BANK of NEW ZEALAND

Taihape Daily Times, 21 June 1918, Page 4

BANK of NEW ZEALAND

ANNUAL MEETING OF PROPRIETORS. (By Special Telegraph.) The ordinary general meeting of the proprietors of the Bank of New Zealand was held at the head office tnis (Friday) morning. Mr. H. Beauchamp. Chairman of Directors, presided. In reviewing the balance sheet the chairman said: The capital remains the same as last year. The Reserve Fund, which, after the appropriation made last year, stood at £2,135,000, is under our proposals, to be increased to £2,200,000 by the addition of £65,000 from the current year’s profits. Notes in Circulation amount to £3,312,995. They show an increase of £752,670. The Bank’s circulation may be expected to remain high as long as existing currency conditions continue. Deposits totalled £30,437,936. This item embraces deposits of all kinds (including Government deposits). The increase shown amounts to £1,385,146 and occurs entirely in the Government figures. Ordinary deposits from the public have slightly decreased. Coin, Bullion, Government and Legal Tender Notes aggregate £7,225,047, These items show an increase of £579,439, more than the whole of which appears under the headings “Government Notes” and “Notes of Other Banks (Legal Tender).” Money at short call, etc., and Bills receivable in London —(£12,442,880). This item has increased £294,731. The greater part of our large London funds continues to be employed in securities of the highest class —mostly British Government short-dated bonds, and full provision has been made for writing down all our investments to market value at 31st March last. Investments in the Dominion now stand at £2,958,176.

ADVANCES, Bills discounted (£1,320,261) show an increase of £63,540, and Other Advances (£16,466,493}, an increase of £1,976,730. The demands made upon us by the meat freezing industry continue Very large. Shipping facilities axe more restricted than they were twelve months ago, and the available "refrigerated space of the freezing companies is beI coming rapidly filled. Many compan- | ies are extending their storage space, and in order to fill it, will have to lean heavily upon the Banks. Recognising how serious would be the position for our pastoralists and farmers if the freezing companies had to cease buying stock, the Bank is assisting the freezing companies and meat buyers to the utmost' extent to which it can prudently go. It is to be hoped that the, decreasing effectiveness of the submarines and the increasing output of new tonnage will, before next xreezing season opens, have eased, the shipping position enough to admit of sufficient meat-carry, ing steamers being set free to remove the 1 greater part of the existing accumulations, and clear the stores for the new season’s operations.

PROFIT AND LOSS. After making all necessary provisions, paying the interest on the Guaranteed Stock, making the annual grant to the Provident Fund, paying bonuses to the staff and appropriating £50,000 to the writing down of Bank Premises and Furniture Accounts, the net profits for the year amount to £336,607, as against 365,489 at 31st March, 1917. Adding to this the amount brought forward from last year £111,595, and deducting the amount of the interim dividend of 6 per cent, paid in December last (£105,000) we have available for distribution £343,202, It is now proposed to pay a further dividend of 6 per cent. and bonus of 3 per cent on Ordinary and “B” Preference shares (making 15 per cent, for the year), and a further 4 per cent, on “A” Preference shares (making 10 per cent, for the year). The total distributions 1 to shareholders will therefore be as last year, viz., £237,500. £65,000 of 1 the amount remaining it is proposed 1 to place to the Reserve Fund, and to carry forward the balance of £145,702, THE BANK’S POLICY. 1 The Balance Sheet shows that the figures of our business afe increasing rapidly. The aggregate of our Assets for this Balance Sheet is £40,838,682, as compared with £38,280,167 at 31st 1 March, 1917. I refer to this development with much satisfaction. To some extent it is the consequence of the war conditions under which we are at present working; but I am persuaded that, in no small measure, it is the result of the business policy which the Bank has consistently followed for many years in encouraging the development of the country by assisting sound enterprise in every practicable direction. An impression has gained ground in some quarters that the Bank is the i Bank of the big man, and that small

accounts are not valued by No* thing could be further from the truth* The Bank is by no means exclusive* It helps the small man as well as the big man. In proof of this, I may say that 70 per cent, of our overdrawn accounts at 31st March last were the adfc counts of small men having over* drafts .of £SOO or less, 11 per cent, represented overdrafts between £506 and £I,OOO, and only 19 per cent. ovef. drafts in excess of £IOOO. These fig: urea show that we are not essentially, or even mainly, th® Bank of the big man. The small man may always depend upon his requirements receiving sympathetic consideration at our hands, and will usually have them met, provided that he has reasonably satisfactory security to offer us. DOMINION PROSPERITY. The prosperity of the Dominion continues. The British Government has purchased practically all the principal products of New Zealand, and the figures of the operations of the Imperial Supplies Purchase Department illustrate the extent to which our producers have benefited. The figures up to 25th May are as follows:

Purchases Total Commenced Payments Meat, 3rd Mar., 1915 .. £24f&29,688 4th Nov., 1915 .. $72,951 Butter,’ 20th Nov. ? 1917, .. 2,764,303 Slipe’ Wool 31st Mar. ; 1917 1,876,072 Sheepskins, sth Hides, 19th Mar., 1917 .. 695,830 Seheelitc, 20th Sept., 1915 101,740 Other business ‘1 158,534 £64,016,424 MORTGAGE RETURNS. The Mortgage returns of the Dominion registered during the year ended 31st March last were some £2,027,000 less than for the year ended 31st March 1917 7 It is important that we should guard against being misled by these figures into the belief that all is well for the future, and that the present happy position of financial affairs will continue without interruption. It is well that wo should recognise at once that this cannot be. The huge sums raised locally by the Government for war purposes are being largely spent within the Dominion, creating an artificial prosperity which cannot be expected to last longer than the expenditure of the borrowed—- 1 money which is creating it j and when all this money no longer there will almost certainly be a great coqitaction of business in every diredaaom Prudent people will therefore anticipate and make provision for this inevitable contraction, recognising that war prosperity must necessarily -be temporary. POST-WAR CONDITIONS.

After-war conditions are naturally in the minds of most people, and what those conditions are likely to be we can only judge by the experience of the and what history teaches us # .Writing of the great peace after the Napoleonic War Spencer Walpole says in his HistfJty of England: “It 'is clear, 'therefore, that .the first consequence, of peace was to reduce our import trade by nearly 20 per cent., and our export trade by 16 per cent. Prices fell below the cost of production and English goods were selling for much loss in Holland and in the North of Europe than in London or Manchester.” Shortly put, this meant that the impoverishment of the customers destroyed their purchasing power. utilities—that is, the mines j the forests j etc., were there, ability was there, and the labour was there in abundance; but the capital : and purchasing power were absent This is not a picture of “Business as usual.” The report will be continued in future issues.