BANK OF NEW ZEALAND.

Stratford Evening Post, Volume XXXVII, Issue 92, 18 December 1913, Page 8

BANK OF NEW ZEALAND.

j ! gratifying. Owing to the stringency [ i during the whole or the wo I have effected no loan Holauons in t | London for any Local Bodies during | the period. The market has latterly I ! hoc'ii in a most pessimistic mood, and j those Corporations whose finances I would not-admit of postponement of I their applications have had to sfibnid I to onerous, terms in order to raise i the funds they required, The general investing public appear to tie shy of j oversea securities* as the greater part 1 of Colonial Municipal and other loans floated during the half-year has had , 1 to be taken up by tire underwriters? 'I who at one time became so heavily j loaded with stocks that they had to I call a halt and absolutely decline to Consider any further issues until they had been able to dispose of a reason- , able proportion of their burdens. With conditions as they stand to-day, I am bound to recommend Xew Zealand Local Bodies, having loan issues in prospect, to postpone any action In the meantime, and to avoid making any commitments' for outlay. The Xew Zealand Government placed a redemption loan of £3,500,000 at 4 per cent, in October last, in the shape of. 10 years debentures convertible into inscribed Stock at £lOl. The issue price was £9B 10s. In this connection it is interesting to note the terms on which other recent Colonial Government loans have been Heated I Xew South Wales, £3,000,000 at 4 per cent in March, 1913, £9B (issueprice); £1,500,000 at 4 per cent, in August, 1913, Victoria, £2,000,000 at 4 per cent in September, 1913, £9B._ Canada, £3,000,000 at 4 per cent, in September, 1913, £9B. West Australia £1,000,000 at 4 per cent, in Xovemher, 1913, £97. Canada, j £4,000,000 at I per cent, in December, | 1913, £97. | It will be seen that the Xew Zealand Government was able to obtain for its loan the highest price of the year. All things considered, therefore, the Government of this Dominion may well ho congratulated on the success of the operation. Turning now to the more local aspect of the matter and the money supply on this side of the world, we find that Australia is anticipating a good season, and rates for money ave said to bo weakening there somewhat, lenders being prepared to advance on mortgage at fully one-half per cent, less than they were demanding a few months ago. In Xew Zealand the season, owing to the excellent winter, promises to bo perhaps the most bou itiful ever experienced, and as prices are, on the whole, good, the net yield should be most satisfactory. In point of fact, I anticipate that at the end of the current produce season, covering a period of twelve months, our total exports will approximate £25,000,000. Both in Australia and New Zealand, however, monetary ease resulting from the excess of exports is * not likely to be experienced to- any great extent,, because, though exports Have largely increased, imports have increased in even greater ratio. I l 'or permanent relief, therefore, we can look only to the. Central Market of the world, .amTuntil London money, becomes definitely cheaper, there seems small prospect of muck epse ,in the Dominion. * . 1 ■ TTIE LABOR TROUBLE.—In the midst of so much,that was favorable in the circumstances of the people of this country—a bountiful season with :i large prospective export of wool, butter, cheese, mutton and other products; with good prices ruling in the markets of the world; with abundance of work for our people at a hig.i average of wages fixed, by agreements made.under the authority, of our Courts —we were .sudodnly.