BANK OF NEW ZEALAND.

Taranaki Daily News, 23 June 1917, Page 6

BANK OF NEW ZEALAND.

- AOTUAL REFORI, r CHAIRMAN'S INTERESTING OBSERVATIONS, jj, The ordinary general meeting of the proprietors of the Bank of New Zealand was held at the Head Office on Friday, June 22, 1917. Mr. H. Beauchamp, chairman of directors, presided. With the consent of the meeting, the report of the directors and the balance sheet were taken as read. # The Chairman, in moving their adoption, said:— The report and balance sheet naying been in your .hands for some days, the result of the'year's working is known to you. The bank, lam pleased to say, has had a very satisfactory year. Some of the principal items in the balance sheet exhibit considerable fluctuation compared with the figures of twelve months ago, and, in accordance with our usual custom, I will now refer briefly to these. . Capita].—There is no change in the capital of the bank. The reserve fund, after the addition of £72,858 12s 9d which the board proposes to make from the year's profits, will stand/at £2,135,000. With the sum proposed to be carried forward, namely, £111,595, the reserve fund and undivided profits will amount to £2 246 595. Notes in Circulation (£2,560,325). To meet the currency requirements of the public and the military forces, a considerable expansion in our note circulation has taken place, the increase for the year being £697,502. An emergency issue of ten shilling notes was made by the bank in August last to taW the place of half-sovereigns, supplies of which could not be obtained. The issue has been of great service to thepublic, but the quality of the paper and the style of the note are not altogether satisfactory, and we hope shortly to be able to replace the issue with a note of a more suitable description. Deposits (£29,052,790), which include free, fixed and Government,deposits, exhibit an increase of £5,496,114 on the | previous year's figures. I make special reference to this movement in another portion of my address. Bills payable and other liabilities now stand at £2,007,968, an increase of £240,559 on the figures at March 31, 1016. • t , „ Coin, bullion, money at short call, etc.—Coin and casht balances are more by £421,357, and now stand at £5,914,979. Bullion (£119,562) is more by £38,909, and Government notes (£159,331) are less by £24,222, as compared with the figures of a year ago. Notes of other banks (legal tender)—£4sl,fas_is a new item, representing the bank's holding of other bank notes at March 31 in connection with settlement of exchanges. The increase in our cash reserves 19 a' natural movement in view of our larger deposit liabilities and our increased note circulation.'

- Money at call «md short notice, Government securities and other securities in London, stand at £11,476,002—an increase of £2,746,027 for the year The funds received by the bank in London in connection with" the sale of the Dominion's produce have been in excess of the amounts required for the financing of imports to New Zealand and to meet drawings from this end, and, moreover, owing to prompt payment by the Imperial Government un» der the commandeering scheme, have come to account in London much earli-' er than under ordinary circumstances would have been the case. I may repeat what I said last year, that our surplus funds in London are profitably employed, principally by investment in short-dated British Government securities, and are readily available to'us when required. The totals under this heading, together, with the amount of hills receivable and investments in the Dominion, are, I may mention, equal to 65.68 per cent. (or 13s Id in the £) of the total liabilities of the bank to the publio

