BANK OF NEW ZEALAND.

New Zealand Times, Volume XXX, Issue 4410, 8 May 1875, Page 3

BANK OF NEW ZEALAND.

(From the Southern Cross, April 30.) The half-yearly general meeting of the proprietors of the Bank of New Zealand was held yesterday, at the banking-house, Queen-street, at noon. There wera about twenty-five shareholders present. The Hon. James Williamson, M L.C., Chairman of Directors, presided. D. L. Murdock, Esq., the Inspector, read the advertisement convening the meeting, and also the minutes of the last half-yearly meeting, which were confirmed. REPORT AND BALANCE-SHEET. The following report and balance-sheet were then read ; The net profit at 31st March, after making very full allowance for all bad and doubtful dependencies, and towards reduction of Bank premises and furniture accounts, amounts to £58,058 4 10 To wlflch has to bo added Balance of undivided profit at 30th September, 1874 .. .. .. 13,916 0 3 Making a total available for division of £01,074 11 i The following appropriation of which is now recommended — To payment of dividend at the rate of 10% per annum .. £30,000 0 0 To bonus of ss. per share, equal to 5% per annum .. .. 15,000 0 0 To balance carried to profit and loss new account .. .. 10,974 11 1 The dividend and bonus will be payable at the Head Office, Auckland, to-morrow (Friday), the 30th April, and at the branches on receipt of advice. For the Board of Directors, James Williamson, Chairman. Aggregate balance sheet of the Bank of New Zear laud, at 31st March, 1875, including London Office to 31st December, 1874. Dr. £ s. d. Bank stock .. .. .. .. 000,000 0 0 Reserve fund .. .. .. .. 180,000 0 0 Notes in circulation 468,420 0 0 Bills payaele in circulation .. .. 1,450,308 0 6 Deposits and other liabilities .. 3,884,117 15 3 Balance of profit and loss at 30th September, 1874 .. .. .. ■ 13,916 C 3 Net profit for half-year .. .. 48,058 4 10 £6,644,880 6 10 Cr. £ s. d. Coin and cash balances .. .. 507,403 0 11 Bullion on hand and in transitu .. 250,004 12 10 Government securities .. .. 300,000 0 0 Landed property, bank premises, and furniture.. .. .. .. 102,020 1 3 Bills receivable and securities in London 1,477,029 8 0 Bills discounted and other debts due to the Bank 4,001,103 3 4 £0,644,880 6 10 PROFIT AND LOSS ACCOUNT. £ s. d. To dividend at the rate of 10 per cent. per annum .. .. .. .. 30,000 0 0 To bonus of ss. per share, equal to 5 per cent 15,000 0 0 To balance carried to Profit and Loss, ‘‘New Account” 10,974 11 1 £01,974 11 1 £ s. d. By balance of profit and loss at 30th September, 1874 .. . .. .. 13,910 0 3 By net profit for half-year, after writing off bad debts .. 48,058 4 10 £61,974 11 1 RESERVE FUND. £ S. d.' To balance 180,000 0 0 £IBO,OOO 0 0 £ s. d. By balance from last statement .. 180,000 0 0 £IBO,OOO • 0 0 Dignan, Audited | q UABi j. Taylor. Mr. Murdoch desired, with the permission of the Chairman, to call the attention of the shareholders to a slight alteration that had been made in the arrangement of the different items in the balance-sheet. In previous statements of account they had separated landed property from Bank premises and furniture—why, he could not say. The plan was adopted at first, and had always been continued; but it merely had the effect of enlarging the balance-sheet without any good reason. This year the items had been put together. The landed property, which hitherto had been a separate item, was simply the land on which the Bank premises stood, and therefore there was no necessity for its being kept separate. Then, with reference to the next two items, “ bills receivable and securities in London,” and “bills discounted and other debts due to the Bank”—hitherto these had been included under one heading, namely, “bills receivable, bill discounted, and other debts due to the Bank.” But for various reasons—among others the adverse comments which had appeared in a portion of the Press during the past half-year—it had been thought desirable to show as against bills payable in circulation, which they would sec on the other side of the account amounted to £1,450,308 os. od., that there were held bills receivable and securities in London £1,477,029 Bs. Cd. The latter item, therefore, had been deducted from the general item of “bills receivable, bills discounted, and other debts duo to the Bank,” and had been placed as a separate item in the balance-sheet. The Directors felt that it was a better division of the headings, and he hoped the shareholders would agree with them. The Crrairman said: Ip moving the adoption of the report and balance-sheet which have just been read, it devolves on mo to make a few remarks on matters connected with the business of the past halfyear. I need not comment on the report, which I am stue will commend itself to shareholders generally, and will only notice that one gratifying feature in it is hat, notwithstanding the initiation of a policy by other Banks, on which I will remark hereafter, which is calculated to interfere materially with banking profits, we are to meet you with the same dividend and bonus, and to add something to the balance to bo carried forward to the next half-year. In view of the possibility of the continuation of the competition now existing, the Directors consider it prudent to keep agood balance in hand, which may possibly be needed in the future to equalise dividends. The policy to which I have referred, and with which most of you are no doubt more or less acquainted, was the offer by the National Bank of New Zealand of rates for deposits much in excess of those previously current, which were, of course, adopted by the other Banks, and subsequently were increased by the Bank of Australasia. Previously, to this step being taken, the Banka acted in concert as to rates, but, on the pretext of forcing us to join in a general agreement in Australia, the Bank I have Inst named withdrew from, and consequently upset, the agreement in the colony. At the first sight it may appear as if their position was not unreasonable, but when I toll you that our business in Australia consists almost wholly of our own agency business and dealings in exchange, it will at once bo apparent to you that to join in the same agreement as the other Banks have for general business would practically be consenting to close our Australian branches. As there appeared ne prospect of a return to an agreement here, there was nothing for it but to carry the war into our adversary’s stronghold { but, before doing so, a renewed attempt was made to bring about an understanding, but without success. We therefore offered in Melbourne the same rates as were being publicly offered here by other Banks, and though this action Ims been severely and very unjustly commented on by some portion of the Australian Press, you may take our assurance that it is not working or likely to work to the disadvantage of this Bank. I need scarcely tell you that the offer of the present extreme rates for money is altogether foreign to the policy wo would desire to adopt, and I am sure subversive of the best interests of the colony; for though it gives depositors a present advantage, it withdraws money from the ordinary channels of business, and inevitably leads to correspondingly high rates for advances. This has not yet boon much felt, the competition between the Banks keeping down lending rates ; but the time will. come when the Banks will try to make up for tho pre- 1 .sent low scale of profits, and I hope tho commercial community will then remember that the pinch Ims not been caused by this Bank. The' figures • in tho balance-sheet require little comment from mo; they, prove satisfactorily that tho business of tho Bank is being well maintained, and before sitting down I will only add that, in consequence of the maintenance of high prices for wool 1 and a most abundant harvest, tho trade of the colony is in a very buoyant condition, : while tho late successful negotiation of a further loan by tho Colonial Treasurer gives assurance that his scheme of public.works will continue to bo vigorously prosecuted. Ihave pleasure in moving that the report and balance-sheet as read bo adopted. Dr. Campbell seconded tho motion. r Mr. F. L.' Prime said that, in recent letters in the Australian papers, on the subject of the high rates of interest offered by tho Bank, ho observed they were

