BANK OF NEW ZEALAND

Taranaki Daily News, Volume LIII, Issue 330, 17 June 1911, Page 6

BANK OF NEW ZEALAND

\ AS'NTAL MEETING. By Telegraph—Press Association, i Wellington, Last Night. - At the annual meeting of the Bank of New Zealand, the chairman (Mr H. Beau- ! champ), in moving the adoption of the 1 report and balance-sheet, said:— _ As you are aware, this is the jubilee year of the Bank, and it gives me very great pleasure indeed to pr ;ide on such an auspicious occasion, nv"'e especially ; as the re]>ort and balance-sheet submit- ' ted to you disclose so satisfactory a posiI tion. Following my usual practice, I will [ first review briefly the figures of the bal- > ance-sheet. i Capital.—TJio paid-up capital of the ' bank remains unchanged at £2,000,000. Tho Reserve Fund—ln my speech last ' June, you may remember I expressed - the hope that the Rank would this year : be in a position to show its Reserve Fund ' and undivided profits at not loss than . £1,000,000. I am pleased to announce , to-day that our Reserve Fund, after taki ing credit for an appropriation of £200,- ; 000, which the directors propose to maKe • from the profits at March 31 last, will : stand at £1,000,000. The following table l showing the rapid growth of this fund F since 1008 may be of interest to you: £ , At March 81, 1900 81,294 1907 250,000 f 1008 450,000 • 11)0!) 650,000 [ 1910 800,000 1011 1,000,000 1 You will observe from the balance--1 . sheet tliat £500,000 of the Reserve Fund " is now invested in British Government 1 securities. - Notes in circulation stand at £977,240 " —an increase of £57,017 as compared • with last Tear. » Deposits are more by £3,199,066 than > at March, 1910. This increase is due : in o. great measure to larger Government balances, but ordinary deposits, both free and fixed, also show a considerable and satisfactory expansion. 1 Bills payable and other liabilities showi an increase of £292,503, mainly in bills , payable, which arc always an uncertain . f and varying quantity. . I Turning to the assets side: x> Coin, Bullion, Money at Short Calls, i ), etc. —As compared with the previous . ■ year, money at short call, Government and other securities in London together | show an increase of £2,818,595, and now t stand at £6,710,239. Coin and cash balI ances are more by £104,515 than • at i March, 1910, the item now standing at "■ £3,248,200. Bullion also shows an iii- > crease of £7514. In viewof the consid- . erable expansion in deposits to which I . have already referred, a corresponding j increase in cash assets is, of course, to oe i looked for. The figures show that tho , Bank is maintaining a strong position. | I may add that the totals under tins , head, together with tho amount of bills ' receivable and investments in the colonies, are equal to 07'/ 2 per cent, (or >Bs fid in the .£) of the total liabilities of the Rank to the public. Hills receivable, in London and in transit, arc less 'by £331,939 than at March 31, 1910. To a shrinkage in the exports from the Dominion the lesser amount under thL* heading may be attributed. Investments in the colonies stand at £1,338,010—an increase of £193,265 on last year's total, representing the extent of our further purchases of debentures of local bodies, some of which are held only temporarily pending realisation. Advances.—Bills discounted and other advances show increases of £77,177 and £912,367 respectively on the previous year's figures, tho natural result of renewed activity generally. Bearing in mind the keen competition for good advance business that lias now existed for a considerable period the expansion ui our advances must be regarded as satisfactory, and indicate that we are getting a fair share of tho suitable business offering. It is hardly necessary for me to repeat that this very important branch of the Bank's business continues to receive our greatest care and attention. Assets Realisation Board Assets.—The , following table shows a steady and satisfactory r-'uetion in these assets for the year: At 31/3/10. At 31/3/11. Balances owing by purchasers \ £286,899 £178,540 Other Assets unrealised 46,391 37,813 Wo are continuing our ell'orts to dispose of the imrealisod properties as speedily as we can, without unduly sacrificing thetn. Landed property and premises stand at £423,731), an increase of £03,949 on the previous year's figures. This somewhat large increase is mainly due to the acquisition of our new premises in Collins-street, Melbourne (to which I referred last year)', and also to the purchase of a central site in Sydnev, which will enable the Bank to erect "suitable premises of its own in that city. The' opening of several new branches and agencies, and the necessity for the bettor equipment of our premises at other points in the Dominion, has entailed considerable expenditure in building opcr* tions during the year. Profit and Loss—Tho net profits for , the year, after paying the £40,000 interest on guaranteed stock and making all necessary appropriations, including provi- j sion for the Bank's annual grant to the . Provident Fund and bonus to the staff, J as well as allocating -the sum of £20,000 ] in reduction of bank premises and furniture accounts, amount to £295,270. Add- j ing the amount brought forward from « last year ( £64,134) and deducting the j amount of interim dividend of 0 per cent, \ on preference and ordinary shares paid ' in December ( £60,000) tlio'sum available ' t for distribution is £299,405—as against < £270,384 last year. The directors now ] propose to pay a further dividend of 6 i per cent, and bonus of 3 per cent, on < ordinary shares (making 15 per cent. , ■for the year) and a further 4 |>cr cent, on t preference shares (making 10 per cent, for the year). The total amount distri- i bnted to shareholders for the year will i therefore bo £125,000. Of the balance f remaining, it is proposed to transfer, as j already mentioned, £200,000 to tho Re- 1 serve Fund and to carry forward £34,405. ( The result of the year's working, and i . the increased dividend now proposed will, c I feel sure, be regarded by shareholders j as highly satisfactory. (1 GENERAL REMARKS. t In studying the facts and figures re- £ la ting to the trade -and finance of New l Zealand there are many conclusions to !1 be arrived at, and I feel constrained to s say that, in view of the figures I shall " presently quote, it would be wise, on the n part of the business community, to pur- s sue a policy of economy and caution. ? The trade returns are not as encouraging ' as one could wish, and, although 'they arc not actually disconcerting, they point to the possibility of some little stringency in J the near future. The values of the ex- s ports and imports for tho year ended t March 31 last, compared with the fig- c ures for the tliree previous years, dis- ' close the fact that, while in 1910 there ' was a big expansion in exports and a contraction in imports as compared with . e 190!), for the year just closed the growth a in exports is disappointingly small, whilst F the increase in imports is exceptionally B

