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BANK OF NEW ZEALAND.

HALF-YEARLY MEETING.

EFFECT OF WAR

DOMINION FINANCE SOUND. Wellington, Friday. The balf-s'csrly meeting of snareholders in the Bank of New Zealand was held this nicr/ung, Mr Harold Bcaucbamp, chairtnan of diieators, presiding. The meeting was for tho purpose of electing a representative of shareholders —Mr William Watsun was re-elected —ami to declare an interim dividend.

Tiia chairman, after feeling rsfsrenca to the dealli of tha Hon. Thomas Fergus, a member of the Boavd, and to tho readjustment of capital, which was fully dealt with on the occasion of the annual meeting, gave an interesting review of Dominion trade and finance. In the course of hia remarks ha said : "On the cutbrpak of war a bill enabling bank notes to be proclaimed legal tender was passed through Parliament, and a proclamation issued making bank notes legal tender on and after August 6th last. The proclamation has been reviewed, sra it will no doubt bo found desirable to beep it in force until the v?ar i 3 over. The object ia not so n-uch to provide cijrrency facilities as to enable the banks to protect tha gnlcl reserves cf the Dominion. The Government further assisted in this direction by legislation prohibiting all export of gold, except such as is specially sanctioned by the Minister of Finance.

"The legal tender not 9 proclamation Las resulted in an increase in our note circulation by roughly half a million pounds. The increase is, how.r ever, no gain to the bank, but rather tha reverse. We have to hold gold or Government securities against every nute issued, while at the gams time we pay taxation to the Government on the circulation at the rate of 3 per cent annum. To this has to be added the coat of printing the notes and of administering the note department of She bank, which makes the total cost of cur note issue 41 to 4& par cent, per annum, "It was not found necessary ,to proclaim a moratorium here such as was required in the United Kingdom. All ths.t was needed was a provision for the protection of mortgagors, and pf purchasers under 'agreements for sale and purchase' with instalments of purchase money falling due. This provision waa made by the Mortgages Extension Act, which prevents realisation hy mortgagees or vendors under powers of sale contained in ssouritiee, except with the sanction of the Supreme Court. "The cordial support accorded to the Bank of England has been one of the most noticeable features of tha crisis from a banker's standpoint. The Bank ruturn published on November 26th ehowH that tho bank's deposits at 25th idem amounted to £55,358,000, showing a proportion to liabilities of 31.60 per cent. HOW THE BANK FARED.

"Viewing cur gensrnl position, Re may be said to have come thr-'UJgh the crucial stores of llie crisis with the minimum of or.\i losa. The foresight of tl\o London Board hnd antii'i»:it?(l Use i»n:int*i«l

difficulties that woiild arjse upon the declaration of war, end r.or,s< j quentl r , when the crisis was precipitated, we were in th« comfortable pes'tion of holding a very large balance of cash at the Bsnk of Englancr. Moreover, comfortably with? our policy, Fthe London portion of our business is invariably'.'canducled with a view j, to ready convertibility, and our advances there are made upon such high-class Eecurity that, immediately upon the Bank of England opening ilu doors to t!:e discount of hills, the greater part of our resources theia became liquid.

"We 'therefore had not, at any time, '(he slightest trouble in meeting all our commitments and providing for all requirements. A3 a mutter of fact, we did not evail of the British moratorium'", but met our I'abilities as they matured.

"It affords me much satisfaction to be ablo to umphasise the fact in so completa a manne?, because it has become the fashion in some uninformed quarters to denounce thfit policy in somewhat strong terms, and to suggest that' the"*_ large amounts we soaietimna'show ts being held by the Bank in London are in speculative investments attended with very considerabla risiis. Had such been the cuyp, you may depend upon it our position at the present, time would have been very "'different from what it actually is, an 3 the pffects of the trouble would .'have, been felt in this Dominion much more keenly than they have been. As matters stand, however the command of financial i'auilities atVaeh a time has enabled us to carry on our business with the smallest measure o£ disorganisation, and the minimum of inconvenience to our customers.

"The sums remark applies in the caae of the other banks in the Dominion, each and all .of whom have apparently done what they could to ease the severity o£ the pressure. A comparison o£ the average quarterly re> turns at SepteVnber 30th with those at June 30th last Bhows that the aggregate deposits of the public had been reduced during the quarter, £504,000, and the aggregate advances increased by £523,000, representing over £),- 000,000 in all—our own share in which amounts to about £690,000. THE IMPERIAL VIEW.

"Too much sUess cannot be placed upon the magnificent service rendered in tils relief of the position by the British Government. It faced the crisis in a courageous and statesmanlike manner, and with prompt and firm determination threw the whole strength of the country's resources and credit to tha support of its finance. The deadlock was in thut way quickly ended. "Tha British Empire'o present experience is fraught with an important economic lesson far ourselves and for every component part of the Empire. The meat cursory reflection will serve to show that the bloate-i asd by pertrophisd military system c£ Germany, which has for year? been the menace of the civilised world, lias drawn the meanu of its sustenance ant] development largely from the British Empire itself. The parts of this Empire the world over have been freely open to German merchandise; the unsuspecting Britisher has traded with the Germs:-:, and British money litis found its way into ilia German Exchequer and helped in li:G construction of tha huge fighting n;a••hiivi which the German war oligarchs have now turned ugainst us in a