DEPRECIATION IN INVESTMENTS. Full provision has been made for depreciation in London investments, which have been written down to their market valued March 31 last. Bills receivable, in London and m transit (£672,147), exhibit a reduction of £2,907,928 on the figures of twelve months ago. , , The main products of the Dominion have been purchased by the New Zealand Government on behalf of the Imperial authorities. No bills were drawn in connection with this produce—hence the reduction in the amount of our bills receivable. ' _ . . . , Investments in the Dominion stand at £3,289,111, an increase of £1,925,911, due to the taking up of £2,000,000 of the Dominion's 1916 War Loan. I Advances.—Bills discounted (£1,256,7211 show an increase of £97,085, and ! oth* advances (£14>489,763) an increase of £8,804,634 as compared with the figures of twelve months ago. The large increase & advances is partly caused by the tetnporary assistance which we have given to meat companies and others in connection with produce commandeered by the Imperial Government; but not yet paid for, and partly by the generally increased demand for'emended accommodation consequent upon existing trade conditions. The restriction of shipping owing to the submarine menace—to which I refer more fully in another portion of my address—"has delayed the shipment of produce to a very considerable extent; but as ( our foodstuffs are needed in Great Britain, we may look for every effort being made "to supply additional shipping with as little delay as possible. Meantime, pending shipment of the produce and payment therefor by the Imperial Government, we are supporting the Dominion's industries, in the emergency that has arisen, to the fullest extent consistent with safety. Landed property, premises, etc., after the appropriation of £50,000 made from profits, stand at £450,812, as compared with £441,866 at March 31, 1916. I may mention that during the year the opportunity occurred of acquiring tlie property adjoining our head office premises in Lambton Quay. The board had previously had under consideration the question of enlargement of our present building by the addition of another story, but had deferred the work until conclusion of the war. The advantage, however, of obtaining additional frontage to Lambton Quay, and a building which could be easily adapted to our requirements, was so obvious that the board decided to make the purchase in •reference to proceeding with the original plan for the erection of another story. In addition to this outlay there have been, of course, some necessary alterations to existing premises, and in a few cases the erection of new buildings, which had to be undertaken to iueet the requirements of our business. vThese transaction* explain why the ap'rt»pri»ti<m of £50,000 to. the writing jJgta^jHttpu**.account &** a ** M *

suited in the account showing rectus tion.

Profit and Loss.—The net profits for the year, after payiug interest on guaranteed stock and making all necessary appropriations, including provision for the bank's annual grant to the provident fund (in addition to a special donation of £25,000 to the fund) as well as a bonus to the staff, and the allocation of £50,000 in reduction of bank premises and furniture accounts, amount to £365,439. as compared with £285,800 at March 31, 1916. This improved result is largely due to the much smaller appropriation required this year for depreciation of our investments in London. Adding the amount brought forward from last year (£56,404), and deducting the amount of interim dividend at 6 per cent, paid in December (£105,000), the sum available for distribution is £!i1(i,951. The directors now propose 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 distribution to shareholders will therefore amount to £237,500 for the year. Of the balance remaining, it is proposed to transfer £72,858 to the reserve fund, and to carry forward £111,595. The amount to be carried forward, you will observe, is considerably larger than usual. In view of the uncertainties regarding taxation, the board considered it advisable to retain a substantial portion of the year's profits in this form. I may mention that "rates and taxes" for the year under review amounted to £198,051, an increase of £60,955 as compared with the previous year—mainly due to note tax on our larger circulation, and to increased income taxes v HOARD OF DIRECTORS. Mr. J. H. Upton and myself were the retiring Government nominees at March 31 last, and we have been re-ap-pointed for another term. Mr. R. "W. Kane announced, at the half-yearly meeting in December last, that he would be a candidate for the vacancy in the shareholders' representation occasioned by the death of Mr. Martin Kennedy. He gave due notice of his candidature, and, as no other nominations were received, he became your elected director. I have now pleasure in declaring him duly elected. I congratulate shareholders upon having secured so efficient a, representative. LONDON BOARD. The constitution of the London Board remains the same, and the responsibilities devolving upon it are no less onerous now than they were at the opening of the war. Our London business, during the troubled war years, has been conducted with foresight and judgment, and it gives us pleasure to express our appreciation of the services of those who havejlirected and controlled our operathere throughout t]je trying period. EXPORTS AND IMPORTS The prosperity in the Dominion, to which 1 referred a year ago, continues, and is fully reflected in the abnormal excess of exports over imprts. Taking the produce year, which ends on September 30, the exports and imports (exclusive of specie) for the past five vp.ars show the following movements: — YearVEnded • Excess of

Sent. 30. Exports. Imports Exports. -■£ £ £ ~ 1911-12 20,714,595 19.615.29 i 1,099.304 1912-13 23.682,416 22.568.354 814.062 1913-14 23.759.347 21,056.384 2.702.963 1914-15 29,710434 19,788.224 9,924,210 1915-16 34,926,541 23,791,152 11,135,389 In the past two produce years the excess of exports over imports has exceeded £21,000,000, or . approxiniatelv £2l per head.