accused of attempting to attract Australian capital to New Zealand. Might he ask if that were one of the objects in view? i Mr, Murdoch, in reply, said: I may say at once, that, in the recent action taken by the Bank in Australia, no such object as that alluded to by Mr. Prime in any way influenced the Directors. They were simply actuated by a desire to bring about, if possible, a better understanding between the Banks, by convincing them that, the Bank of New Zealand was in as good a position to make them pay for deposits in Australia as they were to make it pay here. (Hear, hear.) But as to the statement itself—that wo were attempting to attract Australian capital to New Zealand—l think wo might very reasonably retort the accusation, and say that the primary cause of the recent competition was a desire on the part of foreign Banks to attract a portion of the capital now at use in New Zealand to Australia; for the representative of one of tho foreign Banks, and one of those that took the first action in this competition, publicly stated that he had instructions to withdraw £200,000 of capital which he had at use in the colony, that ho could only do so by squeezing his customers, or by getting deposits, and that lie had determined to zealously carry out the latter policy. Now,'if we had allowed him to withdraw £200,000 of deposits from other Banks by tho offer of high rates, the other Banks would simply have been disabled from meeting the ordinary requirements of their customers, and the money so withdrawn would have gone to Melbourne to meet his Bank’s wants. This, I may say, is one of the inconveniences to which a colony is exposed in dealing with foreign institutions, one day expanding and another day contracting their business, not. perhaps, from any local cause, but simply in consequence of a liability or necessity that arises in another quarter. I think-New Zealand has previously experienced the inconvenience, and this is but a repetition. But the accusation is only one of many I have seen in print lately, since I was in Australia. Another charge was that we were squeezing our customers. Now, I fancy that shareholders and customers of the Bank are better judges of this than scribbling letter writers ; and I think wo may safely challenge any one to say that reasonable accommodation has been refused to any one deserving it in the colony. I feel quite sure it has not been so. I hope shareholders generally, if they see such reports repeated, will treat them with the contempt thej r deserve, and look upon them merely as so many weak Inventions of the enemy. (Hear, hear.) Mr. Cherry remarked, with respect to the agency in Sydney, that when the increase of capital was mooted there was a question raised as to whether the • Bank was going to enter into business in Sydney, and he then understood the reply to be that it was not. Ho would like to know whether the present institution in Sydney had undertaken general banking, or ■was simply an agency for the head office ? The Chairman replied that the branches in Australia had not gone into actual banking business. They were simply accessories of the Bank in New Zealand to enable it to do the business it required to transact in the colonies to the best advantage. Mr. Cherry accepted the answer as satisfactoiy. He might be permitted to add a word to what had fallen from the Inspector on the question of local Banks versus foreign ones. Having resided in the other colonics for some time, he was in a position to say that the same inconvenience and difficulty was experienced there some years ago. The colonists had to suffer pressure, and some of them were ruined virtually through the action of the Banks. At that time they were all English institutions, and there was not a colonial Bank of any position at all in Australia. The remedy being in their own hands, they availed themselves of it, and since the establishment of the Bank of New South Wales and the Bank of Victoria such pressure upon the colonists had been prevented. The fact of having tho chief Bank in the place managed by their own people, saved the inhabitants a great deal, lie was of opinion that New Zealand also ought to have similar institutions of its own. .