mighty effort to bring about our Empire's destruction. "This is I think at the moment generally well recognised. The feeling is expessing itself in the prevailing prejudice against German goodß and all things German. But people have Bhort memories: and when the present struggle, and the racial nnimositi«a that it his invoked, have passed into history, there is a danger that this important point may be lost Bight of, and that we may fall back again into the old groove and be found i engaging again in the foolish business ' of nourishing the enemy that has injured us. The remedy for this ia to turn our attention promptly and resolutely to the development of trade within the Empire, and in that way assist and benefit our own kith and kin. Let both the Stale and individual, in every qunrter of the Empire, seek thus to encourage the growth of the Empire's own industries and commerce. Let us, as far as possible, buy in the Empire's markets, bo that no alien and hostile race shall - ever again enrich itself at our pe nee, ar.d develop its strength, as in thi3 case, through our folly. duration and finance of THE WAR. "It is impossible to jrrive at any trustworthy conclusion with regard to tbe duration of the present momentous struggle. My opinion is that tho end will come sooner than has been expected, and possibly with a dramatic suddenness that will astonish iv s. "In pleasing contrast with the crippled condition of' Germany's war finance, as evidenced by tho conditions and results of her last loan Hotstion, there cffine to ub a few days sgo the gratifying news of the tr.iyunlified pijiccess of the first British war lean iff £350,000,000, offered for subscription about the middle of November. "It is understood that no lobs than £100,000,000 of the stock was taken up before the public subscription lists were opened, and this no doubt contributed to the complete success of the issue.

"It is satisfactory to learn that the British Chancellor estimates that this loan will provide for all his requirements up tci July next, by which time let us hope that the end of the war, if not actually reached, will be well in sight, THE DOMINION SOUND. "Within the Dominion the illeffects of the state o£ war are not very apparent. The withdrawal of the Expeditionary Force of 10,000 men has, of course, affected the labour market to Bome extent, and many businesses are working shortLanded in order to keep places open for the men on their return. "The industries of the Dominion are not likely to be adversely affected by the war, but rather the reverse. Prices for our staple products—wool, meat, butter, and cheese —are aatiafacoti'3', and a large output is assured. Until January, at anv rate, adequate/ - ' shipping facilities appear to be ded, -and we are glad to have the assurance of the Right Honourable the Prime Minister, after communicating with the High Commissioner for New Zealand, that there is little doubt there will be no serious difficulty in providing thereafter insulated eteamers for the transport of all our produce fot the remainder of the season.

"Given the maintenance of full shipping facilities anu n continuance of good priceß for our products, which seems likely, our exports for the current year mßy be expected to ahow a value of at least equal to those of last season, which, it will be rememberod, approximated £25,000,000. "The Customs revenue of tho Dominion has, so Car, been remarkably well maintained. The probability iH thst some shrinkage in imports and incidental revenue will bo experienced later on. If these forecasts be realised, there will be, say a year hence, a much wider margin shown between imports and exports than has been customary in recent years. The Dominion's trade balance on the credit Bide of the account will thus be made a much mote substantial one, and we shall be in a.position to more eaßily provide f«r tha Bpecial outlay connected with the national war commitments, and for private benefactions, which have been on a cornmendably liberal scale. "The ciicumstancea all point to tin desirableness of discretion in the matter of expenditure, both public and private; and whilst the boarding of the money is tu be most strongly deprecated, the husbanding of resources is both highly expedient and commendable. "In view of tho condition of the money market, it is satisfactory to learn that the New Zealand Govern-"*"" ment has completed arrangements for providing the funds required to meet maturing loans, and to carry on tho necessary services of the Dominion . The British Government has, we understand, intimated its readiness to assist the nation's oversea Dominions by advancing to them a portion at any rate the moneys which they.<-4 may require during the currency of the war.

"In this respect the British Government has again shown a masterly grasp of the situation, and has thus merited the unstinted confidence and Bupport of the Empire beyond the seas in this the greatest crisis of the Empire's history. LOANS AND FINANCE. "Our own Government is also to be congratulated upon the prompt and unhesitating manner in which it pledged itself to the support of the Mother Country, and placed its resources in men and money at her. disposal. These are times in which high statesmanship tind.s a congenial field, and in the years to come out sons and daughters will, I doubt not, reap the rich harvest of the good Imperial seed which ia now being sown.

"Meanwhile, the value of money locally is above normal, and likely to continue so for some time. At Home, the demand for cash and credit for the financing of the war ia enormous. Long after actual hostilities have terminated, the huge liabilities which have accumulated will exercise a stiffening effect upon rates, and we therefore sse little present prospect, even under the most favourable circumstances, of any early easing in the financial position. "Loan flotations on account of this Dominion, either locally or on the London market, are for the present quite out of the question. Local bodies have schemes of loan expenditure in prospect should note this, and postpone for the present any active steps in the direction of the letting of contracts which would involve heavy financial obligations. MISCELLANEOUS. "Large numbers of our officers volunteered for oversea military service as sooa as it became known that an Expeditionary Force was being organised. Eighty-three men were accepted for service." Reference was made to Sir James Mills joining ths London - Board, and to the excellent services of that Board at a critical period. The profits for the half-year being up to the normal, a dividend of 6 per cent, was recommended and agreed to. This is equal to a distribution of 12 per cent, for the year.

Permanent link to this item
Hononga pūmau ki tēnei tūemi

https://paperspast.natlib.govt.nz/newspapers/KCC19141216.2.35

Bibliographic details
Ngā taipitopito pukapuka

King Country Chronicle, Volume VIII, Issue 730, 16 December 1914, Page 6

Word count
Tapeke kupu
2,173

BANK OF NEW ZEALAND. King Country Chronicle, Volume VIII, Issue 730, 16 December 1914, Page 6

BANK OF NEW ZEALAND. King Country Chronicle, Volume VIII, Issue 730, 16 December 1914, Page 6

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