In addition to this source olTevenue, we have the exceptional expenditure of the Government for war purposes. The cost of the war to New Zealand is stated to be about a million sterling per month, and a substantial portion of this is spent within the Dominion. Hence we find that every one is more or less' prosperous, and the working classes have nothing to complain of in this respect, for they are reviving full war wages.

It is instructive to examine the Dominion's trade figures from another point, and for this purpose I take the exports and imports (exclusive of specie in both cases) for each of the past five calendar years. The figures are:— Calendar Excess of Year.> Exports, Import?. Exports. £ £ £ 1912 21,511,62(5 20,576,5<a 935,047 1913 22.810.363 21,653,632 1,156,731 1914 26,253.925 21,144,227 5,109,698 1915 31,430,822 20,658,720 10,772,102 1916 33,281,057 25,045,403 8,§35,654 It will be noted that the excess of exports for 1916 is less by about £2,500,000 than the excess shown in the previous year. This is due to the very large increase in the imports, and to the only moderate expansion of the exports. Since the turn of the year, the exports show a substantial decrease. The figures for the March quarters amply demonstrate this, viz.:— March Excess of Quarter. Exports. Imports. Exports. £ £ £ 1916 .... 13,242,584 5,637,456 7,605,128 1917 .... 10,495,737 6,017,771 4,477,966 The exports exhibit a shrinkage of £2,746,847, while the imports show an increase of only £380,315. The decline in the exports is probably wholly attributable to transport difficulties. The produce is available for shipment, and the Dominion could. I have no doubt, fnrnisli full cargoes for forty ocean carriers at the present moment, if the vessels were available.

THE SHIPPING PROBLEM. The shipping problem is tlifc greatest difficulty we have immediately to face. I need not tell you that tlie trouble arises because of the indiscriminate and unrestricted use of submarines by the Germans, in violation of all the laws of naval warfare. Several of the vessels well known in New Zealand waters have fallen victims to German U boats, notably the Rotorua and the Otaki, while the weekly shipping losses of the Allies and neutrals total up a formidable tonnage. Ruthless submarining, which has brought America to the assistance of the Allies, was begun on February 1, and the Teutons calculated on sinking 1,000,000 tons per month. As far as can be ascertained from unofficial figures, at no time since February 1 have the Germans succeeded in their efforts, although a considerable tonnage has been lost. The net decrease in the world's merchant tonnage in 1916 is estimated to have been only 200,000 tons, losses occasioned by the war and by other means having been nearly made good by new construction. The loss of tonnage has been greater since, but against this must be put the fact that the entry of the United States and Brazil into the war has made available about 900.000 tons of German shipping that was lying idle. Furthermore, most of the shipyards in the Allied countries, including Japan, are working at high pressure building merchant vessels, and it is reasonable

to suppose that the losses through submarining will to a very large extent be made good. We have also to bear in mind that the greatest scientists and naval experts in the Allied countries are focussing their attention on devising means for dealing with submarines, and, at any moment, we may learn that an effective method has been discovered. In the meanwhile, all must suffer, and New Zealand perhaps to a greater extent than others.

