NATIONAL BANK OF N.Z.

Hokitika Guardian, 25 August 1930, Page 2

NATIONAL BANK OF N.Z.

CHAIRMAN’S REVIEW. OUTLOOK IN THE DOMINION. The review by the chairman of the National Bank of New Zealand (the Hon. Pernber Reeves) at the annual meeting of the bank held in London on July 16th, provides a lengthy survey of the economic position and outlook in New Zealand. Extracts from the statement are as follows: Our paid-up capital remains un- . changed at £2,000,000, and our reserve fund stands at the same figure. Note • circulation at £1,116,000 is normal, and has ruled so throughout the year, the average being £1,112,600. The average note circulation of all the banks in New Zealand during the year was, say, £6,422,200, and they_ had the right of issue up to £11,855,000. Deposit and current accounts are £12,166,000 as compared with £lO,567,000 for the previous year—an increase of £1,599,000. On the other hand, bills payable and other liabilities have decreased £980,000.

THE ASSETS. Turning to the assets side of the balance-sheet, coih, bullion and cash at bankers are £169,000 higher than at March 31st, 1929, and investments now stand at £2,450,000, an increase of £220,000 over last year, Bills receivable show a decrease of £526,000, wholly accounted for in wool bills; the lower prices for this commodity have muc-ii reduced the return, Advances stand at £11,248,000, as compared with £10,362,000 at Miareb 31st. 1929 -an increase of £886,000; they are well spread and a high proportion is in liquid accounts. In common with other banks we have had to meet heavy demands brought about by increased imports, the fall in prices of our main quantities of wool from sale. Provision lias been made out of profits for the year for bad and doubtful debts, and I am pleased to assure you again that all contingencies have been fully provided for.

DISTRIBUTION OF PROFITS. Coming to our profits and their distribution, I feel that some explanation is due to you. 1 hinted to you last year that we. had the question of continuing to pay the bonus under consideration, and that if we thought it necessary in the future we should not hesitate to withold or reduce it. Yon may ask, however, why we have done so, for though our net profit shows a slight reduction of £7700 our actual trading profits for the 12 months have been larger and not smaller, so that, had we wished, we could have paid the bonus. The answer is found in the general position of markets throughout the world, New Zealand is a producing country, the whole of whose export trade consists of food, raw materials, and minerals. The almost universal fall in the prices of these commodities is bound to be severely felt, and its duration cannot at present be guaged with any accuracy. We may hope for better things, hut we must prepare for a dull period. Moreover, we are faced by an almost certain increase of taxation, both in the Dominion and in England. OUTLOOK IN NEW ZEALAND. The outlook in New Zealand, while neither unsound nor alarming, is one of difficulty, and our position at tne moment is complicated 1 by the demoralisation for some months past of the Australian exchange rates. You have probably noticed that between July last year and April of this year there were no fewer than seven changes of these rates, resulting in a movement beyond all precedent in our New Zealand rates. Only in March did the New Zealand banks feel justified in ceasing to move their rates pari passu with the Australian, and since then the rates between New Zealand and London have remained considerably low than those quoted in Australia. The net outcome of the exchange trouble to our company has been a considerable hampering of our operations between London and New Zealand, We have, however, been able to- avoid imposing restrictions on. our customers’ requirements. Australia’s enormous recuperative powers require no emphasising by me, and I hope that the worst is now past; but I must say candidly that I cannot pretend to speak with any certainty.

HIGH STANDING OF NEW ZEALAND CREDIT. The five per cent. New Zealand loan of £5,500,000 was floated in London at a very satisfactory figure of 99. The issue was extremely well timed and was quickly taken up. The conversion. operations in London have met with complete success, one result being the transfer of over £6,000,000 of the Public Debt from. London to New Zealand. All the same, the new Prime Minister of New Zealand will be well advised to put as little strain on the friendliness of the London market to New Zealand stocks as the financial position of his Treasury will admit. New Zealand newspapers and public men are wont ,to dwell with legitimate •pride on the high standing of the Dominion’s credit in London. If tin's is to be preserved there can be no better way of doing so than for the New Zealand Government to make some approach the dim and distant ideal of living upon its ordinary revenue. For

20 years past this ideal has rather receded than come, nearer, except in 1927-28 during what' I may term—hope without offence—the death-bed repentance of the Reform Party (Laughter.) A contraction of borrowing and spending may be unpleasant, but it is overdue and ' clearly should be faced.

PRESENT PLIGHT OF NEW ZEALAND PRODUCERS.

In passing from the position of the New Zealand • producers;, it is impossible to avoid expressing sympathy with their present plight. Twelve ago, and for years afterwards, they, in common with producers in other countries, were told by economists, statesmen, and financiers of all kinds that their duty was to take their coats off, toil steadfastly in'the production of wealth, and by. so doing make up the waste of the War and restore prosperity. They have toiled and produced wealth, with the result that they are confronted with one ol tne most appalling collapses in world markets that I can remember. When they ask for reasons they are told by authorities, from the Chancellor of the Exchequer downwards, that there has been excessive production of food and raw materials. They may be pardoned if they ask whether this is a fair reword for their exertions

The scientific precaution against coughs, colds and influenza—disinfect the circle of infectiqn, that is the passage of the nose and throat, with “Nnzol”. A powerful, penetrating germioide. Keep it always handy. New double size—l2o doses for 2s 6d. ~-Advt.