business to be transacted is tbe election of a shareholders’ representative on t lie Board, and the declaration of an interim dividend. As to the former, I have to state that the retiring Director, M.r If. \V. Kane, has again offered .his services, and, there being "u other candidate, 1 have much pleasure in declaring him duly elected. -Mr Kane is at present in London, but expects to return to the Dominion in the early part of next vear. f understand Mr M llliam Watson "ill return thanks for his colleague’s re-election. Although no accounts are submitted, L am glad to say that the protits lor the half-year ended 30th feoptembei hist while not equal to those of the September half-year in ID*2O, compare quite favourably with those tor the corresponding period of any previous year. The interim dividend therefore, has been fully earned, and. as we judge from present indications that the Results of the current half-year’s working are also likely to prove satisfactory, wo have no hesitation in declaring itWe projiose to distribute the sum ol C2H3,125. which, apportioned in the manner laid*down in the Act ol 1920, will pay the preferential dividend (for the whole year) to which the Government is first entitled as holder ol the Preference “A” Shares, Cob,ooo, a dividend upon the Preference “B” Shares, £21,875, and a dividend at the •rate of Is 2d per Share upon the Ordinarv Shares £131.250; total, £203.125.

These dividends will In- payable in Wellington to-morrow and at Branches on recoint of advice. The course of oveuts during the past six months and the continuance of the financial stringency have caused all sections of the community to give serious thought to the altered economic conditions, and it may solely he said that a better appreciation now obtains ol the realities of the siiuntion. In my remarks at the .lime meeting 1 dealt with the dillietillies created by excessive impoitations. Largely owing to the step.1 alien by importers ijtenvrally. and tbe assistance rendered h.y tbe Hanks, the position in tbe interval lias improved. Phe meastucs adopted included selling et or under cost, reductions in overscad charges, and with other economics have bad the client ol a general levering of prices to tbe pnMic. (Inr I'armei friends are feeling the pinch severely. Pa l l ii iliarly is this tile ease with those wlio paid inflated prices for their land, and are knitted "ith a d.tul weight of mortgages, and also with those who, not content with their holdings, have added to their liabilities by taking up more land. Apart altogether from these eases, however, it must be recognised that the all-round drop in pricos, and the increased charges for handling, have seriously alleeted the bole of Liie producers, and they are finding it difficult to accommodate themselves to flic altered eircum-

stances. Their iiniiirtumitc condition Ins boon placed helure the Government and the public very persisteiitv, and various schemes have been suggested as •iteans of allevi.iliug their trouble, or improving the facilities tor the handling .:I their products. .Most of these suggestions have boon ill-considered and uiihusiucss-likc, and such ol them as might he worthy of investigation involve the raising of large amounts of capital, which at present is quite impracticable. Improvement in the methods of handling our products mid reduction in the relative costs are highly important factors, and deserve the most earnest consideration. Increased production in the ninxl saleable of our enmnuidities is of is;lml lent. The culling of unprofitable cows and improvement in our dairy herds should, for example, he regarded as a matter of pat amount importance. The prospect of exporting frozen beef

on a profitable basis is most unpromising. No doubt n great exteiit of country, hitherto used for, fattening bullocks, can be turned to profitable account by dairying, so that in future butter and cheese may Heroine the most important of our exports. This matter is mentioned here lit illustrate one way in which production can be increased. Scientific methods of farming and treatment of the soil lire also factors which must receive careful attention. j . Tbe banking institutions have been sriticised in some quarters for not lending more freely. Generally, spooking, however, it, lias Ireen admitted that the Banks have dune their utmost to meet the heavy demands made upon them during these very didicult times. Banks, as is well known, deal in credit—that is, they receive the savings of the people, either lor fixed periods or repayable at call. This credit is lent , to those who need accommodation, hut the Banks must at all times maintain !an adequate proportion of liquid re- | sources to meet deposits. Thus it will lie seen that the lending facilities »f the Banks, or the credits at their disposal, are restricted, and in times like the present t,he restriction is accentuated by the demand from depositors for the return of their funds. Notwithstanding this, it will he seen from the figures which I shall now quote, that the Bank .has used its resources to the fullest extent in assisting the primary industries and the traders of the country to carry on. LAND VALUES.