-confronted las; October with a strike, at first a small affair, but .quickly turned by mischievoijs agitators into the most serious industrial upheaval that the country has ever experienced. What the trouble is all about, most people have a difficulty in explaining precisely. It is not wages, for that at one time fruitful cause of dispute is not menioned; it is not hours of labor, for no one has complained. The real question at issue appears to be whether the Federation of Labor shall be recognised as the controlling authority in Labor questions. The employers say Xo! because the Federation has declared itself as inimical to existing social conditions and a disregarder of industrial agreements and obligations. The employers claim that they should he expected to treat only with Labor Unions so constituted as to provide a means whereby the equitable settlement of ally disputes that may arise shall ho assured. For this purpose they claim that the Unions must register themselves under the Industrial Conciliation and Arbitration Act, which provides the necessary tribunal for hearing and adjudicating upon Indus-* trial disputes. This certainly seem;; a reasonable attitude to take up in the interests of all concerned; hut it does not suit the Federation of Labor, which aspires to being itself the solo arbiter of such questions. And so the strikers, who are under the domination of the. Executive of the Federation, remain on strike, and presumably will continue so until they throw off the yoke of the Federation. In the meantime, the only certain things are that the whole trade of tlm community has been disorganised and upset, and that a systematic attempt has been made to absolutely destroy means of communication with the outside world. Xo regard appears to he paid to the enormous loss of wages to the workmen, who, themselves, seem to forget that men who earn their Jiving by work paid by the hour can never overtake the" hours lost, that it is ins'; so much absolutely cut out of their i lives. A merchant whose hotness the strike throws out of gear does not suffer in a similar degree because, generally speaking, he is able to sell tomorrow the goods which the stiike i has prevented him selling to-day; hut j not so the workman, whose time is his capital, for with the waste of one goes I the loss of the other. It is indeed a j strange thing that the workman ean|l n ot see that in movements of this I kind he must, on every occasion, he 81 the greatest loser, and indeed the |i most extraordinary us well as the I) most certain conclusions to he drawn |‘ from the circumstances of this sensef I loss strike arc. first, the astounding I ignorance of the workman of the ecot| nomii' milnro of his own valuable |( capital, viz., his labour; and. socom'[',l\. his equally astounding credulity in f I listening, ohliviohs o! the most oleum.; Ej h’ssons of his lile, to (he wicked and r stupid representations of iinscrupnlon ; ; (]oma <r ogu**s who, in order that the-. . ! iniiv he spared tile necessity of doing i Sl iiv honest work themselves, spong • ' upon him for the means of leading an I idle life, while they- poison his mind 1 with their absurd, impracticable and i revolutionary theories, i it has been an encouraging feature | of the struggle that the call oj the j Federation’s Executive for a general strike was not uniformly responded to

