UNION BANK OF AUSTRALIA.

Oamaru Mail, Volume IV, Issue 1216, 10 March 1880, Page 2

UNION BANK OF AUSTRALIA.

(From the Morning Post, Jan. 13.)

The special or half?yearly, meeting of the* shareholders in the Union Bank of Australia was held yesterday afternoon in the boardroom at the offices. Bank-buildings, Lothbury—under the presidency of Mr. William. Fanning.

Mr. W. R. Mewburn, the Manager, roadl the 'supplementary report and accounts,, which \Vere as follows : . • . " The Directors have the pleasure to report that the accounts of the Bank, after amply providing for all bad and doubtful debts, are again sufficiently favorable to admit of the declaration of a dividend of seven per cent, for. the half-year and of a bonus of Sapor share; being together at the rate of 16 per cent, per annum. The 500 now shares which remained, unallotted out of the last isßue having been disposed of, the Bank's "paid up capital of L 1.500,000 is now,completed. The premium of L 33 each on these 500 shares, viz., L 16,500, has been added .to/the reserve funds, bringing the total of thoseffunds toL 516,000. Intelligence from: the .Colonies is. of a cheering character, the season being reported as generally very favorable alike for the pastoral and agricultural interests, whilst thu marked rise that has recently taken place* in the Home markets in wool, corn, copper, and other produce cannot fail to'have a very beneficial effect in the Colonies. The Directors have pleasure in stating that the General Manager, the Managers of and other principal officers, as well as the staff generally, both at Home and abrd&d, have given them satisfaction, and they tender their best thanks for their zealous services. The annexed balance-sheet presents a hetTamount of profit of L 123.039 10s 9d available for division. Of this the dividend and bonus will absorb LI 20,000, and leave L 3039 10s 9d to be carried forward. The dividend warrants will be transmitted by post on Jan. 19, and the dividend and bonus will be payable in the Colonies at such time as the General Manager shall fix after receipt of telegram. The proprietors, have already been informed by circulars from the Board of Nov. 21 and Dec. 23 of the resolutions now submitted for their consideration. The first of these is to> effect a change in Clause 2 of • the deed of settlement, which, as it was framed in tha year 1837, no longer expresses correctly the: localities in which the Bank's business is now, or may be at some future time, carried on. The object of the second resolution is to amend Clause 100 of the deed of settlement, by omitting that portion which provides thafc a Director, before election, shall have held his qualification in shares for not less than six months. As this is an inconvenient provision, the Directors recommend that, in tho interests of the Bank, it be removed. Tho third resolution contains the assent of tho proprietors to the registration of tho Bank aa a limited company under the Companies. Acts, 1862 to 1879, and to the increase of tho nominal capital to L 4,500,000. Should this, resolution be adopted, the capital and reserves of the Bank will be as follows : Capital, L 4,,500,000, in «0,0001 shares of L 75 consisting of L 25 per share paid, LI, 500,000 ; and LSO share reserve liability,, under section 5 of the Companies Act of 1879» L 3,000,000. Total capital, L 4,500,000, reserve funds, L516,50u j total, L 5.316.500. The Directors recommend these several resolutions to the adoption of the proprietors." The following is a statement of liabilities and assets at the branches on June 30, and at the London office on Dec. 31, 1879 : LIABILITIES. Capital .. ..... .. ..£1,500,000 0 0 Reserve funds— Amount as at June 30,1879 .. ..£BOO,OOO 0 0 Premium' of £33 per share on 500 now shares .. .. 10,500 0 0 Circulation 318,500 0 0 Deposits .. 0,605,080 8 0! Bills payable and other liabilities, including reserves held ajrainst doubtful debts 1,388,500 1$ 8! Balance of undivided profits .. .. 123,08 ft HQ ft , £10,742,232 12; 2 ■ . . ASSETS. Specie on hand and cash balances .. 1,231,818! ft 1 Bullion on hand and in transitu .. 72,103. ltt 8 Money at call and short notice in London 318,000 0 O Government securities.. .. .. 530,441) 11 2 Bills reeeivaele, loans, and other securities at London offtco .. .. 1,309,471 11 4 Bills discounted, bills receivable, loans, and other securities at tho blanches 7,008,044 7 11 Bank premises and property.. .. 206,360 0 (J £10,742,233 12: a STATEMENT OP PROFITS, Balance of undivided profits at Juno 30, 1879 .. 127,031 14 2 Out of which a dividend awl bonus were declared of .... .. 110,000 0 0 Loavius; a balance of .. .. £8,031 14 2 Profits of the past half-year, after making provision for all bad and doubtful debts £183,49t 18 0 Less— Remuneration to . . the local directors, and salaries and allowances, to the Colonial staff,. ..£43,384 18 3 General expenses in tho Colonies, including rent, 'taxes, stationery, &c. ..14,514 (J 5 Remuneration to th<s board of directors, salaries of london office staff, rent, taxes, stationery and general »X-------peiit.es .. 8,539 7 7 Income tax .. 2,048 9 2 _J 69.057 1 5 U ' i(fr 10 7 Balance of undividod profits at this ...,.,, date .. ... f. .. .... £123,030 10 fl STATEMENT OF RESERVE j USDS. New Zealand Imperial 4 per cent, d 0... ... bentures ■■-..- ■..••• .. •• £200,000 0 0 Canada Imperial 4 per cent. d.eben- : t ; tures 'j; .... .. .. 150,000 0 0 Colonial Government douontvros .. 150,000 0 0 " l " £500,000 0 0 Bank promises and . ,• J property .-. .. £200,350 0 0 ' Balanco of reservo funds not specifi- , ■ ■■ ~.-.•'■ <'''!' •■:^iiy ; :• / 50.150 o o. 316E00 0 p Total rosevvo funds ..' '.'.' £810,600 0 0 London, Jan. 7,1880. ~;',, , • , „ ,„„„ ' n; J. Ashton, Chairman oI;CommHtoo. W. R. MKwmnwT, Manager.' . ; ; - , R JJucKiiKaJiycountant. !r TJie;'Chaiymw» said—Gentlemen, I believe that it is unnecessary X:shouldidetoinyo« long on what Ijmay call ,the; usual; busmosa ' of the meeting, and tho more so that your