The very high prices obtained for our primary products during the war years led to a quite unjustifiable increase in land values. Land was valued and trafficked in as if these abnormal prices had become stabilised. Little or no thought was given to the inevitable fall, and. unfortunately, instead of liabilities lieing reduced, financial responsibilities were often largely increased.

It is essential, however, that land values lie brought hack to a safe level, having regard to the conditions which now prevail. To ascertain what the actual value is. intending purchasers should go as carefully into the transaction as if they were purchasing a business. A vendor ol a business produces his hooks showing his turnover and piofits, c;te., fur a period of years. A farmer should also produce his hooks when disposing ol his holding. Ihe rough and ready method of land deals which has hitherto prei ailed should become a thing of the past. It. will no doubt he churned that in the Old Country tlie stewk has to he ii.utscd lor a gieal Hart of the .Near, and. 111 course, rates and taxes are flinch higher there than here; hut auainst any such disadvantage’s must lie set the nearness ill markets, providing a ready sale at higher prices tor e\ ' t\ll.i ne. pmdiioed. i.lcepe l labour, Cie. Aibluilig 111 Nen Zealand all the advantages that may he reasonably claimed tor it. there can he no justification for maintaining that improved Hi rut lands in New Zealand tire Worth double the price of similar land in rural England ; therefore I repeat that tin* values of lands in the Dominion must lie brought down to a more reasonable pew I before production can he reduced. Labour on farms is nut as costly now us it was six or twelve months ago. Steamer freights have been reduced slightly for one or two products, and I t (link We may look for lorthor ic’dnelions. since Atlamie freights have been very substantially reduced during the past few months, and the movement is hound to extend to die Pacific. Since dialling these remarks, all appreciable lednetioii in rates ol Iroight has been made* by the regular lines, and lliis will lie of material assistance to producers and others interested in the handling of our p'oiiueis. Railway heights, ton, must eiiine down, for I hey play a very important part in the cost of marketing die nimitryb produce. HANK OK ENGLAND PATE. The lor. cring of the Bank ot England minimum discount rate to 5 per i-ent is •m indication that, credit has been accumulating wit.h the Bank til England and the great London dnint-Steek Banks, ft. would lie easy, however, to view this reduction in nile I rom too wrong angle. Credit has accumulated because tbe industries ol Britain have been languishing, and money has been hoarded by those who are indisposed to end, arl; upon fresh enterprises until

tliey feel ;i greater sense <>l' security. There is still a great deal of uiiciiipluyineiii in the I 'ailed Kingdom, mul trade, liotli domestir and foreign, is m itliin small compass. The easier tone ui tlie London money market may lie regarded as probably merely temporji iv. It is unlikely that foreign or Colonial (lovernmenls will he aide to I .or row there for some time to mine at much less than (ij per relit. Nor is the reduction in the Haul; of England rate likelv to have any appreciable client 1111 the market pvires of New .Zealand produce. The problem before British maniifaetmers is to retime the costs ol their merchantable products, and, as a step ill that direction, there have alivady been numerous reductions in the wages of British workers. As this means restricted purchasing power lor the masses, it would ho Itiiile, umlei present conditions, to expect British

