Bank of New Zealand

Stratford Evening Post, Volume XXX, Issue 56, 9 June 1916, Page 7

Bank of New Zealand

ANNUAL MEETING OF PROPRIETORS. (Special to “Stratford Post.”) Wellington, June 1). The ordinary general meeting of proprietors of ihe Bank oi New Zealand was held at the head office, Wellington, at. noon to-day, Mr H. Beauchamp, Chairman of Directors, presiding. In moving the adoption oi the report and balance-sheet, the Chairman pointed out that the -I per cent, guaranteed stock, which appeared in the previous balance-sheet at £528,988, now stands at £529.988. The only other alteration in the capital is that the new issue of ordinary shares of £500,000 is now fully paid-up, the final instalments of purchase money having been duly paid by shareholders. The reserve fund by tiie addition of the further sum of £12,141. which falls to be credited to it in respect of premium on new shares, and the transfer from profits of £50.000 which the Board proposes to make, will stand at £2,062,111- of which amount £1,000,000 is invested in British Government securities. Deposits (£211,550,6< 6) exhibit the tei' large increase of £1.815,019 as compared with the figures of a year ago. THE STAFF.

Referring to the staff, Mr Beanchamp stated that since the outbreak of the war, the Bank has granted leave to 217 of its officers for the purpose of joining the Military Forces. Of this number, 13 have given up their lives on active service, and 2S others have been wounded in action. So far. 16 have received i heir discharges from the Expeditionary heroes and 12 of these have returned to Bank duty, the remaining four being still unfit'to take up civil employment meantime. In addition, wo have lost the services of 36 of our officers who resigned their appointments in order to join the Army. As mentioned last vear, idle Bank is allowing half-pay-to Colonial officers on leave serving with the Military Forces, and full pay to members of' the Eondon s aff, the military pay of the latter being on a lower scale then that of the Colonials. The results of the year’s work have been sufficiently good to justify (ho Board in again paying the staff a bonus of five per cent, on salaries. Tn this bonus the members ot the staff serving with the Army shared as on the basis of full pay. ABNORMAL CONDffiONS.

Mr Beauchamp also said: As yon are probably aware, the margin between the values of the Dominion s exports and imports for the year, owjn <r to the abnormal conditions winch have ruled, has been unusually large ; and this wide disparity is reflected m. and is the cause of the very large increase of our funds in London Imports to London have largely increased, whilst imports therefrom have decreased, and the result as— London accumulations. It should.be mentioned that our surplus funds m London are profitably employed principally bv investment m short-dated British Government securities ami are readily available to us when rew ciuired, , . V In mv address last year, 1 sta, i that full provision had been made tpr all depreciation in Rendon investments. on the basis of market values at 31st March. 1915. Tne second British war loan, at M per cent (vie cling a return of about one-half pei cent, more than the earlier loan) was issued in June. 1915. and is non nnoted at a discount. flic rates on short-dated British Government enrities have also increased: a year a<m six months Treasury Bills yielded £3 12s Gd per cent, per annum—at 31st March last the yield was tj Decent. per annum. In view of tins increase in the interest return, the market values of aR gilt-edged securities have further declined from last year s values, and considerable provision b<, a vain had to be made by the Bank for depreciation on its investments at31st March last. . Tn this respect,: however, our experience is only tl a of all other financial mstuutions. m dueling the leading Emd'sh banns tint, have funds invested on such se- : Jities The Bank, f may say, has iviittcn down the whole of .t» Conto. investments to the marker puces ac tually ruling there on 31st Match last. AVAR FUNDS CONTRIBUTION.