attention is drawn to questions of unusual importance, and upon which yon yourselves will probably desire to raise some discussion. Now, if I am unable on this occasion to dwell on those great strides in Colonial progress ■with comments on which yon have at times been interested by gentlemen occupying this chair, I may fearlessly assert throughout n time of great depression, even to its approaching end, the Colonies have vindicated their claim to rest on a basis sound ami reliable as any that has been assumed h>'*«£"" lust friends. (Cheers.) to remark that this stability implies our o«n perfect security. I have said approaching end, because, though the active causes of Se difficulties I anTabout to allude to maj have passed away, their consequents maj for sonic time to come continue tc.affectthe character of our reports to you. You doubtnrus T Colonies last. (Hear, SeT T?e<W» of our past difficulties STI take it to be, found in {he cloud ot depression which Luropc, suffered from It was t£~ ;« reaching our Colonies, but at; length HT ft w«%gravated by the lamentable Scotch occurrence of the autumn of ISiS «Tf reached its lowest point durmg the great drouzht of which yon have heard so much i rfear heahi I question, however, if anyhas not been a resident in the odour dnrinsr one of thes vicisiturfcs can SSyreS their terrors. They first afflict the pastoral and agricultural interests, but, lonsr continued, asof late,the mischief spreads into every channel through which the general business of the Colonics flows, and the result it that an urgent request, not merely for forbearance but for additional assistance, n heard itt every bank parlor under circumstances not calculated to inspire confidence Such, gentlemen, were the conditions—haotrify the unusual conditions-undcr which our business was for some time conducted, and I refer to them without hesitation, because, overcome, they justify the confidence I have just professed In Colonial ■tabilrtr, and because I thus draw your attention to the arduous position of late occupied by our general manager and by the nwnscers of our branches. (Hear hear) Ifc redounds greatly to their credit that, though losses were inevitable, they were so mncfi within the amount we might have anticipated, as also does the fact that we Bjldom hear of complaints by our constituents that they foiled to receive in their difficulties the consideration they reasonably expected. But raider the circumstances alluded to we have felt it ad«isable to restrict business. I have already admitted that losses have been incurred, but as we still declare for distribution a dividend and bonus similar to that of the past half year and this after writing off every bad debt and providing liberally for all that is doubtful, I feel justified rn look.ng for the expression of your satisfaction with the result submitted. (Cheers). Thus much for the past. The future is of far brighter omen. Not only do we expect a fine clip of wool everywhere, but the improved condition of commerce here and elsewhere bids us to anticipate for it a greatly increased value. (Hear, hear.) A rise of 2d per pound on the low average of 1579 means two millions sterling additional in the pockets of the stockowners. (Hear, hear.) In the wheatproducing Colonies an abnndant harvest is all but a*rared, South Anstrafia alone showingan estimated surplus of 250,000 to 300.00:; eons In mining matters, recent advices show a revival of spirit, and the more settled industries, includm* the sugar planters, are progressive. Mercantile affairs generally are reflecting the improvement which we are here experiencing, and if the colonists can only arrive at a process—the question is receiving much attention—by which they shall Sad, as America has done, a market for their surplus stock in any shape, they are far from having reached the limits of their immediate progress. In this progress we shall share, but oar course will not be less disputed in the future than it has been in the past. The late increased demand for money on the part of the landed and pastoral interest has attracted attention, and led to the just conclusion that it is insufficiently met. Inope department of onr business we may look for increased competition. We do not regret it, f }T though advances on the lands of a conntry are made on the best security, and though the making of such advances wa3 one of the objects of the Bank when founded, it is obvious that times may arise, as of late, when the amount employed might prove inconveniently large, and not so convertible a3 the ordinary business of a Bank requires. (Hear, hear.) That the profits of the Bank in this view promise an early increase it were idle to assume : to what extent they may fall off—if B t ail remains to he seen. Of the result lam | not apprehensive. I doubt not that we shall he able to make yon such a retnrn as should satisfy yon. (Hear, hear.) I think, however, that we shall wisely keep before us the points I have referred to. (Cheers.) A3 regards onr balance-sheet, I would ask you to recall the words which fell from our Chairman at our last meeting. Mr. Hill then divided into component parts some of the larger items on either side of the account (the greater part require no distribution), andadded that when the Company was registered as a limited liability company those items should he given more in detail. This statement was welcomed by you, and we have therefore decided to anticipate, art event so close at hand, and we submit the accounts in the form which they will in future assume. (Cheers ) There is tittle calling for remark in the buiiince-sheet except the diminution of depewits, which is caused by the withdrawal of a tiovemment account, of which the Board were informed at the former meeting, and therefore could be no surprise. Now, gentlemen, we will turn to the considerstion_ of the three resolutions which I shall submit presently, but which at this stage of our proceedings I need not read, as they are already ia your hands, being fully set forth in our ittireular notice of December 23 last. I will th«n say the little I have to advance on each At them as they occur on the circular referred to. I will ask you to defer your own remarks until you have heard me to the end, when I will do my best to reply to yort in, I trust, a satisfactory manner. The first resolution seyks to alter the second clause of the deed of settlement,. It is not that we desire to obtain power to vary in any way the character of our business, bnt to widen the area of onr operations, if at any time it be considered advisable so to do. This power,! need hardly say, will be exercised with the gwatest caution. (Hear, hear.) It will Pu readily intelligible to you that conditions which satisfied the state of in the year 1827 require some modification to-day, and as we are about to alter in one important particular the deed of settlement, we may as well avail ourselves of the opportunity, and make such other changes as are required to meet the rapidly extending settlement of places adjacent to Australia, which must, when settled,of necessity look to