p.rices of our produce to fisc.. The steady influence of reduced produce prices and the financial stringency ill New Zealand is to lie seen in the contract-i‘on of our imports. KroTM April Ist., 1920, to March 01 1921, the imports exceeded the exports hv £19,219, 227 and that leeway has to he recovered. Importers have incurred heavy losses, but that was, unfortunately inevitable. It is to he feaied that liquidation is still far from complete nevertheless, as I have already mentioned, a start has i>eei. made and a good deal accomplished. The, heavy losses incurred by fanners and traders will be reflected in the returns for income tax due in the finaneml year 1922-1920, and it is evidently to provide for this contingency that the Govwrmnent has brought in a revenue tariff. The Post Office Savings Hank also reflects the changed conditions now existing. while the number of depositors lias increased by 9,086, the aggregate | at credit of depositors has shrunk £IBO, II 149 in the period of six months, notj withstanding that more favourable 1 terms are now offered to depositors .! than in former years.

The need for public and private economy is as imperative now as at any time —perhaps more imperative—and

there must be no relaxation in our j ( efforts in this direction. > I A recent analysis of the amounts paid j \ in Income Tax by several classes of j i contributors shows tlie following:— i

The figures are for the,financial year ended 21st. March, 1921, The tax, it will lie noted, falls very heavily on the Companies, as they are assessed as individuals, and in most cases have to pay the maximum rate. There does not appear to be any immediate prospect of a reduction in the Income Tax, but a rebate' of 10 per cent is procurable for payment on due date of band Tax, a concession which is greatly appreciated under existing conditions. It is pleasing to note, that more than half the gross amount is held in New Zealand, because the interest on that portion will lie disbursed in New Zealand. It is likely that this New Zealand debt will eventually be transferred to London for as tbo locril loans mature, the money will most probably lie called in. Those who took up War Certificates and short-dated T*ost Office stocks and Bonds will doubtless require the money and those who contributed, at considerable inconvenience, under ■ the compulsory clauses of the Act. will also l>e anxious to get their capital back. In a country where rapid development is in progress this is to be expected as funds will be wanted for devevernmelit will have ample time to prepare for eventualities, and! perhaps in the end tlm difficulties may not be very great. There is danger at the present time of ill-considered schemes and panic legislation linding favour with the masses of the people. That has been the experience of the past and must ho guarded against. There is no easy road to prosperity, no short cut out of our present; difficulties. Maid work and economy ate the sovereign remedies for our present ills and the more constantly and thoroughly they arc practised till' sooner and the more complete will be our recovery. To dwell upon the prospect of our produce ptices recovering to war ! levels would be merely the rcI sort of a people despairing and bankrupt of resources. The chance of such recovery is altogether too remote to warrant an v such expectation. All the economic conditions point in an opposite direction. The tendency of commodity value is downwards, and the very circumstances of the people of Europe make that inevitable. They are too poor to buy at high prices, consequently values must drop to a point at which the commodities will be brought within the purchasing capacity of consumers. To bring, down the costs of production in New Zealand, wages as one very material element in these rosts must fall. It would limvever. he quite unfair to expect the workers to submit to reductions ex- ' cept in relation to tlie lowering of tlic cost of living. The decline of commodity values will doubtless bo somewhat slow, because of the natural disinclination of producers and manufacturers to accept lower values and also because the new Customs tariff will, in j some eases, operate to maintain prices I at the higher level

