BANK OF NEW ZEALAND

Hokitika Guardian, 11 December 1925, Page 4

BANK OF NEW ZEALAND

lIALF-YEARLY MEETING. WELLINGTON, December 11. The half-yearly General Meeting was held to-day, Sir George Elliot (Chairman of Directors) presiding. The Chairman said:— I suppose every Chairman foi man\ wars has said at the half-yearly meeting what I repeat to-day—that there is 0(7 business to bring before you. and that the holding of this meeting is therefore purely formal. As a matter ,j- raet, the only business that is ever done at the half-yearly meeting is the eleetion of a Shareholders’ Director. i’v the amendment of the Bank of New Zealand Act in 1920, the term of appointment ol all Directors was extended from two to three years; every 'bird year, therefore you have, as to-day no va'cany on the Board to fill, if any fresh legislation in connection with the |sank were contemplated in the future, the abolition of this meeting might well be considered, and the appointment of the Shareholders’ Directors be made at the Annual Meeting. Although there arc no accounts to lay before you. it is pleasant to be able t„ state that the operations of the Bank for the half-year which ended on

. j. ( , ;j|)th September last, are ol a satisfaetorv character. INTERIM DIVIDEND. The profits earned during tfiat period warrant the payment of an interim dividend on the Ordiary Shares at the same rate as that of a year ago, vi/.., Is -Id per share on the capital that was paid up at Ist April last, and of 2d per share on the small number of the new shares—l,233 —which, not having been taken up at that date, were allotted on 7th September. This dividend will he payable at Wellington to-mor-niw, and at the Branches on receipt of advice. Since our Annual Meeting, a Commission has been set up to inquire into the question of Rural Credit Associations, or Agricultural Banks, and to report thereon to the Government. The Commission has left New Zealand with fairly free permission to visit any country where Banking systems, having for their main object the financing of primary producers, are being carried on. hi February, 1923, the Primary Pro-

ducers’ Bank of Australia Ltd. was regsitered with an authorised capital of £-1,000,000. Gp to September of this year £2,275,000 had been subscribed and the Directors expect that within a comparatively short time the whole capital will lie’ applied for. Branches and Agiencies numbering 71 had, by September last, been opened for business, and the Primary Producers’ Bunk is represented in every State of the Commonwealth.

There is already adequate legislation in New Zealand to (‘liable a Bank to be started here. and. if tlm demand tor

a Farmers' Bank arises out of a genuine desire on I lie pari of the farmers, they have an example very near home Hint they might with advantage lollow. During the recent Parliamentary eleetion campaign, the iniquities—so called—of the Bank of New Zealand have been a favourite subject of certain Parliamentary candidates. Indeed, I' do not think any institution in the countrv has been the subject of more abuse and misrepresentation. lour Directors have not thought it necessary to enter into the arena ol disputation in the attempt to controvert the reckless statements which have been made, but I think that as certain of them are still fresh in our memories. I shall be excused if I make reference to one or two of them now.

One gross exaggeration tiiat has appeared. has been a calculation of the manner in which money invested in the shares of tin’s Bank a good many years ago. lias increased in value. Another ingenious candidate tor Parliamentary honours proved, to his own satisfaction at least, that if the HtnL* look over the Bank of New Zealand, the nrolh:- it had earned for the year ended March las| could have been Used to increase the wages of 50.000 workers by a certain amount weekly. The amount paid by the Bank in taxation has a Iso been a favourite topic of some of our critics, who have pointed out that the amount Inis been considerably reduced during the last three or four years. This has certainly been the case, as anybody may see by coinparing the figures shown in the published reports of those years. The reduction, however, that has taken place is the result of re-adjust-ments in the scale of taxation that have affected not only this Rank but. all large payers of Income Tax. These largo pavers had, during tlm war time, to bear a disproportionately large share of the increased burdens which were then plated upon the community, and it was understood that, when readjustments were made, some part ol this disproportion would he rectified. The suggestion appears that, because the liiuik is :i targe concern, it ought to Ik* paying into the eofl'ers of 1 lie Stale iii the shape of taxation an even larger proportion of its earnings than it dees at present. T would remind you, however, that though the Bank is undoubtedly a large business, it is not owned by one or two individuals only. There are to-day more, than 5,300 shareholders in the Bank; more than two-thirds of this number own less than