T„ pursuance of the resolution passed at the, Half-yearly General Meetnio- held in December hist, bIU.UUt was set aside out of the Bank s piolits as a contribution to the National Fund’for Wounded Soldiers and then dependents. The amount has recently been paid over to the War Council, and in acknowledging its le'ceipt, the Minister of Internal Affairs wrote to the Bank as follows i am deeply sensible of the practical sympathy which the Bank of New Zealand has thus shown towards our wounded soldiers, and on behalf of the Government and the National War Funds Council, 1 shall be glad it you will accept and convey to your Board of Dilectors and Shareholders my sincere thanks for their exceedingly liberal contribution With regard to the request that the money be applied to the relief of wounded or permanently incapacitated soldiers and their ticpendants, this will be duly complied with.” WAR AND FINANCE. it is again impossible to avoid reference to the titanic conflict now raging, because this War is aliectiug the trauc, commerce, industries, and economic fabric of the world, and the long arm of its influence reaches into almost every corner of the civilised game. To-day, fifteen States, or countries, are in open war, viz.: Britain, France, Russia, Italy, Belgium, Portugal, Montenegro, Albania, Serbia, .Japan, Egypt, Germany, AustriaHungary, Bulgaria, and Turkey. The years of secret preparation by the Central Powers of Europe placed them, at the outset, in a position of superiority, and enabled them to achieve much ; but, in the past twelve months, relatively little progress lias been made on either side, and as one writer in a British magazine has : ai.i, ‘■nothing has happened in this War exactly as it was thought it would happen.” Both sides have had to k'arii many new lessons in warfare, in organisation, and in app.icatiou; and now, after nearly two years of hostilities, liie cad seems still a lone wav off. How far weak and vacillating statesmanship lias contributed to the prolongation ol hostilities will never be known. It is to be feared, however, that a heavy responsibility rests at its door, ft is little short of humiliating to read ol the Cabinet crises, which arc constantly recurring, over one sub-

jt'i t or another. Such bickerings arc most nnpal i iotic, and should be resoluU'ly repressed in this I• int> ol Liu* Empire's danger. Politicians should uiiiio to give effect to tho unanimous determination of tho Empire Co win the War, and concentrate every eliort upon it and upon it alone, regardless of faction or the views of any particular section of the community. War spells waste. It involves the destruction of capital and material, and the misuse of energy and power. It is the economic aspect of the War that interests us most, and the amount of capital that is being dissipated in the present conflict is to he reckoned in thousands of millions. The “Economist” (London) recently presented a table showing the cost of the War to the European countries, together with tho addition to their respective debts, and the -inteiest per annum involved. The figures are an estimate to March Hist, 1910, and may be accepted as approximately correct. They are:—

i 'i'!tain ; Direct cost of the war, £ 1 ,550,000,000; Addition to National Debt, £1,980,000,000; Interest per annum, £09,000,000. France: £1,655,000,000; £1,900.000,000 ; £95,009,000. Russia: £1,425,000,000; £1,500,000,000; £75,000,000. Italy; £9(50.(,'00,000; £ 100,000,000; £20,000,000. Belgium ; £120,000,000; £120,000,000; £6.000,000. Serbia and Montenegro: £IOO,000,000; £100.000,000; £6,000,000. Entente: Direct cost of the war, (- 5 210,000,000 ; Addition to National Debt, £5.(00,000,000; Interest per annum, £271,000,000. Germany: Direct cost of the war, £2.100,000,000; Addition to National Debt. £2,100,000,000; Interest per annum, £105,000,000. Anstria-Hun-orarv ; £1,100,000,000 ; £] ,150.000,000 ; £66,000,000. Turkev: £140.000,000; £150.000,000; "£9.000.000. r, H 0.000,000 : £90.000,000 : £2.000,000.’ Alliance; Direct cost* '6f the war. £9.970.000,000; Addition to National Debt, £9.£90.000.000 • Interest per annum, £182,000,000.

