TAXATION BURDEN

Sun (Auckland), Volume III, Issue 834, 30 November 1929, Page 10

TAXATION BURDEN

BANK OF NEW SOUTH WALES A DIFFICULT YEAR The marked drop du ring recent years of prices for staple products, coupled with increasing costs of production and the general unrest in industry were referred to by Mr. Thomas Buckland, president of the Bank of New South Wales in his annual address to shareholders in Sydney yesterday. Dealing witfti the items of lesser importance first, the president said that note circulation in New Zealand showed a small decrease. Bills Payable registered a small increase of £84,000. Bank Premises were shown at £225,000 higher largely as a result of new premises at Sydney and Brisbane. “Deposits, £66,056,000, show the email increase of £1;541,000. This, states Mr. Buckland, taken with the like experience of other banks, is evidence of the slowing-up of our national progress, and a lower capacity to provide for the development of the many and varied industries of the community. It seems necessary to repeat what I said two years ago in this connection. The drain on local funds, as the result of borrowings by Governments and Local Authorities, appreciably affects the accumulation of deposits. This, in turn, reduces the funds available for Advances, and for that private enterprise upon which our progress and wealth mainly depend. Without a steady and appreciable increase in deposits year by year the banks cannot extend their support to the development of the community. The banks camiot create credit except by resorting to inflation, with its painful aftermath. This leads me to the point I wish particularly to stress. The people, as a whole, will bring about their own undoing if they pursue the policy of past years, with its extravagant and often unproductive expenditures.

Such policies, with their reduction of output—not necessarily the value of output—must bring hard times and force upon us a lower standard of living. When these are combined with a serious fall in the prices obtainable for our chief staple, wool, and a considerable reduction in the quantity of another, wheat, due to adverse weather conditions, the outlook is hard indeed. The figures of the Balance Sheet give full support to the position thus outlined. Advances have increased by £ 8,074,000, making a total of £50,427,000. When taken with the comparatively small increase in Deposits, this is a striking testimony to the way in which our customers have found it necessary to lean upon us during the past year, and when it is realised that the experience of the other banks is similar to ours in this department also, it behoves all of us to take stock of our position, both as a community and as individuals. The money for these increased advances has been provided mainly from our liquid assets. Government and other Securities, Treasury Bills, and Cash, which show reductions of £2,074,000. £2,000,000 and £4,090,000 respectively On the other hand, money at Short Call has increased by £1,220,000, and other items show small increases. Last year our holdings of cash was on the high side for this time of the year, so that the reduction is not as important as it may appear at first sight. These figures will begin to readjust themselves as the proceeds of our produce come to hand, and the community accommodates itself to our altered conditions. This readjustment will, however, tend to be slower than in past years. The prices and quantities of our primary products are so much less and the National income so much smaller. The Capital is the same as last year. £7,500,000, and it is proposed to add £250,000 to the Reserve Fund, making it £6,150,000.

NO BONUS THIS YEAR In view of the serious fall in the prices of our staples over recent years, there must follow an appreciable fall in the values of our lands and other assets of the community- Your Directors, therefore, feel that the prudent course is to conserve the resources of the Bank. It is proposed to pay the usual dividend at the rate of 10 per cent, p.a., but not to pay a bonus on this occasion. The Shareholders have had the benefit of four bonuses in succession, or, in other words, have received in four years dividends which would, in the ordinary course, have been paid over a period of five years. This decision will not come altogether as a surprise to you, as 1 have warned you on each occasion that the bonus is a matter of each year only, and not to be taken as a precedent or an earnest of. continuance. In 1927 I asked the newspapers not to include the bonus when stating tho rate of return on the quoted price of our shares. This advice, I regret to say, was utterly disregarded. Before leaving our own immediate affairs, it is desirable that I should draw your attention to the burden taxation is becoming in our own particular case. The Bank has paid £350,086 during the year. This is an increase of £55,741 on the amount paid last year, and of £79,019 on the year before. Taxation now represents a charge of £4 13s 4d per cent, on our Capital, a charge which, in two years, has risen somewhat over 1 per cent. FOREIGN EXCHANGE RATES British Official Wireless RUGBY, Thursday. The following rates on foreign exchanges are current todaj’-, compared with the cabled quotations on November 26 and par:—•

Nov. 28 Nov. 26 Montreal, dol. 4.93 4.93 1-8 New York, dol. 4.87 27-32 4.87 29-32 Paris, fr 123.855 123.86 124.21 Brussels, belga 34.67 34.97 Geneva, fr. 25.13 Amsterdam, ft. 12.09 12.08 5-8 Rome, lire 93.175 93.19 Berlin, r.m. 20.38 20.38 Stockholm, kr. . 18.13 18.135 Oslo, kr 18.205 18.205 Copenhagen, kr. 18.195 18.205 18.159 Vienna, sch. . . 34.67 34.675 Pra.gue, kr. 164 3-8 164 5-8 Helsingfors, m. 194 1-8 194J 192.23 Madrid, pes. . . 35.025 35.595 Lisbon, escu. .. 108 J 108J Athens, dr Bukarest, lei. . 375 375 375.00 817 817 25.225 R. de Jan., m. 5 25-32 5 25-32 B. Ayres, dol. . 46 5-16 46 5-16 47.57d Calcutta, rupee 17 27-32 17 27-32 18d Shanghai, tael . 26| 26^ Hong Kong, dol. 20 3-8 205 Yokohama, yen. 24 1-16 25 1-16 24.58d Batavia, fl. 12.12 7-8 — —