The Sun 42 WYNDHAM STREET, AUCKLAND SATURDAY, JUNE, 21, 1930 “I KNOW A BANK ”

Sun (Auckland), Volume IV, Issue 1004, 21 June 1930, Page 10

The Sun 42 WYNDHAM STREET, AUCKLAND SATURDAY, JUNE, 21, 1930 “I KNOW A BANK ”

MAX V investors throughout New Zealand today will be able to sing exuberantly with Shakespeare:— I know a bank where the wild thyme blows. Where oxiips and the nodding violet grows; Quite over-canopied with luscious woodbine, With sweet musk-roses and with eglantine. And for those happy recipients of luscious dividends the wild thyme blooms and the nodding violet grows with the delightful fragrance of 14 per cent, and a fraction over to make their financial summer all the sweeter. In more prosaic words, the Bank of New Zealand has had another difficult, but successful, year. It has come through the country’s bad times with banner's flying', with a surplus of a million pound notes crackling a tribute to prudence, inflexible strength and that glorious tradition which, whatever or whomsoever falters or falls, makes it a law unalterable that the banks always must stand impregnable as fortresses of fortune, forever firing a salvo of splendid profit. There is no necessity to recount in detail the robust success of an institution which represents almost to perfection in some ways a conservative Dominion’s compromise on the Socialistic demand for a State Bank. And since the State is the largest shareholder in the Bank, enjoying that fragrant 14 per cent., the taxpayers who do not notice any benefit from the dividends, may rejoiee with all the shareholders and congratulate them heartily on their escape from the rigours of hard times. Tradition has made the annual meeting of the Bank of New Zealand an occasion for a heart-to-heart talk between its chairman and all the people. This year Sir George Elliot has proffered enlightenment, and has done an informative duty extraordinarily well. Following on the precedent of predecessors, hut appreciably much less garrulous, the competent chairman has surveyed the Empire from Threadneedle Street to Lambton Quay, and the world, figuratively speaking, from China to Peru. He also, with a clear vision, has explored the economic jungles, and blazed a track for prudent men and imprudent politicians. The whole world is crowded and jostled with difficulties—except the Bank over which he exercises an efficient control. In this country finance, outside banking circles, is troubled and strained. Public and private expenditure is on an unwarranted scale. “New Zealand, unfortunately, is following to an extent in the footsteps of Australia, where acute depression is being experienced.” We can support that warning without any qualification, because we said it first and have emphasised it time and again much to the discomfiture of politicians and others who do not like the truth unless it be presented in a soothing disguise or wrapped up in meaningless words. As a rule only audacious laymen adventure into the rarefied atmosphere of high finance. On this occasion, happily, the highest among New Zealand’s banking financiers has come down from the heights to point the way to commentators. In discussing trade and general economic conditions, Sir George Elliot gave impressive voice to a timely wisdom. So: “Since the days of Bright and Cobden the ideal of Free Trade had held the imaginatioivof the British people, but changing times and changing conditions demanded adjustment of ideas. Tradition could not always with advantage be maintained.” There, in concentrated form, is the whole truth behind the difficulties of this period and the necessity of a change in policy. And it is as applicable to banks and bankers as it is to Free Traders and other obdurate traditionists. Have the banks moved with the changing times and adjusted their ideas? Have they done all they might have done, as it was their duty to do, to make difficult conditions a little easier for merchants and industrialists? Are the farmers, for example, satisfied with the treatment they have received from hanks during the pressure of difficulties? These are pertinent questions which call for the consideration of the State and an allied financial institution which, in spite of difficulties, changing times and changing conditions, made a new record in bank profits, raised its reserves to £3,550,000, gained a net profit of nearly one million and a-quarter, and had close on two million pounds sterling for distribution? Bank administration and poliey in this country may be so perfect as to eliminate any question of an adjustment of ideas and tradition, but in Great Britain, the eradleland of the Empire’s banking methods, bankers are being called upon to answer for their stewardship of the nation’s financial affairs. It may be some time yet before a special committee of consideration rather than investigation passes judgment upon them; but in the meantime many people think that the great banks ought to take a fairer share of hard times, and do more to assist harassed traders, farmers, and industrialists. One need not hesitate to hazard an opinion that what is true of British hanking institutions is not far away from the truth in New Zealand. Industry and economies, together with the increasing evil of unemployment, everywhere are forcing the financial issue to the front. All kinds of economy and rationalisation are being advocated, and doubtless all are necessary and even clamantly essential. May not the wealthy banks take a leading and perhaps a more sympathetic part in stimulating enterprise, even at the cost of a little more rationalisation of their dividends? They have the power and the resources to do it, although tradition has taught them to be more responsive in exercising their power of veto. Beyond doubt expenditure, private and public, is on an unwarranted scale. May not the same be said also of bank profits and dividends? There should not be an over-selfish monopoly of the delights of wild thyme, nodding violets and sweet musk-roses.

THB QVIET CORNER.