NATIONAL BANK OF NEW ZEALAND.

Otago Witness, Issue 2894, 1 September 1909, Page 23

NATIONAL BANK OF NEW ZEALAND.

INCREASED CAPITAL FORE SHADOWED. i (Fboji Oub Own Corsespoxdeht.) \ LONDOk, July 9. ; Mr Robert Logan reminded the share* - holders a+ the general meeting ol tha ~ National Bank of New Zealand, on Tuesday, that he had prepared' them whf n they % last met for something in the nature of -f t a setback in. the prosperity of New Zea-^ % land, and his warning had been to a great" | extent justified. The dominant note of the 1 year had been the stringency of money, ~ } . mainly doie to the continued reduction vi ! value of the export surplus of tlie Dominion. How remarkable that reduction j had been would be seer from the fact that- - for the last four years, ended March 31, 3 the surplus exports had amounted — in 1905 . to £3,579,000, in 1906-7 to £4,718,000, in | 190TL-8 to £398,000 only, and last year j to £454,000. Those figures showed that, instead of having a comfortable margin to - provide for interest on loans and the like. . the Dominion exports had done little more than provide far the cost of goods im- j parted. \ It was inevitable in the circumstances t that there, should be a somewhat keen dt? r i anaud for money in the Dominion, and th*t | stXll existed ; but' it was satisfactory to | learn thai tJhe imports <were now being '.= restricted That could not fail before long 4 to have a very beneficial effect. -An adjustmeat of this kihti was, of course, a matter^ * of time/ There had, too, been consider-^ '" able speculation in land, notably suburbau ■< land, and he thought it probable that th* _ t standard of living had been going up > somewhat too rapidly in the- last few years. The natural result was that but for th« , revival in the price of wool, the value c-l j dairy produce, and the excellent agricul- ■* tural outlook, the condition of affairs in '4 New Zealand might Have given cause for J considerale anxiety. As it was, while it \ could not be said that the prospect was-* quite clear, there had been a steady im- , provement in the financial outlook, and "| with caution, to the necessity of which i the people were fully alive, they might look for an earHy return of the prosperity j which New Zealand had enjoyed for manjl" y&a-is past- It might have been expectedh that the bank's profits would have beeaj adversely affected, but, on the contrary, \ there had been an improvement, and the < present balance sheet was the most satis- j factory ever laid before, the shareholders. ■■ While • following a cautious policy, they bad not contracted their advances to any ■• material extent. The rates for advances in ; the Dominion had been higher than for „ some tome past, and if conditions had been uniformly prosperous, they might pos--i sibly have made an even larger profit, , Their interest charges were much less than^i last year, the cost of remittances had de-^ creased, and , ttey had -larger resources V owing- to the increase of their reserve^ fund. They proposed to transfer £25,000| to the reserve fund, which would therf« amount to £375,000.' The reserve fund' was commenced in 1896 with a modest* ; £20,000, and it had grown steadily until < it was now equal to- the increased capitals' With regard to the bonus of 3 per cent.,,' it-was- jnsfc possible this might not be re-; peated. At anyrate, he advised the shareholders not to count on it. : With regard to the proposed increase ol ' capital, there were reasons for and against : issuing it at once. It must came in time, ' acd it might possibly come very soon. The directors would not hesitate to go to> the shareholders for more as soon as they could see their way to employ it without running undue risks, and with a reasonable \ certainty of giving as good a return as at ' present. Mr A. M. Myers (Auckland) said he., thought the shareholders had every reason " to tts moie tLan satisfied with the result of the year's operations. — (" Hear, liear.")^ In the Dominion they were fully aware ot the anxious and trying time it had be-3» for all concerned. As to increase of capital, there could be little doubt that therw were plenty of openings for the investment*; of capital in New Zealand, and other,avenues for capital would have to be>. found, since some ol those which formerly; existed were not. now open. He quite' agreed that- the time for increasing the? capital should be left in the hands of the directors. Mr G. M. Kebbell (Wellington) remarked that when he attended a meetingof the bank in 1882, it was almost thought* they -would have to give it a funeral. Novc-they-possessed one o£ the brightest littlegems in the southern hemisphere. Twer* years ago he spoke in favour of increasing the capital. Since then he bad been in the Dominion, and he saw no reason to alter, his opinion. The balance sheet showed, that they Were in a very good position. That was not owing to the amount of their capital. He was afraid it had been. brought about by giving a stone when their customers asked for bread. That was the reason the position of the bank was so strung on paper. Personally, he wouldS rather see increased capital and a smaller H dividend. They ought to put the banlcfl into a position to continue its sphere offl usefulness for all time, and that could ■ be done by increasing the capital. He wag,H certain that the whole of the shares would ■ be taken up, and the money could be lefß out advantageously long before the calls-H were due. fl A dividend of 10 per cent, per annum^B free of income tax, was declared for the^H half-year ended March 31, and a bonus °4H ! 3 per. cent, for .tlj9 year. The fum o£H j £3000 was- carried to the officers' pensioifH ! f jnd, and £13,035 forward, ]■ Messrs W. P. Reeves, Thomas SeaberiH »and Lindsay Eric Smith were rc-etec£es^H directors, and the firm of Messrs Weltoi^H Jjn°s, and Co., auditors. It? proposing ' thanks to ihe ' generalH manager (Mr J. H. B. Coates) and staffs Mr Hanna said the period they had jussH passed through was one of the scveresfH depressions since the early nineties, anqH r fche result was extremely gratifying* ■