The Daily News. WEDNESDAY, JUNE 9. THE BANK OF NEW ZEALAND.

Taranaki Daily News, Volume LII, Issue 112, 9 June 1909, Page 2

The Daily News. WEDNESDAY, JUNE 9. THE BANK OF NEW ZEALAND.

As a vast money milking machine, tin Bank of New Zealand keeps its reputa tibn weil up, fur the financial yeai ended on the 31st March lust. So fa: as the profit and loss aeemint is concern til, absolutely 110 signs of the past iinan cinl depression are ab&mble. Tin g'ross profits for the period named total led €11113.21)13, ns against KjOO.OOO fo: the .previous year, the expenses showily an increase of £5068. So that, we flu. the not profit for 1DU8I), £308,248, 1 just about the same as for 1907-B—l very satisfactory result indeed. Tin directorate, in pursuance of the polic; laid down .by them for some years past have added the sutetantial sum o £200,000 to the reserve fund, and writ ten the sum of £ 15,000 off premises am furniture. The dividend on the prefer red shares is increased this year b; £6250, and on the ordinary shares Iv £12,500. The reserve now stands' a the substantial figure of £(150,000. Xom inally. the capital in use by the Hani of New Zealand is £2,(100,000, but o this sum £1,000,000 is stock guarantee, by tile <ioverninent at 4 per cent., an: £500.000 consists of preference share held by the Uoveniinent, the divideni payable on -which is limited by section !) and 10 of the Hank of New Zealaui AM, J903, 'to a maximum of 10 per cent per unimm. Practically, therefore, tiles two sums, added together and makiiij £1,500,000, are capital only in the sens that capital raised by any company oi debentures is—tliat is to say, it is no on a parity with ordinary caipital, si far as sharing in the profits is concern ed. The ordinary capital of Die Bank i only £500,000, and this fact render the annual statements, which, the Baiil has 'been milking for some year s back unique in the- history of bank balance sheets. It has enabled the Bank to build up in a comparatively short number of years the handsome reserve of £050,000; moreover, if we take for granted a continuance of the policy adopted in the "past-, combined with a Continuance of profitable years in the future, the next live years may see the reserve fund stand at not lei's than £1,500,000, but more probaibly £2,000,000. We have no idea, of course, what is tile objective a'imed at in this connection by the directorate of the Bank » of Sow Zealand; but taking, as the base of comparison, the ease of the Bank of New South Wales, we find that its reserve is £1,(100,000. Now that bank's paid-up capital is £2,500,000,' and these two sums total £4,100,000 of capital in use by the Bank of New .South Wales'. Let us now turn our attention for a moment—ibefore drawing a deduction as to whilt would comparatively form a ftvir computation of an adequate capital and reserve for the Bank of Xew Zealand to the volume of business done by the two banks named. The note issa'e of the Bank of New South Wales is £8(1,000 greater than the Bank of NewZealand; the deposits at the Bank of New South Wales are considerably Over double those of the Bank of New Zealand, the respective figures being £27.207,403 and £12,547/232; bills payable show an almost similar comparison, the amounts being in the order named, £4,323,341 and £1,401,420. The totals On the assets sides of the respective balance sheets, of euunse, disclose like evidences of tile luifch greater 'business done by the Hank of New .South Wales. These need not be enumerated here; one item amongst the others, however, may be quoted in proof, viz.,—advances to customers and bills discounted. The totals are, still- hi the order named, £20,018,14!) and £8,072.030. Lastly, the grand totals of the two balancesheets are £37,130,300 and £17,730.703. In making a. deduction from the figures referred to above, if we were to rely upon the application of tire simple ''ru'e of three" and taking the Bank of New Zealand as' the standard of comparison, the Capital „nd reserve fund of the Bank of New Zealand would work out at tl safety point at less than £2,000,00 Bu't, snpposiing that in order to ma* assurance doubly sure, a further £1,00(1 000 were added to this sum, thus moi than maintaining the equilibrium di closed in the latest balance-sheet » between capital and reserve, and liat> lilies, the question arises, could not sue | a position lie attained tyr a Ies s eun brous method and a more sutisfactor war to the shareholders? The issue o extra capital to pay off the guarantee! £1,000.000, and to bring up the capita and reserve fund to, say, £3,000,000 would Oil the basis of the Bank's abilit;, to continue paying 12'/„ per cent, diyj (lend on the increased capital, involvi the issue of possibly only additioini 150.000 shares, paid up to £3 & 8d pel share, taking the present market price of the shares as guide to (he premium at which they might be offered to present shareholders or the |pu.blic, the total amount of premiums so paid to be I placed to Hie credit of reserve. The Bank's capital would then stand at: Preference shares' £500,000 and ordinary Shares I £1.000.000, and reserve would approximately stand at £1,500,000. After payment of tlje stipulated dividend on the preference shares, and a 12'/;. per cent. on the ordinary shares, there would be left a very large sum either for further accretions to the reserve fund, or fo dividends, or to both if so desired. Homo siloli arrangement, as is pointed out Jjy tile Wairarapa Age, is bound to come sooner or later, were it only to deal with -the anomaly of an ordinary share list of £500,(KI0, making an annual net profit of £308,000.

