THE BANK OF NEW ZEALAND MEETING.

New Zealand Times, Volume XXXIV, Issue 5638, 25 April 1879, Page 4

THE BANK OF NEW ZEALAND MEETING.

(PER PRESS AGENCY.) Auckland, Thursday.

At the Bank of New Zealand meeting today the usual dividend and bonus of 15 per cent, was declared, and £25,000 was carried to the reserve fund, £9700 being carried forward. The report shows the coin and cash balance at the banks to be £1,700,000, of which £796,000 is held in the colony ; the balance is in London. The profit and loss account was as follows:—Profit at 31st March, after making very full appropriation for every bad or doubtful debt depending, £80,240 ; to which is added the balance of undivided profit on 30th September, 1878, £SSS, making a total available of £89,128 11s. Bd., whichitis recommended should be appropriated as follows :—To payment of dividend at the rate of 10 per cent, per annum, £35,360. Bonus, ss, per share, equal to 5 per cent, per annum, £18,125. Proposed in- rease to reserve fund, £25,000 ; balance carried to profit and loss new account, £9753.

In moving the adoption of the report, t)r. Campbell said: Gentlemen, —In submitting for your approval and adoption the report and balance-sheet which have just been read, permit me to make a few remarks upon them and on subjects in which you as shareholders are directly interested. It will be in your recollection that shortly before the date of our last half-yearly meeting the announcement had been made of the failure of the City of G.'f ogow Bank, and then followed a period of financial disturbance and distrust such as had not been experienced in England for many years, and from which there had been a very slow and gradual recovery. The disclosures in connection with this failure shook credit and confidence to their foundation, and it is only a natural result that all bank stocks became more or less prejudicially affected. When your directors at last meeting asked and obtained your authority to issue 27,500 new shares, the consequences of the City of Glasgow Bank failure had not been realised, and could it have been anticipated that the disaster would have been followed by such a calamitous period of depression, the issue would either have been very much restricted or altogether postponed. But the issue has been a decided success, notwithstanding the untoward state of things to which I have alluded, and which at last came home to ua here in an intensifi ed form. Contending against many adverse influences, it is a source of congratulation to record that of the 27,500 new shares only 3984 remain unallotted. Of these 956 consist of remainders not absorbed by the proportion in which the issue was made, and these will be put in the market at a good opportunity. Then there are 153 shares which are held on behalf of shareholders travelling and otherwise beyond reasonable distances, and to whom the directors accord yet a further period of grace. But it is worthy of remark that as compared with nearly every other Colonial Bank the depreciation in our shares in London was very light, and the local depreciation was sufficiently accounted for by the extent of the issue and the large proportion of shares held in the colonies and the prevailing scarcity of money, and besides these influences there were others which more or less affected the value of our shares, for reports were industriously circulated that this institution was a heavy loser by the City of Glasgow Bank. So contrary was this to facta that we have not lost one shilling by that bank’s failure, and when it stopped we only held £3OOO of its paper, half of which was covered by cash balances. We held and we had bills for collection in excess of the total amount involved. Reverting to figures in the balance-sheet, it will be noticed that notwithstanding the increase of our capital, it stands the same as in the last report, because the new capital, as you no doubt are aware, was only payable on the 31st March, the day on which our books closed for the half year. Had it been correct to show the increase as to capital in the present statement, there could only have been shown the amount paid in New Zealand, as the Australian and London branches had closed their books at a previous date. As payments from shareholders only became dividend-bearing from Ist April these could not be regarded as capital until that date, and have therefore in the statement before you been incorporated under the heading deposits and other liabilities. The deposits appear to have fallen to £420,000, but this is wholly due to the decrease of Government balances held by the bank, as there has been an actual increase of private deposits amounting to £168,000, irrespective of payments on account of capital. It will be observed that as compared with last balance-sheet there is a very material increase in eoin and cash balances, the directors having considered it prudent to hold larger reserves during the disturbed state of the money market, to which I have alluded, in the early part of the half-year. We therefore fortified our London account, allowing colonial balances to run low ; but at 31st March we had made up our colonial holding of coin to £769,000, and a balance was held in London. The amount of the Bank’s advances decreased in proportion to the diminution of deposits. The amount of profit brought to account for the half-year is slightly less than last halt - year ; but I may remark that in view of the existing and prospective condition of business in this and adjoining colonies it has been considered advisable to make more than usual provision for bad and doubtful debts, and should such provision prove overestimated there will be an early return of the surplus to profit and loss. Shareholders will no doubt approve the intention of the board to continue increasing the reserve fund, the directors considering the augmentation of this fund as of more importance than the payment of increased dividends. It will no doubt interest yon to know that the late mischievous competition among the banka for deposits has ceased, an understanding as to rates having recently been arrived at, and it may be hoped that the experience of the past may prevent a recurrence of a course of procedure which must be regarded as alike impolitic on the part of the banks, as it was subversive of the best interests of the colony. The scarcity of money now prevailing throughout all the colonies must be well known to you all. Various causes have arisen to introduce this—notably, over-speculation in land, over-impor-tation, losses in stock, from the severity of last winter and subsequent floods ; short crops, from protracted drought in summer; and chiefly the great fall in value of our staple produce. The financial pinch has no doubt proved severe, but it may be hoped that, luce other disagreeable corrective remedies, e after effects may prove more salutary, an more than compensate for the presen inconvenience. It is to be regretted that a more cheerful picture of P , aspect of business in the co *O n y drawn; but do not suppose that I take any

gloomy view of the future. A repetition of such a combination of adverse influences as I have recounted heed not be apprehended ; on the contrary, there are manifest signs of progress in many directions, for population and settlement are rapidly increasing, and the resources of the colony are steadily and securely developing. Let us have a moderately good season, with that recovery in the value of our products which may reasonably he expected; let the Government exercise a judicious and careful foresight in prosecuting the Public Works policy, which has achieved an unprecedented advancement in our material wealth by the development of our agriculture and pastoral resources, and the colony with that vitality and recuperative power which has ever distinguished it, will soon recover from the existing depression, and taking to heart the salutary experiences wo have just passed through, there is no reason why our prosperity iu tho future should not be as greqt as it has been in the past. With these remarks I beg to move the adoption of the report and balance-sheet as read. The motion for the adoption of tho report was carried ncm. con.

Colonel W. Fraser moved a vote of thanks to the directors and officers.

Captain Daldy seconded. The Chairman acknowledged, and Mr. L. Murdoch, general manager, also acknowledged tho vote,