.£5111) of the capital each. The ownership of the Bank is, therefore, widely distributed among tl-.e people of New Zealand. Without referring to any other quotations from electioneering speeches, may I say this: 1 am a Government nominee on the Board of the Bank, and by law I do not require to hold any shares to qualify me for the position. I have not now. nor have I ever had, any share interest in the Bank of New Zealand directly or indirectly. 1., therefore, cannot be accused of being biased by self interest in my judgment. I bare been on the Board for about six years, and I can testify that the business is carried on in what, the Directors ((insider to he the best interests of the Dominion as well as of the shareholders.

There is ;i matter which T think should ho brought before you. :ind that is the great extent to which the hirepurchase. or time-payment system, of dealing in articles from a gramophone to a motor-car, from a perambulator to a building section, is becoming a feature of this country’s trade. The good old-fashioned notion of buying an article only when one lias money to pay lor it seems to have gone by the board. Almost any article can be, and is now purchased on the payment of a few shillings a week and upwards. That the system is pernicious needs no argument ; it seriously affects legitimate business; it is costly in the extreme to the purchaser and it tends to breed a habit of reckless extravagance. There are, of course, exceptional occasions when the system may he of advantage. hut. generally speaking it is a dangerous practice for buyer and seller alike. Any serious financial setback would have a disastrous effect on those whose trade is largely made up of the selling of goods on the timepayment system. The Cash on Delivery System, commonly known as tile C.O.D. system, is extending in New Zealand.

This is a system by which a merchant in England rail send goods through the Post Oflite to a customer in New Zealand: the Post Office officials here collecting from the customer the cost of the goods, plus Customs duty, and remitting to the merchant in England the price of the goods, and to

the Customs Department here the duty collected. ~ , Yet this system in'New Zealand had not crown to large dimensions. For the year ended June last, 4,3s3jparcels of an aggregate value of £12,771 7s 10d, an average per parcel of slightly over £2 13s, were imported, the smaller towns imported liy far the greatest proportion of those parcels, and the shopkeepers in these small towns, who deserve all the protection t l, e state can extend to them, are being detrimentally affected. I think this system might well be abolished. It would, of course, he unwise to attempt to stop private peop e from importing articles if they desire to do so. hut it is quite another matter for the New Zealand Government to act to all intents and purposes, as rents’ for British or Continental exporting firms. Apart from the C’.O.D. System, people who desire to do their own importing can do so in the ordinarv way. bv remitting the payment for their purchases by hank draft or post office order, and no trader in the Dominion could possibly take exception

to such a course of action. The verv fact that the Associated Chambers of Commerce condemn the system shows that traders there are keenly feeling this Government-assisted competition, and, if traders in Britain are feeling the competition, where conditions between Britain and the Continent arc more alike, there is greater reason for New Zealand traders to take strong objections when conditions are so dissimilar and the change of a reciprocal trade being developed so miscroseopie.

Notwithstanding the lifting of the embargo, which was recently imposed on the floating of Foreign and Colonial loans in London, it is difficult to get money there at the present moment, except at a high rate of interest. In view of the depression of trade which prevails in Great Britain, the high'taxation and the enormous public debt to America, it is doubtful if Colonial Governments can look to London with any confidence to supply their monetary wants for some time to come. It is doubtful, too, if America will supply our needs in the meantime, lor it is quite apparent that the American public was not enthusiastically interested in the last Australian loan floated there. Vnderwriters and speculators must, have been left with a large proportion of it. for even quite recently every lending institution in this country was being ollered large quantities of the Australian loan by American brokers. The difficulty in the immediate future of raising loans may lie a blessing in disguise, il thereby a brake is put on public borrowing. Much ol the recent expenditure of Local Bodies has been unwarranted. 1 lyrdo-electric reticulation schemes, especially those serving scattered populations, must lor many years bo a burden on the ratepayers. There has also been unjustifiable ex--1 penditure by Harbour Boards desiring ■ to encourage overseas shipping, upon harbours where the total export trade of the district served would mil, il the produce could be held Up lor a vear, completely (ill one average sized ship. ’ ...

