The New Zealand Times. SATURDAY, DECEMBER 4, 1926. BANK OF NEW ZEALAND

New Zealand Times, Volume LIII, Issue 12621, 4 December 1926, Page 4

The New Zealand Times. SATURDAY, DECEMBER 4, 1926. BANK OF NEW ZEALAND

Masterly is the right word to apply to the Bank of New Zealand chairman’s half-yearly report to the shareholders. This is the last half-yearly general meeting of the bank’s history. That proclaims that there is no longer any necessity for such meetings. It is the final proof of the bank’s complete recovery from the troubles of thirty-two years ago. Also is it the final of many justifications for the policy adopted towards the bank in the fateful year 1894. The mass of 3’early accounts is, of course, not put forward. But the announcement of the usual half-yearly dividend—on the same level as last year’s—shows that the bank’s prosperity is being maintained.

The brief review of the present prices of our produce is illuminating. It takes account of the effect of the great coal strike; it tells some dairy companies plainly that their policy of storing their produce for better prices is a senseless, unwarrantable, and disastrous gamble, and declares that their right policy is to “sell, and keep on selling” ; it finds the wool position fairly good, m spite of adverse circumstances; and it expresses, rightly we think, a hope that the end of the coal strike will be followed at once by a great revival of industry, favourable to a recovery of all our produce prices. In this connection it reveals the great strength of the German factor in the wool trade.

There are signs of a possible complete rehabilitation of the world’s trade. About that aspect of the situation the report left the facts to speak for themselves. But it warns the Dominion, whatever the trade recovery may be, not to expect a permanent continuance of high prices. This is sound,-for the rivalry against us from all round the big market is growing, and there are on the horizon of the tariff question certain difficulties. That these add to the difficulties of tariff is dear, and the report explains how it is so. Though the report is from shrewd hands, we can scarcely as yet go so far as to think that the fiscal policy of Great Britain must inevitably be changed, but we agree that great care must be taken in our Imperial trade policy. Moreover, the report throws light in cold figures on the trade balance disturbed by excessive importations. The necessity for a restoration of that balance is patent to all. The sketch of the new policy of long-dated advances on the security of lands, on the amortisation principle, is brief, but quite comprehensive. The bank is to be congratulated on being the first bank to try this policy. For many reasons: because it is entirely different from the policy of long-dated advances which proved some years ago so disastrous, and, moreover, is contrary to the first principles of good banking; because its working is, with the exception of a temporary advance against new capital, to be kept entirely separate from the ordinary banking business; because provision is made in case the experiment—for it is an experiment—succeeds for extension, and, in case of failure, for its prompt windup by the ordinary shareholders. The report speaks hopefully of success. In face of all the conditions, there is good right for the hope. The great question of “control,” the report treats with wise shrewdness. While giving the boards full credit for the best motives, it cannot hide its doubts in the capacity of untried men to control the vast interests committed to their hands. Its advice to reduce the danger from this source by reducing the number of both boards and board members, deserves serious consideration. A single board of five members—-two representative and two nominated by the Government, with a chairman—would certainly be more likely to know things, and, therefore, better to do them. If control were restricted to things outside the market, there could be little objection to the change. We congratulate Mr Watson on the rounding-off of his thirtytwo years’ capable service by his re-election to the directory. His long experience is a substantial asset of the bank.