by the Labor Unions. This shows that a large proportion of the workers oi the Dominj.dii ar not in sympathy with the aims of the Federation, and are not disposed, at the bidding of revolutionary Socialists, to voluntarily involve themselves and their families in needless sacrifices, and their country in serious losses. 1 believe, if the Labor Unions Wei'e t<l make it a fixed

and invariable rule that ho strike slidiihi ever be called until a secret ballot of the Union of Unions affected had been taken and had resulted in approval of a strike by a majority of at (east one-fifth of the votes polled, strike troubles would not loom as large as they at pre A nt do' in the industrial landscape. It will be within your .recollection that the secret ballot of the General Laborers’ Union resulted in a vote of 3 to 1 liJaldst striking at the call of the Federation of Labor. As the strike developed, there naturally occurred a certain

amount of disorder, at one time presenting a threatening appearance. But the strike leaders very evidently nmloreStimJifbd the resources (>? Society for its self-|3feserVatidn; and they entirely overlooked the fact that it was not in the least likely that the producers of more than nine-tenths of the exportable produce of the country, were going to sit idly by triple thenproperty was being held up or destroyed at the bidding of a small knot of irresponsible persons styling themselves the Executive of the Federation of Labor.

Shareholders beyond XeW Zealand may be interested to know that, shortly after the declaration of the strike, new Unions of Waterside Workers wore formed and registered under “The .Arbitration and Conciliation Act,” and these Unions, largely composed of country hands, and known as the Arhitrationists, have been able to successfully cope with the loading and discharging of produce and merchandise at the various ports throughout the Dominion. The farmer has' indeed proved himself to he not only the backbone of the country (as has long been recognised), but also the coirn" try’s guardian and protector. If the present attitude of the leaders of the Federation of Labor is to he taken as an indication of Labor’s attitude generally, it evidences a design to disintegrate the existing social order; and in that ease the salvation of the State, as well as its prosperity, would seem to lie in the multiplication of the yeoman proprietary to the utmost extent possible. Thus the strike developments have furnished a fresh argument in favor of the encouragement of land settlement and the subdivision of our large estates. The Government are to be complimented on the firm way in which they have dealt with the disturbance and are now bringing trt justice offenders against law and order ana others charged with incitement to crime,. Conduct of the kind must, of course, in the interest of Society, be rigidly repressed and severely punished. | The thanks of the community are due to all the Special Constables Who, at considerable inconvenience and buddy risk to 'themselves, placed at the disposal of the authorities,: They pre also deserving cf praise for the admiri!hie : selfhmntfoi ’they displayed imtheDfAce of occasional extreme ; provoeaftoir frofni the la wjlpss.lolqijient among I 'thy mob. Before passing from the subject, I feel.that it devolves upon me, as representing an important section of the financial interests of the country —interests which really concern the honest, well-doing worker as much as the employers—to stress most empha-. tjcally the exceeding' Jolly of the resort jto.,,strike methods with ; life 1 o’bjepf oijflighting afp-idhg—leal or improfitKpp'nntft' resdlt from the .precipitation of Joss. The' waste involved an a strike 1 is sirnply deplorable, ayd. the setback Kfhich industry sustains is almost' incalculable. And to crown all, the strike usually fails to achieve the end for which it was planned. Therefore, when considered calmly and dispassionately, resort to the .strike can only be regarded as little short of insanity on the part of the workers. As showing the enormous loss that may be entailed by strike action, some interesting statistics are given in “The Economist” newspaper of 27th September and 4th October. It appears that in the year 1900 there were in England 048 industrial disputes, affecting 188,500 workers and involving a loss of 3,150,000 working days. In 1911 and 1912 there were 1721 strikes and lockouts, affecting 2,400,000 workers and involving * a loss of 50,600,000 working days. Other countries have suffered similarly; but 1 have only available the details relating to France, where, during 1912, there wore no less than 1116 strikes, affecting 267,000 workers, with a loss of 2,318,000 working days; an iuv provement, however, on the previous year, when the loss through strikes was equivalent to 4,096,000 working days. These are significant figures. They slioav that these struggles are imperilling national prosperity, and indicate that, if allowed to go on unchecked, they will almost certainly lead,to national disaster. Every true patriot must feel that they emphasise the urgent need for careful consitleraion of the difficult problems involved, with the object of discovering a satisfactory solution. STAFF.—In the course of the discussion which .took place in Parliament when the Bank’s Bill was under debate, reference was made by some of the speakers to the pay of our Staff, which is apparently considered inadequate. In view of ibis. 1 have had some comparisons made between the position in 19(H) and 1913. and 1 quote them below for vonr information;— In 1960 in 1913 No. officers employed 553 957 Average salary paid £l7l 11s £195 2s H. Provident f’ds £148,163 £293,717 Max. pension payable £350 £SOO Min. pension payable £IOO £l5O Bank’s subsidy nil £10,522 Staff’s contribution £2610 £4965 During the period under review, i.e., from 1960 to 1913 (both inclusive), tin- Board has contributed to the Provident Fund an aggregate of £71,732. whilst the concurrent contributions of the Staff themselves have amounted to £49,396. In addition to the improvement which the above figures evidence, the Bank lias paid a steady annual bonus commencing Avith, and including, tin' year 1901. The rate of the bonus lias been 5 per cent, of salaries, except in I.9l.l—the Bank’s Jubilee vear—Avhen 10 per cent, was paid; fhe actual amount of bonuses distributed year by year lias been as Billows £ Vear ended 31st March, 1901 5,531 1905 5,793 ’’ 1906 6,146 ,! !! 1907 6,717 1908 7,077 ’’ ’’ 1909 7,280 1910 7,485 ;; „ „ 1912 8,415 £69,938