All hellhrerents: Direct cost of the —r, £8.580,000 000; A ddition to National Debt, £8 .830 000,000 Interest nor anmim, £153,000.000. I” th'-’ a l> nve fiuives. no allowance is made for Hie war debts contracted bv the British Overseas Dominions, by Japan and Portugal, or for Hm exnmuliture necessitated by the Wa- in the case of nent’a! countries. Holland c '>vitzoHrnd. Greece, and Boumania have mobilised tlieir force-; and are on a war footing; and their exnen«es, wliicb they can ill afford, would add a further considerable sum to tim total. But the actual cost of the War is not the only financial calamity to be reckoned with. We must take account of the destruction of buildings, railways, and other works of national importance; the reduction in agricultural values, etc.; the considerable loss of production in Northern ■ France. Belgium. Fast Prussia. Poland, Galicia, ancl Serbia ; the sinking of ships and their cargoes; the deerbfijsj? in stocks of food, metals and othc}i| raw materials; the misuse of '.macjhlnorv employed iu making muni- . tiopsj; themjfprec'iatiiip. in t prices of setuiritilfff? .and iJrf ’.the Parities 0f othemassets; the cost of pensions; the loss pf human capiilJjil,)ip i s measured bv the killed and pbnitanehtly' disabled, -r-all j, these must he included in the reckoning. Up to ; flip end ;of last ’ par, 5 the numbers killed, died from disease. t ami permanently inea.pacitat(vd' for the’ ‘ ten 'eouiitries ! have named, are assessed at ,3,080,000; and the loss of human capital at £1,585,000,000. And the war is not over, nor is the end in sight. With ao large a percentage of Allied shipping'engaged in'war services, f'very available factory operating im the production >of munitions, ami with a large proportion, of the uinlt population engaged in war work, it is- not surprising, that British trade, as regards exports, has shrunk. The Hade figures of the’ United Kin'gdo'm lor the past five years Vre ns follows: Imports. 1011, £080,157.597 • 10f9 £741,0ff).0-3] ; ...... 101.3, .£76,8,734■,730P)M, £696,035,113; 1015, £853,753 - 270. f ' • ■'

..Exnorts: F.K. Produce: 1911, £lll - n 9.298; 1912, £187,223,139; 1913, .■6020.215.289 ; 1911, J £l3O 721 357 • 1915; £381,617,336. 80-Exports; 1911, £102,759,131; 1912, £111,737,691; 1913, £109,575,037; 1911, £95,174,106; 1915, £98,797,123. Ever since that fateful day in August, 1914, the British Empire has been engaged in making “preparations” lor war, and, incidentally, lending off attacks. Huge blunders have been committed, but, on v the whole, a wonderful result has been achieved. Britain has always been a first-class naval Power, and to-day her position as Mistress of the Seas is more firmly established than ever before. She is also now a first-class military Power, with approximately 5,000,000 men under arms fully equipped, fed, clothed and tended as soldiers have never been before. And this is not all: Britain has maintained her foremost rank as a financial Power, as the world’s hanker, sea carrier, and insurance underwriter. AVe may go a step further and say that, while the needs of the moment have thus been met, tlie future has not been neglected. British manufacturers have learned most valuable lessons in organisation. in factory management, and in co-ordination of effort. They have grown to recognise the supreme value of machinery, and they have also discovered that the British Board of Trade 1 has become a “live” institution, and can he utilised to much advantage by the captains of industry and commerce. The Nation that has accomplished so much in so short a

time, has surely a great future before it. Britain is, to-day better known, and more highly appreciated and respected by the Nations of the world, than ever she was before the war. She is applauded for being faithful to her friends, true to her word, generous and fair to her foes, scrupulously honest in her business dealings, and actuated in all things, by a profound desire to live in peace and amity with all the world.

WAR PROSPERITY. With the enormous expenditure on war goods and war services, it is not surprising that there is considerable trade activity and much prosperity the world over. Even in Britain the working classes are fully employed and are receiving extraordinarily high wages, and, ii' reports speak truly, the laboring people of the other belligerent B f,, 'es a'>' in a similarly thriving condition. New Zealand has shared. to an abnormal extent, in what may be termed “war prosperity.” There has been an exceptional demand for our wool, meat, and dairy produce, ou 1 prices have reached a particularly bieb brol. To realise to what extent we have profited bv the war, it Is only necessary to give the export and import figures of the Dominion for the last few years. The

figures for the respective years, ended .March 31st, are:—

LOOKING TO THE FUTURE.

