The Taihape Daily Times AND WAIMARINO ADVOCATE. SATURDAY, JUNE 19, 1920. BANK OF NEW ZEALAND.

Taihape Daily Times, Volume XI, Issue 3507, 19 June 1920, Page 4

The Taihape Daily Times AND WAIMARINO ADVOCATE.

SATURDAY, JUNE 19, 1920. BANK OF NEW ZEALAND.

With which is incorporated “The Taihape Post and Waimarlno News."

VJbjen Mr Harold ' Beauchamp, Chairman of the Directors of the Bank of New Zealand, speaks ex cathedra at the annual meeting of Bank Proprietors it is discreet for most other people to listen. We, among others, may experience some difficulty in arriving at precisely similar conclusions in every subject touched upon in the speech delivered, yesterday, but we do not presume to oppose cur views and opinion s against those of Mr Beauchamp, who has all the inside knowledge of the subject, much of which it is not advisable we should have access to, and we are prepared to admit it might not prove best for the country if we had. As is the case with newspapers, every person thinks he can run a bank; but does not the speech and the balance-sheet i clearly indicate that the world is • passing through albnormal times from which banks and bankers are no more immune than any other body or business? Banking during the past year ha s been of a character to surprise ) even bankers themselves; the bank- j ing business seems to have been | i drawn into positions its proprietors could scarcely have contemplated. The British Empire has been hi I very hard by exchange rate differences; New Zealand felt the blow to some extent--and it was quite proper that Empire banks should stand behind the Motherland in any attack upon her financial stability just as our man- j hood rushed in 1o help in stemming I an invasion of another character. Our finance is as much dependent upon j the Homeland finance as our freedom I is dependent upon the British navy, | therefore we fully and frankly accept J Mr Beauchamp/'s views with respect to I investments in Britain, and with respect to no inflation of currency that could in best common judgment be avoided. Certain it is that the Bank of New Zealand never stood ibetter in credit than it does to-day, despite the moonshine talked by some know-all critics. The Empire is virtually at the back of the bank at this minute, and it. is very difficult indeed to imagine a better security. In fact, the chairman's explanation respecting the increased note issue seems entirely superfluous when viewed in the world's distorted finance mirror, for if there should have been anything suggesting currency inflation it has resulted purely from force of circum-

stances, something the Bank could not help and do its duty loyally to the Empire. Another remarkably profitable year has been experienced, so much so that some people will naturally think that the per centage' of net earnings is becoming on the unreasonably high side, but, of course, future years may also be productive of abnormality, of an abnormality that will absorb the smile of this and of previous years. It must not be forgotten that, the Bank has h» d its evil days, moreover, the golden era it is now passing through was not of its own making, tout of something that came its way which it could not help taking advantage of. As Mr Beauchamp states, the deposits owned by the bank's customers do appear to be remarkable, having increased by 150 per cent since 1913, but if all the bank's clients have only had the prewar volume of business the commodities in which they trade have doubled and trebled in value, rendering it necessary to. increase selling prices, and it is these increased selling prices that are largely accountable for larger amounts standing to businessmen's credit, they are also responsible to some extent for an increased' note issue as to purchase the same volume of goods was to double or treble the currency involved. It would indeed be a lucky bank that could meet such a spasmodic contingency with gold. Fixed deposits are more dependable in estimating the actual increase of prosperity; they disclose that the whole Dominion has been able to invest on fixed deposit a million and a quarter more than it did last year, which, when viewed with attendant extraordinary circumstances does not strike one as being cause for much surprise. It should be matter for surprise and alarm if some such increase in laying aside for the rainy day were not possible. However, the movements of free and fixed deposits are remarkable if only as indicating the solid prosperity New Zealanders have been experiencing. Remarkable movements of deposits over a term of years are not peculiar to the Bank of New Zealand, for the Post Office deposits account involved just about double what it did in 1914. In other words deposits in 1919 were twice * what they were in 1914. The Bank has shared in the general prosperity a prosperity that cannot be minimised when viewing the surplus of exports over imports. Bigger figures in national selling a s well as in national buying compelled an extension of the currency; not even those who cavil at the Bank would for a moment suggest that business should be limited rather than that the currency should be extended. Similar factors may have influenced the cash and bullion situation, but there are so many extraordinary circumstances surrounding Empire finance at this moment, that a clear and perfectly obvious explanation is Ipractically impossible. All that the bank's clients desire to know in such strange times is that the bank is doing n sound business; a flourishing bank reflects a flourishing people, and those who know the history of the Bank of New Zealand will not envy shareholders enjoying something better than they had to contend with in the early nineties. There is much in Mr Beau champ's remarks that should be very closely studied by both producers and traders, we refer to what lie under the heading? of Price Levels. Land Values, Money surf Future of Produce Market*. These are subjects which cannot be intelligently discussed in one short gem-

article, we therefore -hold them over to a future issue.