No bonus was paid as at 31st March last, the Staff having been informed on the occasion of the fast distribution in 1912 that it would probably be discontinued and that the Board Avould, in all likelibwd, prefer to make more liberal increases ul the salaries of deserving officers, rather than pay a bonus in which deserving and undeserving share equally. The current year is the first on Avhich the bonus has been missed, but 1 may mention on the other hand that the salary increases granted as at 31fct March, 1912, \v<’i-e unusually liberal. Some two years ago, a scheme for improving the position of the Junior Staff Avas for-

mulated, and adopted, by the Board. Under this scheme, youths, entering the Balifik service at say 17 years ol age, after completing their six months’ probation, commence at a salary of £6O per annum, and rise by yearly increases' until,- in their seventh year if service, they receive remuneration at tfie rate of £l5O peT annum, There■,.fter, further steady annual ilicr'ca-cs, f merited, are granted. The Bank has also established a fund for the pension if its aged messengers, and is gradually endoAviiig another fund, which Avill eventually he available for the relief af specially necessitous Cases, From die foregoing', ii will.lie seen that the position of the Bank’s employees is an improving one: that the Board is not unmindful of the interests of its deserving servants, and that the advantages offering in the Bank’s employ should attract to its service men of a satisfactory ami efficient class.

BOARD OF DIRECTORS—We now come to the actual .business of the meeting, tiie first of which is the election of a representative on tile Board. Mr Martin Kennedy is the retiring Director on this occasion, and, being eligible, has offered himself for reelection. As there is no other candidate for the appointment, I have much pleasure in him duly elected.

INTERIM DIVIDEND—The next business is the interim dividend. The profits for the half-year ended 30th September last, ivliile someivliat below those of the corresponding half of 1912, are still very ample, and avo have every reason to expect that those for the current half-year av i 11 prove satisfactory. The Board has therefore decided upon making the customary distribution. A dividend at the rate of 6 per cent, is declared accordingly, and will be payable in Wellington to-morroAV, 19th inst., and at Branches on receipt of advice. I do not think there is anything more calling for remark by me, and, as Christmas is at hand, 1 will conclude ;»y Avishing you all the Compliments of. the Season.

AIR MARTIN KENNEDY’S SPEECH.

Mr Martin Kennedy saidl rise to express my grateful thanks to Sharenolders for the honor they hare done no again re-electing me' unopposed as one of their two representatives on the Board of the Bank for the ensuing’ two years. If, after my nineteen years if service in that capacity, any incentive were wanting to lead me to use my best i efforts > m your behalf, this renewal of your confidence would supply it. But; (gentlemen, no incentive is needed, and I can unreservedly say ttiat, as a Director, 1 have at all times done ray best in the interests of the Bank as di whole, and 1 need hardly assure you that you may rely upon my continuing to do so, as long as you do me the honor of electing me to be one of your representatives on the Bank’s Board. As the Chairman has informed VOiii, the legislation wjiich he mention'd was in prospect at the Annual General Meeting ;m dune last, and winch jiused some keen feeling amongst us, uvs since become law, and, although •littering from him in regard to some f the provisions of the Act, you will, t am sure, 1 join with me in ottering am our congratulations on the fact hat the Bill was passed into law in a uiape practically almost the same as mat in which it had been drafted in :erms of his proposals. The Share.ciders’ interests at stake in the pro>osed legislation were recognised by ~ny colleague, Mr Watson, and myself as being so vital that wo deemed it orudent to invite the co-operation and assistance of the local Shareholders. Accordingly, at a duly convened Specal General Meeting a Committee of Ilia reholders, consisting of fifteen nembers, was appointed to co-operate ,-ith us. This Committee rendered