The matter of supreme importance at the moment is to supply Britain, France and Italy with foodstuffs and munitions. These can obviously be most expeditiously supplied by the countries nearest at hand which are able to produce them. For this reason, vessels engaged on long distance voyages are being withdrawn, wherever possible, and placed on the shorter routes. We shall, therefore, probably continue for a time to experience difficulty in exporting and importing. This will, of course, cause a material reduction in our trade figures, and react upon us in other ways. We have also to consider the probable effect on primary industries or a continuance of the present shortage ofshipping facilities. We cannot pile up perishable produce in cold stores indefinitely, because there is a limit to the storage capacity; and moreover, longstored produce has a tendency to deteriorate. This constitutes a serious and perplexing problem. The best minds in the country are, however, grappling with it, and everything that it may _ be possible to do to relieve the situation will certainly be done. While on the subject of shipping, it may not be out of place to refer to the sale of the Union Steamship Company of New Zealand, Limited, to the Peninsula and Oriental Steam Navigation Company, Limited. The "Red Funnel" line lias taken such an important part in developing our coastal, intercolonial and overseas trade that, on sentimental grounds if on no other, one cannot help expressing regret that its control should have ptesed from a New Zealand to a British company. The fusion, however, is only in accordance with the trend of British-owned shipping, which is uniting its strength with the object, no doubt, of successfuly competing after the war with the German-owned steamship lines so liberally subsidised by the German Government.

IMPERIAL PURCHASES Not only nave high prices been ruling for produce, but our farmers have escaped all marketing worries, for the Imperial Government, as I have already mentioned, has commandeered most of our produce, and has paid full prices for all taken. It is interesting, tor purposes of record, to 6tate the volume of the transactions in this respect. From the commencement of the commandeer, up to Saturday, June 2, 1917, the Imperial Supplies Department in New Zealand had paid to producers the huge sum of £32,621,599, made up as follows:

Frozen meat (from March 3. 1915) 17.006.328 Cheese (from November 4, j 1915) b.0z2,u86 Wool (from December X, ! 1916) 10.8U7.9491 Scheelite (from September " ! 20, 1915) ...'. vM7BI Sheepskins (from February 5, 1917) i 139,068 Hides (from March 19,1917) 118,193 SJipe wool (from March 31, 1917) 817,194 Other items 136,303 £32,621,599 Besides the products actually mentioned the Imperial Government has control of the markets for butter, hemp, tallow, wheat, sugar, metals, etc.; indeed, it may be safely said that practically all commercial products are now under control. THE COST OF LIVlNtt Tie cost of living is steadily rising and is pressing with unusual severity upon those with limited salaries. The purchasing power of the sovereign now, as compared with 1914, is greatly reduced. The New Zealand Government has taken steps to meet the difficulty, and has succeeded to some "extent. For instance, sugar is cheaper in New Zealand than perhaps anywhere else in the world, and this is due to, the reasonable spirit in which the Colonial Sugar Refining Company—practically our sole supplier—met the Government on the question of supplies and prices. The increased cost of living is a subject upon which we have heard a good deal since the commencement of this world-wide war, but there appears to be considerable misconception, especially in this Dominion, with regard to the causes of it. Many people seem to think that prices of commodities have been, raised by wholesale and retail merchants, through combination or otherwise, for purposes of profit a,nd without any justification. In this connection one has to remember that in respect of many articles we use and consume, we are dependent upon supplies from overseas. Now, the majority of these lines have enhanced enormously in price at port of shipment, and, before reaching this country, there have to be added thereto freight (calculated at not less than three times the rate ruling before the war), war risk at from £1 Is to £lO per cent., higher rates of exchange and duty, and other charges. In support of the statement as to enhancement in prime cost, a table published in the Economist of April 7, 1917, dealing with many essential commodities, shows that, starting with a basis rate of 100 per cent, as an average in 1901-5, the percentage figure has risen during the v ar from 116.6 to 240.9. As regards Few Zealand produce and goods manufactured in this country, it must be borne in mind that prices of the former are largely, if not wholly, determined by the values ruling in London, or in the other markets to which our produce may be consigned, or by the prices paid by our Government on behalf of the Imperial Government—whilst the loiter are affected by increase in cost of raw materials, higher wages, etc. Faced with these,facts, it must be apparent that it is quite useless for a section of the community to urge the Government, as was done recently, to take steps to force traders and producers to sell at pre-war prices. In most cases, it would be, for the reasons stated, an utter impossibility to do so. Whilst much prominence has been given to this question of increase in the cost of living, we rarely, if ever, see a suggestion that, to meet the additional burdens that are being cast on us by the war, there should be any reduction in the standard of living. If the "standard" were modified to meet the altered conditions, people could face the increased cost of living with much greater equanimity and without undue hardship to themselves.