The Chairman expressed his satisfaction and concurrence with the remarks of the last speaker. He thought that the people of New Zealand at all events would know that the Bank of New Zealand had excited a similar influence iu the colony to that referred to as having operated in Australia. The necessity for such influence was not so great now as it was when New Zealand was not in so prosperous a condition. But he had seen it exercised, and had heard it remarked by many that the service done by the Bank to the Colony of New Zealand generally—both North and South —would not be forgotten. The motion for the adoption of the report and balance-sheet was then put and carried unanimously. Mr. Comisky proposed a vote of thanks to the directors and officers of the Bank, for the satisfactory manner in which they had conducted the business of the institution during the past half-year. Captain Casey seconded the proposition, which was carried unanimously. The Chairman, in returning thanks on behalf of tho Directors, said : I feel very much flattered at the expression of your continued confidence in the Directors of this Dank. I can assure you, on behalf of myself and brother Directors, that our object has been to promote the interests of the proprietary of this Bank, to make it a permanent institution of New Zealand, and one which will not only command the confidence of the people of this colony, but also of the mercantile world. So far I think our efforts have been successful, and it will not be for lack of exertion and care on the part of the Directors if that success does not continue and increase. I have much pleasure in congratulating the shareholders upon the recent acquisition to our London Board of a gentleman well known in the old country.and the colony. Our late Governor, Sir James Fergusson, has joined the Board ; and I think that from the position he occupied in the colony, and the knowledge he possesses of New Zealand, he will add to the standing of the institution. I again thank you, gentlemen, for your kind expression of satisfaction. Mr. Murdoch : Gentlemen, on behalf of the staff I have very much pleasure in acknowledging your vote of thanks, which I am sure will be a source of congratulation to the officers generally ; and I need scarcely assure you that no increased effort that is possible on our part to maintain the position of the Bank in the future will be wanting. This was all the business, and the meeting adjourned.