The interests of New Zealand are intimately bound up with Great Britain for Britain is onr most reliable customer. But, unfortunately, the Mother Country is faced with numerous and great difficulties. She is carrying a heavy load of debt, and, while alt the world needs her manufactures, few of the nations are able to pay a lair price for the goods they require. It is mainly that difficulty that has been delaying revival of British trade. When it, is overcome, as there seems some prospect that it will he- Mr Lloyd George having promised to extend tlie Export Credit scheme—there will be some likelihood of the British masses being more fully employed and consequently getting into a better position to purchase, in larger quantity, the produce wc are able to send then). • DISARMAMENT. There is a- menace against which Britain and the United States have to be on their guard. Messrs Samuel Montagu and Co., the well-known bullion brokers, in their circular dated London, August 25th. remark: “The development of the commerce and of the well-being of many countries is arrested and their people impoverished by the heavy burden of taxation, which is largely increased by military expenditure. Besides the vast sums of money which are thus dissipated through unproductive channels, millions of men are taken from industry and become consumers instead of producers. The United States Congress has voted 836,000,000 dollars for military and naval purposes, Great Britain £193,000.000 while France has to provide nearly five milliards of francs for an army of nearly 800,000 men and a milliard for naval expenditure. Many of the nations, whether solvent or hopelessly bankrupt, continue to pour out their money like water on military and naval establishments, white projects for the bettering of the people are starved for want of funds and debts remain unpaid. Germany, however, furnishes a notable exception as in accordance with the provisions of the Peace Treaty she is relieved of the incubus of a heavy expenditure on an army and navy, which formerly weighed down her finances, and she is now free to devote money and men to the improvement of her industries. If it be realised that the annual payments by Germany for interest and sinking fund op the 51.50,000,-

I 000,00(1 gold Reparation Bonds amount to about 713,000,000 dollars, and that e the sum appropriated for the fiscal year 11)21-22 by the United States Congress. t for military and naval purposes is t nearly 830,000,00 dollars, the full sig- \ nifieance of the boon to Germany will [ he understood.” . ... . : 1 Under such conditions Germany must ; j became a powerful economic unit be- . fore many years pass unless the nations , 1 agree to disarmament and release men | and money for agricultural and indtts- i trial, development. ’ When one considers the stupendous losses of human life and money, as well j ns the untold misery and, suffering occasioned by the Great War, all will j agree that no avenue should he left | unexplored in an honest endeavour to I find means to prevent a recurrence oi , | such a world tragedy.. In addressing j ! tlie House of Commons in December, j i 1920, Mr Lloyd George estimated the losses of all the lieliigerents a.s follows > T„ casualties 30,000,000: in deaths ! <1,000.000 : in money, directly, £50,000 000,000 and indirectly £07. 000. 000,000. Surely these figures make an eloquent aiid touching appeal in support of National disarmament. In the eircum- j stances we cannot but hail with deepest j satisfaction the efforts which are now being made at the disarmament conference in Washington to arrive at an understanding among the great Powers which will admit of an immediate and large reduction ol this crushing and exhausting expenditure upon at moments. The relief which such an understanding will give to the whole civilised world at the present time, staggering | as it is, for the most part, under the ’. huge burden of enormous liabilities incurred through militarism, which has wrought nothing hut destruction, will lie of inestimable value. Let us hope that the arrangements concluded at the Conference will lorm ' the ground-work of a foundation upon which tlie statesmen c:f to-dny and ot ' the future will fashion, cither through the agency of the League of Nations or i trough soitte other channel, a Council or ■ Court of Arbitration through which ■ international differences may he adpist- , cd and settled, so as to render impos- , sivle any future resort to force of arms. Three-quarters of a century ago a gifted American Longfellow, pre. I eminently the poet of .tnglo-Auiericatt I ideals and sentiment wrote in a spirit - which, it is to he hoped- will prove to have been prophetic: Were half the power which fills the world with terror. Were half the wealth, bestowed on camps and courts. Given to redeem the human mind from error, e There acre mi need of nmuls or forts : 5 Tlie warrior’s; name would by a name abhorred ! And every nation that should lilt n pi in } Tts hand againM :i Eotlur. on its 1 forehead I WnuM v.-r-n* lor evermore. Iho rtirse r of On in ! I,et ns hope and believe that this far- _ off vision of Anierien’s greatest poet is about to materialise, and that through I the initiative taken hy the American nation in this henofioient world movement, the peac o ' f all nations may he 1 ultimately established oi: a inn and ’ lasting basis. THE OUTLOOK.