NATIONAL ECONOMY, In spite of the increased cost of living and other seeming handicaps, the spending power of the community appears to be in no way restricted. The need for national economy is being constantly proclaimed, but, unfortunately, to all appearances is being, as constantly, largely ignored. Extravagance is rife, and the lavish expenditure which is being made on dress and pleasure nt the present time is, to say the least of it, very regrettable. I attribute it to the fact that the baleful effects of the war have hardlv

reached our shores; that so far the consequence upon us, financially, has been entirely.beneficial—the prices of our primary products having been forced, by war conditions, up to levels never before dreamt of —and that, with this unexampled prosperity surrounding them, the majority of our people are prone to close their eyes to the grim and portentous happenings on the other side of the world. With all the requisites 01 self-indul-gerico lying ready to our hands, it requires tho exercise of some restraint to be other than self-indulgent. But the time has come for a halt, and for taking serious stock of the position. The demand for a more economical code of living in all parts of the British Empire is becoming clearer and more insistent ,iind I apprehend that, if the war continue, the call for greater economy in the national outlay will ere long be proclaimed in ways that will necessitate a more genuine response than has so far been given to the appeal.

GROWTH OF DEPOSITS. 'Hie financial position within the Dominion is a strong and improving one. A comparison of the bank deposits for the March quarter with those for the corresponding quarter of 1916 (including Government deposits) shows. the following movements: — March, 1916. March, 1917. Increase. £, f- & Govt. Deposits--4,855,939 7,357,119 2,501,180 Free Deposits—--19,091,949 20,970,70*' 1,878,753 Fixed Deposil. 12,182,104 13,385,838 1,203,734 I £36,129,992 £41,713,659 £5,583,667 The greatest increase is in Government deposits, due no doubt to the incoming of local loan moneys and to the ingathering of the war taxes imposed under the Finance Act, 1916. The growth in the fixed and free deposits is over three millions sterling. These movements evidence the increased prosperity of the country for the time being, for the Government deposits, as well as the ordinary deposits, are provided from the earnings of the people. A better view of the deposit position is obtained by comparing the free and fixed deposits for the March quarters of the last four years. The figures are:— March Free Fixetf quarter. Deposit' Depositi Totals. £ £ £ 1911 13,475,771 10,554,479 24,030,250 1915 15,958,732 10,870,507 26,829,239 1916 19,091,949 12,182,104 31,274,053 1917 20,970,702 13,385,838 34,356,540 The increases during the past three years have been exceptionally large. The increase shown in 1915 over 1914 was £2,798,989; the increase in 1916 over the pre-war year jumped to £7,243.803, and in 1917 to £10,326,290. The total of £34,356,540 is the largest volume of i deposits ever "before held by the New I Zealand banks. The Post Office Savings Bank figures also show an expansion. I There is unquestionably a great deal of loanable credit in the Dominion, and, I in view of the probable early issue of j another New Zealand AVar Loan, the I financial position, as revealed by the j banking returns is very encouraging. THE FUNDING WAR LOAN I The Acting-Minister of Finance *•>*' | already warned the country that the Government will issue another war loan I as soon as the necessary authority is obtained from Parliament. Having regard to the heavy strain on the financial resources of the Mother Country, it seems to me to be onty right that wc should endeavour, within the limits of our resources, to finance our own war expenditure. The objects of tlve loan must appeal to the patriotism of every section of the community. Much of the money raised will be disbursed in the Dominion, and a substantial portion will go towards the support of soldiers' relatives living here among us. We must, therefore, as loyal subjects of the Empire, and as good citizens of New Zealand, be in favour of the loan, and accoid it our sympathy and support. The financial position of the country, to which I have just referred, is such that there can be no doubt of our ability to provide what is necessary. The Earl of Derby, British Minister for War, speaking on the Britisli "Victory" War Loan, stressed the point again and again that the three things neoessary to bring the war to a speedy and satisfactory conclusion -are—money, men, and munitions; and he further specially emphasised that those necessaries are required in the order in which they are stated—money being the first and greatest essential. 1 am sure, if the people of this country can be brought to realise that fact, the fate of our own "Victory" War Loan will not be in doubt, and it would be gratifying if it were crowned with a success proportionately as great as that which attended the "Victory" Loan of the Imperial Government, to which over £1,000,000,000 were subscribed—an amount exceeding the Britisli Treasurer's most sangujne estimate by about 50 per cent. Here is a way in which those of us who are incapable of bearing arms, and enduring the fatigues and hardships of warfare, can contribute an essential to viotory, and do our part 'towards the achievement of the indispensable end in the only way possible for us