lar#e. The totals (excluding specie) arc as follows: Ye-.ir ended Exports. Imports. March 31. £ £ 1908 17.8U3.84-2 17,486,421 1!I0!» 10,707,818 10,313,750 11)10 21,407,387 14,773,821 Hill -21,41)7,200 17,385,000 | It will he noted that while exports for Villi show an increase of only £29,818, imports liave increased by £2,011,24"). These figures indicate a disposition to over-importation, which, if not checked or counterbalanced by a corresponding growth in our exports, may lead to stringent financial conditions in the Dominion later on. The position suggests to the discerning the need for caution. It is out of the amount realised for our exports that we pay for the goous we import, and also provide for the annual interest on the public indebtedness of the community to the foreign money-lender. The interest charge on our debt is estimated at £3,500,000 per annum, and does not appear excessive. In the four years to March 31, 1911,, pur imports were valued at £05,939,087, and the amount due on interest during the same period was, approximately, £14,000,000. New Zealand had therefore to find a sum of £79,939,007. Our exports for the period totalled £77,596,252, so that we were £2,342,815 short of-re- . quirements.

The adverse position shown by the exports during the currant produce year commencing October last, is mainly due to the smaller amount received from the wool clip. A smaller quantity was shipped. For the seven months to April 30 last, the weight of wool exported was 152,u11,3681b5, while for the corresponding seven months of the previous season the quantity was 167,468,447 lbs, revealing a shortage of 14,857,07i)1b5. The decrease in the total value is £978,750, and arises in the smaller totals of the first four montlis of the present year. I The monthly figures are as follows: 1910-11 1909-10 £ £ October 62,780 50,969 November .... 295,099 224,426 December .... 1,127,750 887,864 January 1,065,269 1,812,679 February .... 1,181,072 1,830,658 March 975,926 1,293,488 April 480,075 601,845 £5,789,177 £0,767,927 For the three months to December there was an increase of £318,376; hut in the four months of this year there is a shrinkage of £1,295,126. Daiiy produce also shows a shortage in the lirst four months of this year, the dei rease in butter being £79,826 and in cheese £65,709—0r a total of £145,535. The unfavorable weather experienced during the season is, of course, account - I able for ihis. The dairy industry, however, <•< .itinues to make wonderful strides, : ad what has been accomplished during tut; past four years is positively amazing. Comparing the value of the exports of butter and cheese for the four years ended March 31,1907, with the four years ended March 31, 1911, we obtain the following:— 4 years to 4 years to March3l,'o7 March3l,'Hi Butter .... 5,896,037 6,255,991 Cheese .... 1,102,504 4,059,615 £6,988,541 £10,315,606 The increase of £3,317,085 is nearly 50 per cent., and shows remarkable progress. The gain, however, arises from the expansion of the cheese output, which this season has been the mainstay of the dairy industry. The prosperity of the dairy farmers of New Zealand has been long-continued, but, in the natural order of things, a set-back may reasonably be expected. In this connection, 1 am still of opinion that the prices of' dairy land are maintained at too high a level. New Zealand butter suffered severely from the competition of the Australian product during the season now closing, and the bad effects were increased by complaints as to the quality of our product. K«en competition may be expected during the next season, especially from Australia, where the climatic conditions appear favorable for another large output.