itas the centre from which their requirements [ njtmt be supplied. (Hear, hear.) It on will be good enough to understand that -we bare no intention of amy wide extension of our. •perationa, but overtures have been made to <JB of the soundness of which, if satisfied, we might be required in the interest of the Bank to iujt promptly, BhonM it so happen, onr action would be laid before yon at onr first half-yearly meeting thereafter. (Hear, hear.} Tha second resolution which I shall submit proposes the amendment of the 100 th clause of the deed of settlement, and I shall ask you so to- vary ifcia to give the Board of Directors when needing a colleague, power to nominate any gantletflan whose qualifications for the office shall Mem to them recommendatory, without waHing for the expiry of the sis months durraig which it is now required that he must have held his share qualification prior to nomination*. If not otherwise qualified this six months' tenure of the shares cannot Bapply what may be wanting, and the 100 th clause as it stands simply throws in the Board's way an unnecessary impediment. (Hear, hear.) I urge upon you most strongly the most favorable consideration of this.point. "Without the power Bought in the event of any tirst-claaa gentleman striving from the Colonies—agentleman, for instance, at the head of a well-established house, a man of fortune, with large experiencp, and standing high in public estimation in the Colonies, we might with great mjory to the Bank's interests be unafele to secure his set-vice*, and this because we would matntam a whoihr useless provision so far as the security ol,tha Bonk:» concerned. (Cheers.) we come to the last and mast important point with which J hare to trouble you. I do not think it necessary that I should dwell op the expediency ol registration under "Tail: Companies Act; 1879"as for a considerable period we have all been it i» moat expedient. For acme

