The Daily News. MUNDAY, JUNE 20, 1921. BANK OF NEW ZEALAND.

Taranaki Daily News, 20 June 1921, Page 4

The Daily News. MUNDAY, JUNE 20, 1921. BANK OF NEW ZEALAND.

Owing to the. State's financial interest in the Bank of New Zealand, considerable interest is always taken by the public in the annual statements, which disclose the bank’s operations and financial position. There are reasons why the balance-sheet for last year, as presented to the meeting on Friday last, should be the subject of greater interest than usual, owing to the peculiar conditions which characterised trade, commerce and finance during that period, and to the re-arrangement, of the bank’s capital. In considering the very successful results of the year’s working, it has to be borne in mind that it is in times of financial stringency that the banks have the opportunity of making large profits, as they command the situation. The outstanding feature, however, is that with a contributed capital of only a little over two millions and threequarters (excluding the million and a quarter transferred from the reserve fund to capital account) the assets are set down at over forty-nine millions and threequarters. As a striking example of what can be done by utilising other people’s money the figures are unique. For the use of slightly less than four and three-quar-ter millions of bank notes (a decrease of over a million as compared with the previous year), the bank paid the Government by way of tax the modest sum of £152,538, and a correspondingly modest sum was paid to those whose deposit! at the end of the year amounted to nearly 34) millions. It will readily be seen how small a part the shareholders’ money plays in the business of the bank, the success of which depends on making the best possible use of the depositors' money, the note issue and bills payable. So far as the ordinary shareholders are concerned, last year saw the end of their liability by the payment of the balance of the call of £3 6s 8d per share, which produced £152,546, and was subsidised by a transfer of £750,000, thus bringing up each share to the fully paid up mark of £lO, which was subdivided into- ten shares of £1 each, on which no further liability exists. It would seem that the gross profit for the year amounted to £848,455, which may well be considered as a gratifying yield for a contributed capital of millions, especially in view of the fact that rates and taxes paid amounted to £485,095, that bonuses to the staff exceeded £60,000, and 10 per cent, was added to the bank’s pensioners receiving less than £350 a year, and to certain widows and other dependents of deceased officers. The sixtieth anniversary of the hank finds the institution in a position of great strength and prosperity, and the shareholders may well feel pleased at the progress the bank has made, and at the return they are obtaining for their investments therein, and the directors deserve credit for placing the bank on such a sound, footing. With the backing of the Government and all its financial business the confidence of the public has been secured, while the ,cautious and safe policy adopted ensures continued prosperity. At the same time the, results achieved give point to the contention that had the Government taken over the bank at the time of the crisis it would have been a far greater benefit to the .country -than is the case at present, though this in no way detracts from the credit due to those who have nursed the Bank of New Zealand so carefully and efficiently.

Possibly no particular Minister can be blamed; yet there is no question tliat the Finance Department, instead of doing its utmost to assist the borough in every possible way in this provision of electric current, has placed obstacles in the way that have now put a stop to the work other than tliat for which contracts have been entered into. Had not the Department in the first place held up the issue of the license, and subsequently refused to sanction the payment of the then ruling rate of interest for such security, there is. every reason to believe that the money required could ha ye been raised at a reasonable rate. The result of the unjustifiable delay is now painfully in evidence: The money cannot he obtained. It was thought that when, to overcome the rise in interest, the ratepayers sanctioned the raising of the £60,600 on the best terms the council could arrange, and with the backing of the Government guarantee, that the prospect of obtaining the loan was good. Once more the Department steps ip and demands that before the Government guarantee is given the loan currency should be extended to thirtythree years, and to this the council cannot agree, for reasons which need not be entered into here. The raising of the balance of the £72,000 loan is in an even worse position, the Bank of New Zealand advising that the debentures can at present, only be disposed of on a seven and a half per cent, yield basis, so that the borough would only obtain £B5 for every £lOO debenture sold. Such a sacrifice is out of the question It may justly be asserted that there is no project that has a greater claim in the Dominion on the support and assistance of the Government than the New Plymouth hydro-etectrie scheme, yet the present hold-up is mainly due to the tactics of the Department. Moreover, the work is to form part of the national scheme when the latter is sufficiently advanced for linking up. Another reason why the Government should help is because the closing down of the works will add to the present unemployment, besides the loss consequent on deterioration and subsequent restoration of works that have already cost close upon £90,000. So far the only step taken by the council is to authorise the general manager to see whether it is possible to obtain the £60,000 in the Dominion, and at what rate. If half a million can be raised in a few days for .% co-operative concern, surely the security that the borough can pledge should attract investors readily at a rate less than offered by the cooperative concern if the Government did not block such a method. The matter is of such Vital importance that all possible avenues should be Exploited in order to carry out the work.