AGRICULTURAL OUTLOOK ine siioivnge oi labour is likely to bo keenly felt next harvest, unless the available man power— and also the woman power—of the country are organised. It is imperative that the country should produce more foodstuffs, and if all the available land is put into cultivation (including cottage gardens) we should have more than sufficient to meet our requirements. It is particularly essential that we should grow more cereals, as the present war has emphasised tile importance of every country being, as far as practicable, self-sup-porting as regards food supplies. Efforts are being made to overcome the shortage of breadstuffs, and farmers are being encouraged to substantially increase their wheat acreages, under a price guarantee which should leave the growers with a reasonable profit, allowing for the increased cost of production. Farmers in New Zealand have always exhibited a praiseworthy patriotic spirit, and I have no doubt the appeal of the Government to produce more cereals will meet with a hearty response, particularly as cereals are foodstuffs which suffer least of all by prolonged holding. LONDON MONEx MARKET j Following upon the successful issue' of the British war loan, came a temporary "slump" in the value of London money. The Bank of England reduced its rate to 5 per cent., and London discount houses to 4J per cent. The rate lor day-to-day money fell as low as, 2J per cent.; lending stes dropped all round, and prices of investment 6tocks advanced in sympathy. This was due to the fact that the loan subscriptions placed the British Government in a position to redeem all maturing Treasury bills, and thus a large amount of money was thrown upon the market seeking investment. Many of the British banks had borrowed heavily from the Bank of England to put themselves in a position to finance their customers' subscriptions to the war loan, and, as these advuAr' by the Bank of Eng-

land were fixed for a term, they could not be immediately repaid. It is, however, not to be expected that tins position wil last long, though there is no reason to anticipate a-return to really dear London money in the near future.

WAR FINANCE. The advent of America into the war zone will appreciably ease the financial strain on Britain, for it is the intention of President Wilson to assist the Allies financially, and already England, France, and Italy have been handed substantial cheques, and Russia is si.'so receiving: help. The huge "Victory' 7 Loan issued by the British Government, and which, as I bnve aheady said, was a remarkable success, was insufficient to meet requirements, and limited issues of Treasury bills (by tender), having currencies up to twelve months, were resumed late in March. The '.. sue of "> per cent, exchequer bonds, repayable April 1, 1922, or on October 1. 1919, if desired by the holder, was also begun early in April, and still continues. Some of the belligerents are not finding it easy to raise money, and novel expedients are being resorted to. The Italian Government allowed subscribers to their 5 per cent, loan, issued it 80, to pay subscriptions in French rentes and French Treasury bills. The French Government has evolved a ne>v form of Treasury bond with a currency of five years from dato of issue. Interest is at the rate of 5 per cent, payable lialfyearly in advance. After twelve months have elapsed the holder may demand the money, provided he, consents to forfeit three months' interest. If the investor retain thi« security for the full term of five years, ho receives a bonus of 2} per cent. While on the suDjert; or loins, I may mention tlu.t in April tl'c Government of the Commonwealth of Australia issued a pnbli; works loan in London for £3,500,000. The rate of interest was 5J per cent., the price of issue LK per cent., and the currency of the bends 5-10 years. Debentures of the loan are convertible into 5} per cent, registered stock a.t any tinin up to June 30, 1917. The issue is reported to have been very successful, the underwriters being entirely relieved of their responsibility for full subscription.