As far as the flotation of loans is concerned. New Zealand will in the future, 1 think, have to depend upon her own resources to a greater extent thou has been the case in the past; and. unless loan issues are carefully and judiciously spread, high rates ol interest will have to he paid. Economy lias been preached Iroin this Chair for years, hut it appears to me that it would he .superfluous to say much upon that subject fo-dav. There are signs of the times which may easily he read and which: at: the moment indicate that economy will be forced on the public and Local Bodies whether they like it or noi. Il is not an original idea, hut I think il is a good one. that contemplated ex|.enililure by public bodies on local works should first, he reported on by a competent Government official, and tlml ibis report should be circulated throughout the district he fore a vote of the ratepayers is taken on the question. ’I liming now to primary products, it is satisfactory to note that the prices obtained during the past six months lour he,a: fairly good. DAIRY RBODITE. fu most parts of the country a. very wet winter and late spring have been experienced. This has had the (‘licit of greatly reducing the output of the dairy factories. Cows have been in poor condition, and the total yield of milk has been much reduced. The grading statistics for the three months that ended on 31st October, show that the quantity of butter graded was 3,033 tons less than in the corresponding period in 1924. while cheese graded showed an increase of 535 tons, the Loud showing a decrease, in terms of butler-fill, of 13.-1 per rent. With the advent of warmer weather, pastures have greatly improved and dairy factories are now receiving satisfactory quantities ol milk and cream. It is doubtful, however, if the decrease in production experienced at the beginning of the season can now be made up. Although there has been this diminution in quantity, prices have been satisfactory. At the opening of the season some factories reported sales of their output ot cheese lip to the olid of December at ORI to OfJ l l per lb., and il is estimated that SO per cent, of the production to the end ol the year has been disposed of at prices which mean a payment ol about Is Bid per pound for butter-fat. Sales of Ootobor-Noveniber makes of butter have also been reported up to Is 7J il per lb. Good monetary returns for the first half of the season are. therefore, assured. WOOL. The downward course ol price-, appears to have In',pi arrested, and there is a steady, if somewhat limited, demand. At the rcient London sales. and those held ill Australian centres. C'onlilient.nl buyers have been the main support of (ho market. Ibe Home trade, while slowly recovering from the disastrous cxerience of the last few months, is only operating under a general policy of hand-to-mouth trading. Prospects for the new clip appear to be tail l.v good, and prices, although well 1.e10,v those recorded at the opon-

jug last year, should be at a remunerative level. MEAT. On account of strong competition amongst exporters, farmers received higher prices for fat sheep and l lanihs during the past season than were warranted hy prices ruling in the world’s markets, and exporters had to bear heavy losses on the realisation of their purchases. Owing to the unfavourable weather, the present season is likely to he a backward one.

'l'he future of the market is somewhat uncertain, but it is reasonable to suppose that prices this season will not Ix 3 <m so high a level as those ruling last year. There is no occasion to take a gloomy view of tha future, but there can Ik? no doubt whatever that the present should he at rallying time for the industrial forces of the Empire. In New Zealand, for example, it should never he forgotten that Britain is our great customer, and everything possible should be done by the Government and the individual to encourage and foster British industry, for oil the well-being of the Mother Country. New Zealand absolutely depends for a continuance of her prosperity. Tf. therefore, New Zealanders and the peoples of the other Overseas Dominions will assist by buying British goods, and. as far as p assible, British goods only, made by British workmen in British factories, a sorely needed industrial revival in Great Britain should ensue in which New Zealand and all the outlying parts of the Empire will beneficially participate.