time after our last meeting certain difficulties seemed to interpose, but we are now advised by eminent counsel that there is no hindrance to onr carrying out your and our own views. (Cheers.) The question for our consideration seems to be, do we propose a reserve liability which is sufficient; or is it too large ? We believe it is sufficient; indeed, so far as my own convictions go, I might say I think it is large; bnt it is the public whom we have to satisfy, not ourselves —(bear, hear) the public, whose confidence we now, as an unlimited Bank, eminently enjoy. Our deposits testify to the fact, and bills drawn under the Bank's credits are negotiable throughout all Eastern markets, wherea very important part of the Colonial business lies, on terms inferior to none—l do not care by whom the credit is issued—and our acceptances are regarded here, as elsewhere, as of the finest class. (Hear, hear.) We mnst maintain this most desirable position, even though we appear to bid high for it. (Cheers.) We shall get rid of a risk, which, owing to late deplorable events, is often, I believe, greatly exaggerated, and the limit of liability attaching to us individually should disaster come, will be much diminished by the responsibility of the class of shareholders whom it is already evident we shall attract. I have taken much trouble to estimate the relative positions which, we and all other Banks at Home and in the Colonies will occupy after we have registered, and, though fearing- a comparison with none, the question is,-hoiv shall we stand in contrast with our foremost colonial competitors ': They are established, either by royal charter or by Acts of the Colonial Legislature. Their limit of liability, so far as I know, supposing all shares—theirs and ours—stand at par, is as much again as the par value. In our case it will be twice as much, and our position in regard to the proportions which our capital and reserves will bear to all our liabilities both to the public and ourselves, will he such as will pear a favorable contrast with that of our principal rivals, if the comparison be thought advisable by any one. Here are the figures on which I base my assertion; they are too voluminous to trouble you with, but they are open to the inspection of any shareholder. There is a vast difference hetwecn the liability propo-ed and that which we now lie under, though both one and the other are to my mind of the most remote contingency. You will not forget that no part of the reserved liabilities can be called up unless the Bank be in liquidation, and that between us and Jthis event, if you consider it, I had almost said, possible, there stands as a buffer a goodly sum of our reserve funds, L 516,500. Gentlemen, I think we are justified in urging you to adopt the resolution I am contemplating with the same feeling 3 of confidence and safety with which your Directors regard it. I will therefore conclnde by moving the first resolution. Mr. Balfour seconded the motion, which was adopted in its entirety. The two other resolutions, empowering the Board to elect a gentleman on the directorate who might not have held his shares six months previously, and to register the Bank undc the Limited Liability Act, were agreed to. The Chairman then moved the adoption of the report and accounts as a whole. Mr. William Botly seconded the motion, which wa3 agreed to unanimously amid appla