THE SCOURGE OP WAR. ralnce I addressed you last year, the number of belligerents in the great world-war has increased. Fortunately the accessions have all been to the side of the Allies. The United States of America, is the principal recruit, and the most recent are the Republics of Honduras and Nicaragua. The Central Powers are still fighting with vigour, and their resources, in men and munitions do not appear to be yet approaching the point of exhaustion, hut the economic situation is to them no doubt almost intolerable, and the shortage of food must be serious. Nevertheless, their fighting spirit shows little or no decline.

Through the unlocked for revolution in Russia, and the utter disorganisation that immediately followed throughout that Empire, the Allies have lost the support—temporarily nt least—of a Power from which so much was expected in the offensive that is now taking place. Moreover, the quiescent state of affairs on the Russian front has enabled the Germans to withdraw largo bodies of soldiers for employment against the French and British "in France. It seems to me that it will tax to. the utmost the ability, energy and resources of the pro-Ally politicians in Russia to evolve order out of chaos, and placo the army on such a footing as will make it again a formidable force in this gargantuan struggle. In the circumstances, it seems unlikely that the war can be brought to n close this year, but I make no prediction, for I am in no hotter position than you arc to venture a. forecast. Nothing that has been predicted in this war has happened exactly as foretold, and even those best informed hesitate to express any decided opinions with regard to its duration. An early termination is very desirable from a. New Zealand standpoint for, if it be prolonged, it must have very serious economic efl'eots in the Dominion. We have very nearly exhausted the number of men of military age in the First Division, and must soon be calling upon those in the Second Division. When this happens there is bound to be a fcrious dislocation of the labour market, and many industries must be affected. It is imperative, that wo should face this mattor squarely and not content ourselves with mere hopes or valueless opinions. The British Empire is determined upon victory, and we must do our share towards that end, whatever sacrifice may be involved. The one great ray of hope in the troubled prospect is the help that the. United States of Amorica. is able and willing to give. The Americans have heen slow to move, but, now that they have begun, their efforts are increasing in momentum, and the Allies are assured of the fullest support that America can afford. There can be, and there must be, no premature peace. Such a peace would be dearly bought. It would be but an armed truce, with no relief from militarism —the spectre which has haunted European civilisation for' the past 40 years.

When the American Republic, now our close ally in this war, was itself in the throes of that terrible conflict bptween its northern and southern States which ended in the emancipation of the negro and the abolition of slavery, tlio then President of the Republic, the great Abraham Lincoln, urged upon the Northern States the continuance of the struggle for right in the following memorable words:—"Fondly do we hope, fervently do we pray," that this mighty scourge of war may Speedily pass away. Yet. if God wills that it continue until all the wealth piled by the bondsman's two hundred and fifty years of unrequited toil shall be sunk, and until every drop of blood drawn with the lash shall be paid by another drawn by the sword, as was said three thousand years ago. so still it must be said that 'The judgments of the Lord are true and righteous altogether.' With malice towards none, with charity for all, with firmness in; tho right as God gives us to see the right, let us finish the work we are in, to bind up the nation's wounds, to cave for him who shall have borne the battle, and for his widow and his orphans, to do all which may achieve and cherish a just and lasting peace among ourselves and with all nations,"

This exhortation I repeat to-day, because it is equally applicable to the conflict in which the great nation to which it was first addressed lias now mad© common cause with us, for this is a fight for freedom—a fight for the emancipation, not of a section of the human race, but of the whole human race, from thp wretched thraldom of mi'liitary despotism.

1 now beg to move that the report and balance-sheet be adopted. The report and balance-sheet were adopted.

A discussion took place on the question of increasing the remuneration nf directors and'the chairman, and it was pointed out that that question was fixed t>y statute. Eventually it was decided, if practicable to do bo, that Mr. H. Beauehamp's servloo to the bank should be rewarded in a manner that the board should decide, the amount not to exceed £SOO.