alviable aid and advice in the negoiations, and we were fortunate in laving as one of its members, C. P. jkerrett, Esq., K.C., whose assistance .as of very great service to us. The esult was a compromise between the Uiareholders’ Committee and the loan! of the Bank, which compromise ras adopted by the Honorable Mr Alan, Minister of Finance, who had barge of the Bill before Parliament, he compromise consisted in the fol)wing mutual concessions being made ■etween the Shareholders and the Goernment;— Your representatives agreed:— (1) That the Government would be ntitled to take up one-third of the ,3,000,000 new Capital of the Bank, ho other two-thirds going to holders f the Ordinary shares, the terms of .sue as to price, premiums, etc., and Iso the dividends payable on such new hares from time to time, to be the ume both for the Crown and for the kdinary Shareholders, but the Crown’s .lares to lie Preference, as to Capital, nd to be paid for by the Government isuiag debentures or Consolidated .tuck bearing -1 per cent, interest. (2) That our claim for a re-constitn-ion of the Board, giving the Shareudders additional representation on he Directorate, would be relinquished, iiough we in no way acknowledged hat the demands of Shareholders light not to have been, conceded. The Government, on its part, agreed : il) That the Bill would become a 'overument measure, thus preventing s mutilation in its perilous passage nrough, both Houses of Parliament. • 2) That the Uncalled Capital on the xistiug shares, namely £8 0s Bd per nare £o(l(),()()() in all), is to be called ,ip, on the terms provided lor ui

the Deed ol' Settlement, within seven rears from the <lato oi the passage of the Act, or sooner, if in the opinion oi the Hoard the position and earning jower of the Hank justify such calling ip. Any resolution of the Hoard calling up the capital would, of course, he subject to the approval of the Min lister of Finance; and I may here mention that, having that in view, J, on tin 2oth September last, waited upon the Honourable Mr Allen and obtained his assurance that, if the Hoard saw fit to make the call earlier, rather than later in the period mentioned, he would not offer any objection. This promise on his part was followed by an undertaking on my part that the sharetolders would stand to the agreement altered into on Kith September, notvithstauding that the Public Accounts .’nm mil tee had deleted from die Bill, as submitted to Parliament, Clause lu,