gram* U as iinlefeusi'blc as one on con- . versationh with friends ;uul customers. Taxation should' be collejled on, profits, j not tools; not on negotiations to create I profitable work lor million#. There is a clear case for .State purchase. And yet not one word Jia.s' 'been spoken .by a British Postmaster-General in favor of reducing' the high cable .rates. The British, post office is a parochial organisation, J doubt if one of the .dictators ruling there has ever travelled to a Jlritisih, colony. Of the cable companies of I treat Britain the enormous totalscapital £28,000,000, annual receipts —arc controlled hy what are known as "cable .rings.' For example, the chairman anil directors of the Eastern Telegraph Company control the working not only of that, but alsto of the Eastern. Extension and South African Company, the Indo-European Company, and .others more or less affiliated. The combination is absolute owner or controller of tin." eatblc net of the Empire, and, indeed, wf the world, with the exception of thu Angl'o-American lineri, which are also under a 'trust.' It limy be safelv said that the Eastern TeleI graph Company is the controller-general ! of the channels of inter-Imperial com-1 mtmications (holding in.cheek the liu.pe- i rial and Colonial Governments on the ] one hand and th'e laud-line competition < passing through foreign countries on the other), bv joint purse agreements i anil entanglements. The posscs-sors of this calble monopoly have acted liolely with a view to their own interests. . . The public are not generally aware that the Eastern Telegraph Company, fearing land competition, has acquired 3 predominant interest in the affairs of the In 10-European Company (overland Hire to India); and, although it is 0000 luil'es' to liomliiy by water against a little over 300(1 liy land, the telegraph (di'arges are same as the cable charges. Tlrt* liand telegraph ca.ii be constructed at £4O per mili', lint, the cables to India' cost £2OO ,per< mile. Xo business main can ounU'nipliUi; this - njivblirshing application of the 'trust' pri'iicnple without indignation." PARLIAMENT ' AXD THE CON'FEKEXCE. Both Houses of Parliament have decided that the Premier shall represent the colony at the Imperial Defence Conference to be.' held in London next month and to prorogue utatil tire end of Septemlier. Tin's decision was not unexpected. Sir Joseph Ward stated that he could not go and leave the' conduct of ibu.sin'es's iji Xew Zealand iji other hands white Purliament ran it* ordinary course. Which was to sa.v tliat unless Parliament mljbur.ied he' would not oe •able to accept the invitation of the I onie (joveninu'iit. In the surrounding circumstances it was hardly fair to expect him to d'o otherwise, Many of th'e ma tte.i's which Pairliaineoit will hiive to oonsnler this year are of unquestionable iniportia nee, but they ja re not so urgent. that they cannot lie held over till without ,puMe disadvantage, t will be necessary for Sir Joseph to lea've tor Ijmul'on in the oourse of a . few i!? ,Vs \, w '"> WQ me su '" e . carry with him the he«t wishes of the .people of the. Dominion for his success in thereat missron upon which lie will 'be engaged.

ON THE FOURTH PAGE. Obituary. Amusements, leiieral Sows. District .Xews. Ginada as it is. The Shine Market. Oil Depot in. Flhmes, Aoted Maori Woman.