BANK OF NEW ZEALAND

Taranaki Daily News, Volume LIII, Issue 207, 10 December 1910, Page 5

BANK OF NEW ZEALAND

HALF-YEARLY MEETING. A PROSPEROUS OUTLOOK. By Telegraph.—Press Association. Wellington, Last Night. The half-yearly meeting of the Bank of New Zealand was 'held to-day. Mr. H. Beauehamp, chairman of directors, in moving, the adoption of the balance-sheet, inter alia, said:— With regard to our profits for the halfyear ended September 30, these were unfavorably affected by diminution in earning power through the substantial reduction in advances to customers in New Zealand. This reduction will not surprise you when you consider the large surplus of exports over imports for the year ended September, 1910. Still, our profits on the whole have been very satisfactory, and the net'result is considerably better, compared with the corresponding period in 1909. A year ago I iwas able to congratulate shareholders and the country generally on the vastly improved prospects, andi 'I am pleased, on this occasion, to be in a position to reiterate those congratulations and to emphasise them. The banks to-day are flush of loanable credit, as is shown by the marked expansion of the fixed and free deposits and the very insignificant increase in the advances and discounts. While the deposits have increased by £2,165,"2"29, the advances show the trifling increase of £6889. It may be urged that the banks have been too particular about securities and could have made larger advances were they less punctilious. This is not true. Every legitimate demand on the banks has been promptly met, and no one with a reasonable banking security has been refused an advance. Unfortunately, there is still a lack of industrial enterprise, and money is permitted to lie idle in the banks—or, to put it another way, people are throwing upon the banks the responsibility of finding an investment outlet instead of undertaking it themselves. THE OUTLOOK. The trade revival which set in about; twelve months ago appears to be fairly general. A white paper issued by the Board of Trade gives comparisons of the exports and imports of the principal countries for the first six months of 1910, which show a substantial increase all round The trade of New Zealand has also expanded. The excess of exports over imports for the past year amounts to the large sum of £5,857,078, which w ill account for the growth of deposits in the banks andi the buoyancy of the Treasury returns. The expansion in trade necessarily calls for considerable capital, and the records of the year show that extensive demands have been made upon the British investor. For the nine month endedi September 30, the new capital raised in Great Britain amounted to £216,755,300, as compared with £148,768,000 for the corresponding period of H 909, and £141,215,300 in the nine mbnths of 1308. During the past nine months Canada obtained £31,883,900 and Australasia only £7,359,000. In nine months Canada, the United States, Argentina and Brazil have raised over £90,000,000 from the British investor, and the future demands of these countries are likely to be as large as ever. It is generally considered by those competent to express an opinion that the keen demand for capital must, in the near future, cause the rates for money to harden, and already we see factors at work to bring about this result. Borrowing in the London market, except at higher rates will, I fear, be a difficult operation. In particular, local bodies, with commitments, may find this a troublesome matter. The outlook for our primary products is not perhaps quite as gjood as it was this time a year ago. 'Still, it is by no means unfavorable. :Wool is lower than it was a few months ago, and the main reason for this decline appears to be the absence of American competition. The high cost of living in the United States has checked business in many directions, but a recent cable message is more reassuring. This will probably result in increased activity, and wool is bound, sooner or later, to be favorably affected by the demands of America. It may not be generally known .wihat a gigantic barrier is erected against the importation of wool (raw and manufactured) into the United States of America. For the year ended June 30, 1.910, when the imports under this head amounted in value to approximately £ 14,000,000, the ad valorem rate of duty equalled 59.23 per cent, as against 63.18 per cent, in 1809. The Democrats are making (as they have been for many years past) strenuous efforts to obtain a substantial reduction in this impost. If they are successful I need not point out what an important bearing it would have upon our trade relations with the United States. Butter has not quits responded to the sanguine opinions held by those in the trade, yet prices realised by producers leave a handsome profit. This industry is continuing to expand most satisfactorily. Frozen meat has maintained a good manket, but, in view of the increase in American and Australian supplies, it is a question whether this market will hold at its present comparatively high level. In. this connection, it is interesting and instructive to note the strong and persistent agitation for cheaper meat now prevailing on the Continent of Europe—particularly in Austria. Taking a comprehensive view of the outlook, I think New Zealand will have a prosperous New Year; and it is to be hoped that the prosperity will not result in a condition of value-inflation and extravagance in general. Rather may we hope that endeavors will be made during good times to establish enterprises and build up industries.