which conferod upon you tin whole |

interest in the Reserve Fund of the j Bank in the event of winding v,p. | . Gentlemen, though not securing till we * contended for, we nave obtoained a j substantial advantage in the imdevtak-*[ ing to call up this £M !>s Sri per share j of uncalled capital, and viewing all the circumstances, i think the ordinary shareholders may congratulate themselves upon the terms of the settlement arrived at. And now, gentlemen. 1 hope I have made it clear to you that Mr Watson j and ray self, as your representatives, have done the very best we could in your interests throughout the negotiations. '1 ho loss union we ino-.t oi all j regret is that of the increased representation for sharenolders on the hoard. This I say with ail due regard and respect for past and present members of the hoard; hut, notwithstanding our regret, I affirm and repeat my satisfaction with the past management of the Bank under the Board as | hitherto constituted. 1 may add that t entertain every confidence that the Governor in Conned of this Dominion ipvho appoints the Government representatives on the Board) wills so long as our Parliamentary representation is maintained at its present high level, j appoint only capable and honorable I men to be directors of the Bank. S Nevertheless, I have the conviction f that a greater proportion of .shareholders’ elected representatives on the Board would have been in the best interests of the Bank, giving greater stability in its control, and consequently a greater measure of public confidence. As regards the authority given to the Bank’s Board to increase the capital ot the Bank by an amount not exceeclin<r £3,000,000, the cnairmau has' informed you that the Board has decided co offer immediately £730,1)00 of that amount, which, with the premium of ol) per cent., brings the amount payable for each shJe of £0 iHs_4d up to £lO, j t of £1,125,000, oi whicn mailing h total vy - x > > The Crown’s share hij Ie _ And the Ordinary Sharehoiu. e »* W'liatever views rosy be hela 0- 1 ing the amount of the premium I K Board has resolved to charge m this case, the terms of payment, nairmiy emiit quarterly instalments of 2os each new share will. I anticipate, be regarded as liberal, especially considering the'option given to applicants (that m, shareholders and Crown alike) to pay up in full, or in part, on Ist April or thereafter on any instalment day. Gentlemen, 1 may just remark that while 1 would have preferred that the whole of this £lO per share shotim have been made capital, thereby ranking for dividends, there is some consolation in the knowledge that the £375,000 premium goes to swell the already large reserve of the Bank, at present £1,375,000, which will no doubt continue increasing, and by the year 1920 should reach at least £2,320,000, You will not, I hope, regard my forecast as too sanguine when I say 1 anticipate the divalent can be_ maintained at recent level, lor the 15 per cent, will equal not more than 7t per cent, on the then combined reserve and paid-up capital. The capital by that time will have grown, 1 anticipate, to £‘2.250,000 by the addition of the £500,P00 uncalled capital, at present outstanding, but to be called up within that time. . ' lu reply to shareholders further mquirv as to the future issues of the remaining £2,250,000 of unissued authorised capital, 1 may say that is a matter in the discretion of the Board of the Bank, subject to the assent of the Honourable the Minister of Finance, ami no doubt will depend upW tne prospects of the Bank finding piofita no employment for such. And here I tmiv sav that, in the past, due weight has alwavs been given to the views of veins representatives by the ton vernraent members of the Board, ami 1 have no doubt the same good feeling will always continue between us. i unhesitatingly say I have sufficient confidence in the Board, to believe that further issues of capital will be made when the Board is reasonably convinced that any sum so to be issued can be profitably employed in the business of the Bank,and for the benefit of the proprietors, it is well to iemember, in this connection, that the Bank’s capital and reserves in course of the next seven years, m l piobabl, amount to over five and a halt millions, i put it thus: — Bank’s Paid-up Capital £2,250,000 Dank’s Reserve (estimate for years 1915 to 1920 at £70,000 yearly) ... ••• • ;M-0,000 Guaranteed Stock ... 1,000,000 £5,570,UUt.

With this large amount of proprietors money availaule in the business, \on will no doubt agree witii me that there is little probability of any further capital issues becoming necessary tor some years to come, -before resuming m\ seat I would like to mention emit, owing to the difficulties in the way and the long delay in bringing matters to a point, ray colleague, 'lr \\ atson, and I apprehended that the value m tne Bank’s shares in the London market might be prejudically affected ana that, wnilst negotiations wore m progress, some of the London shareholders might be led to sell their shares at a sacrifice. We therefore deemed it prudent to warn shareholder in London against selling out, and we cabled accordingly to Wir H. \\ • Siiuw. the chairman of the London Shareholders’ Committee. Again, after adoption by the Board of the circular which will be issued CO you immediately after this meeting, we further telegraphed the Shareholders’ Committee that shareholders should await the arrival or the circular before selling their shares. 1 trust our action will have been effective in preventing any of the Loudon shareholders sacrificing then shares. In conclusion, 1 desire to say that owing to the circumstances and nature of the negotiations from whioii the above-mentioned agreements have resulted, it was inevitable, that a good deal of fooling should be displayed on both sides, and some acrimonious discussions Have taken place between the representatives of the conflicting interests. But now that it is all over, we mean to let bygones be bygones, and the directors, irrespective of the interests they represent, will unite in the future, as they have always done in the past, in promoting the pro. perity of the Bank as a whole, oy which mentis the respective interests of the Covernment and the ordinary shareholders will, of course, be best advanced, there being really now no diversity of interest at ah. With the increased resources which the fresh capita I will place at the Board’s command, i believe the Bank will enter upon an era of renewed and increased j prosperity, even greater than that which it has experienced in the recent past. 1 take the opportunity of saying that it is m\ own individual opinion that the shares of the Bank are to-day of more value than they have been at any time during the last twenty years.