The gains and losses ol the war to New' Zealand are obvious. High prices for produce have brought us considerable wealth, which, probably, would have been much greater had we v ommamled fuuer shipping facilities. On the other ham’, the departure from th(> country oi so large a number of the flower of our maiihoou, is, while an absolute necessity, causing a serious disturbance in the economic and industrial life ol the community. Looking to the future, we may saimy conclude that the world which will emerge from the war will be a very different world from that which entered it. Termutatiops and changes of a far reaching character may be expected to take place. So far as the Dominion is concerned, we shall be faced, at the close of the war, with two questions—both vital to our interests. New Zealand is a producing country and, by necessity, a borrowing one, and the state of the produce markets, and of the money market, will have considerable bearing cm our future prosperity and development. The present war is on such an enormous and unexampled scale that we have no reliable precedents to guide us in forecasting post-war condi.;ons, and, as far as the markets are concerned, it is particularly difficult to make assertions with confidence. Europe will almost certainly be compelled to economise—Great Britain quite as much as the other belligerents. Now, assuming the present consumers of our products will be forced to economise, it is obvious that ■hey will bo unable to pay high prices for the foodstuffs we send them. The values of all our products, therefore, niust naturally be expected to fall, and to fall perhaps rather heavily, from those current to-day. The measure of that fall is, however, the uncertain feature, being dependent on the markets which will be open to ns and to a variety of other oircunistaiicefei

Fortunately, this country is differently situated to many others, in that the products of the soil—-to which it looks for its chief support and weak.. -—are increasing in a much greater ratio than its population, whereas, in the Northern Hemisphere, tlm contrary is the case. It seems, therefore, that should we be faced tvitn any set-back after Hie termination ox hostilities, it will lie but of a temporary character, an we may thererore look hopefully to the iuture. As regards the prospects of the money market, there are grounds lor speaking with more confidence. So much capital will be wanted in Europe thtiij there will ho very little to spare fori other countries: certainly there will he no chance of obtaining money at pre-war rates. Even if we should be (prepared to borrow at the then ruling rates, the British Government might find it necessary to continue the 1 present restrictions on capital issues.

There are disquieting features in the possible post-war conditions, and for that reason it is of the importance that the people of New Zealand, while they have the opportunity, sluhild recognise the true value of economy. The more we save, the heater we shall be able to assist t4ie .Empire now and to face the unfavorable conditions that must, 1 fear, inevitably follow the declaration of peace. This is. obviously, the only prudent courser to twlopfcv and the need, therefore, tor ' economy cannot be too strongly urged upon every class of tbo community. The Chairman then formally moved Hie adoption of the report and bal-ance-sheet. ■ Mr William Watson said: I have pleasure in seconding the motion loi the adoption ol the report and bal-ance-sheet, and congratulate the shareholders on their receiving the usual dividend notwithstanding the large expense incidental to the war, the rates and taxes alone haying amounted to £137,096, as against £74,548 in the previous year. It is possible that, without full explanation, some shareholders may imagine that the profits amounting to £357,093, when compared with £396,166 in the previous year, indicate a falling off in the earning power of the Bank, and I therefore take this opportunity to asuire shareholders that the ordinary earning power has increased in quite a satisfactory measure. The shortage in the profits shown is due to the provision for depreciation in investment securities mentioned by the chairman in ids speech; indeed the provision was much more than the shortage, but this must not be taken to mean an ultimate loss, for the interest receivable on the securities remains the same, as if no depreciation had occurred, and values will doubtless recover after the war. I may quote the following appropriations for the same purpose macie by leading banks in Great Britain and Ireland in or for the year 1915; — 1 Barclay and Co., Ld., £750,000; London City and Midland Bank, Ld., £642,860; London County and Westminster Bank, Ld., £172.112; Lloyds Bank, Ld., £410,000; Bank of Ireland, £390,000; Bank of Scotland, £270,000.

Next March, the period for winch 1 was elected one of your representatives on the Roard will expire, and I shall again offer myself for re-election at tile December meeting. On that occasion I trust I shall receive another mark of the confidence v l;ich the shareholders have hitherto leposed in me.

it imports. Exports. Excess o! Exports. £. £. £. 1910 •21,308,131 33,1(38,391 12,139,900 1913 19,803.037 27.103,803 7’(iOO,71(i 191-1 21.833,131 23,138,128 1,(303,27 I 1913 21,309,(388 22,(313,233 1,333,377