Including native lands, there is yet a considerable amount of country in this Dominion to be bright into profitable use. In the northern parts of New Zealand there are great areas of gum lands, hitherto regarded as worthless, but which are now proving valuable owing to the fact that the fodder plant, paspalum, grows freely and luxuriantly on such land. With inis land laid down in paspalum, thousands of dairy cattle could be depastured. We may thus confidently look forward to a considerable expansion of the dairy industry* The exports of frozen meat have increased this season, partly because the adverse climatic conditions forced the stock into the slaughter yards of the various freezing companies. The meat trade lias engaged a good deal of attention owing to various reports as to the intentions of the notorious American Beef Trust. So far as New Zealand is concerned, there is, I think, nothing to fear from the Trust, for there is no room for it here. In point of fact, in seems to me that so long as the railways in this Dominion are owned by the State, it would be quite impossible for the Trust to capture the meat trade. Nor does it seem likely that the Trust will accomplish much in Australia.

I During the past twelve months the world-wide shortage of beef has been accentuated, and the people of continental Europe have demanded the right to obtain supplies from outside sources. Fairly large quantities of Argentine beef have been marketed in Italy, Austria and Switzerland, and the extension of the market in this direction is inevitable, although it is likely to be a slow matter. New Zealand is bound to derive an in- | direct benefit. There is also some slight chance of the American tariff on wool | being lowered. If this is realised, it will mean that the values of certain classes of wool favored by the Americans will advance sharply and remain at a comparatively high level. Turning to the monetary situation ■there is no doubt that an abundance of money w available in New Zealand. The scope of its employment, however is restricted. Any industrial enterprise likely to require much labor is not viewed as a good proposition. Capitalists are unquestionably nervous at the attitude ot Labor, and this is to be deplored, for it must be patent that, unless there be exhibited a spirit of greater harmony between Labor and Capital, no quickening of industrial activity can be looked for I have the conviction that, if employers and employees exhibited a genuine desire to work amicably together with a mutual regard for the just interests of each other, industries which are at pres"nt in a languishing condition would s;» mg into remvigorated life and prosperthe State " CSSent ' al '" the interests of J!»ii St , the %Um l have P ,aced Wore you emphasise, in my opinion, the neces«ty for a policy of economy and caution, the immediate outlook is, speaking oniUy, by „ 0 means unsatisfactory. Allugh there are strong indications that ™ P « J™ Wi " yl ' o,li a ""»"«* return than the previous one, the difference will »ot be great enough to create pranfae. to he one of low prices for comwoditics. Already in the United States

there has been a decline in values of 25 per cent., and in England and elsewhere the tendency has been downwards. ft is probable, therefore, that our products will yield a smaller monetary return; but there should be an appreciable expansion in the volume of the output which should compensate for any fall in values. Trade and commerce the world over appear to be good and money is everywhere reasonably cheap. The expenditure of the huge sums borrowed in London, Paris and Berlin by foreign Governments, municipalities and joint stock companies during the past twelve or eighteen months must keep trade active; but above all, so far as New Zealand is concerned, it is the trade activitv of the United Kingdom that is of the greatest interest. British trade has been expanding steauiiy and the records of unemployment show that fewer people have been out of work. JSo long as British trade is good, the prospects of New Zealand remain bright and promising. Mr. Beaucnamp also reviewed the history of the Bank.