Reverting to tin* immediate outlook for Now Zealand I may, in concluding, remark that our prospects are not perhaps so el corny as may at first sight appear. We have it on the authority of Mr Lloyd Oeorge, abs# on ik authority of the Financial Editor of the London Times that the trade depression in England is passing away, ll is said that the bottom has been touched and considerable progress made with tbe liquidation of commodities which could not ho sold last year. Tn this connection it is interesting to observe the very satisfactory increase in the export of Welsh coal, which is rapidly nearing the proportions of pre-war days. Prices of raw materials are advancing, and wo know that wo.d has already improved somewhat in price. Reports show that there are distinct signs of a. general improvement in the woollen textile trade of Yorkshire, and tho wool sales held recently in various centres have disclosed a firmer tone with a. good demand compared woh that existing some months ago. Meat is still under a ctoud. hut thor* ue

prosjieets nf economies and reductions being made in the cost of production and marketing, such as lower freights and a more reasonable scale of wages. Tlie highly optimistic views entertained with respect to butter and cheese have not. materialised and both have receded in value very considerably. Still, factories are now receiving advances of Is 2d per lb for Imttor, and 7d for cheese, and the payments now being made for butter-fat cannot be legnrdod as unprofitable prices to those suppiets who are not overloaded with mortgages and bills of sale over shock. Moreover, any further decline in both butter and cheese may be arrested, if the working classes in Britain become again f-.dly employed. There does not appear to be, in the meantime, much prospect of opening up any now, markets for wool meat, butter and cheese. The United States, under its Emergency Tariff, has practically shut, out Australasian wool, and American sheep farmers ale asking for yet further protection. Our trade with the United States is likely therefore to contract.

I would again emphasise this fact: Wo in Now Zealand must concentrate on making production pay, and that can he achieved by hotter organisation, greater economy, more general efficiency, elimination of waste, and, most important of all, l>y steady and consistent hard work.

“Work alone will fill the depleted tills of the world,” remarked Mr Lloyd George in his speech at the Guildhall Tinnquet recently, an apt declaration in epigrammatic form of the most pressing need of the times in which we arc living. Few will he found to question its truth.

T.et me supplement it h.v repenting the admonition of the old-time preacher, addressed to the workers of all time: “Whatsoever thy hand (indeth to do, do it with thy might.” This is. T-apprehend, a precept which the workers of our time greatly need to take to heart; but T am satisfied that if all our workers, whether with brain or sinew, adopt it and practise it as tlieir) rule of life and conduct, we may look oouraoeously and cheerfully forward to the future, and meet, fearlessly whatever of ill-fortune it may hold in store for ns.

With the object of making an inspection of our London Office and its business. tlie Chief .Auditor Mr R, W. Gibbs will leave for London via, Australia, in February next. Von will, I know, join with me in wishing Mr Gibbs bon voyage ai\d a, safe return. During his absence from the Dominion the Governnjent have arranged with Mr R. ,A. Holmes, for many years Resident Inspector in New Zealand for the. Union Rank of Australia, Ltd., to act ns Mr Gibb’s Jocum tenena,

1 f-~ Mr Watson said:—Mr Kano lias ask- j il mo to tako this opportunity to thank J rhc shareholders on his behalf ior again ■etui niiig liini unopposed as <;ne of heir representatives on the Board, air! ' ,o jn-snre them of his con tinned close attention to their interests. I have much Measure in thus conveying his thanks, tnd from my own knowledge stating that his time in,.London has been spent L largely to the Bank’s advantage. He is q expected hack here early in March.

Mo. Total Tax Per. cent, of Paid. Total. Companies .. 2,317 64,970,647 62 Traders, manufacturers etc. . .. 10,406 97,811 124 Non-resident traders 637 49,409 4 Salaried, persons .. 7,283 219,376 25 Professional . 2,129 172,667 24 Dec-eased etc-., estates 2,742 246,343 3 Land owners .. 11,648 779.045 94 V isrA'lla neons 7,375 598.983 74 44,597 £8,034,281 100