THE Wairarapa Age MORNING DAILY. THURSDAY, DECEMBER 5, 1912. BANK OF NEW ZEALAND.

Wairarapa Age, Volume XXXI, Issue 10713, 5 December 1912, Page 4

THE Wairarapa Age MORNING DAILY. THURSDAY, DECEMBER 5, 1912. BANK OF NEW ZEALAND.

The speech delivered by the Chairman of Directors of the Bank of NewZealand at the annual meeting of shareholders is remarkable for two things: First, the pessimism displayed concerning the financial outlook of the Dominion; and second, the facility with which the interest of the State in the institution is dismissed. In regard to the state of the finances in the Dominion, there is little doubt that a stringency is being experienced. The causes that have contributed to this stringency are not clearly outlined by Mr Martin Kennedy. The bold statement is made that "there are not wanting indications than even greater degree of stringency may b« ahead." What are those indications? Is the Dominion dependent entirely upon the loan moneys of the Government? Tf it is, then the outlook is by no means reassuring, for the prospects of procuring money on anything like reasonable terms are decidedly blue. Tn face of the fact, however, that the primary industries of the Dominion are in an exceedingly prosperous condition; that a bountiful season is in | store; and that prices for produce have never been higher, one cannot but regard the pessimism of Mr Kennedy with surprise. Wo should like some clear indication of the special conditions which are likely to make the stringency more- acute in the future. The Balkan crisis is practically over, and there seem,s to be no immediate cause for anxiety concerning tho international issue that threatened the peace of the world a. few weeks back. With tho crisis past, is there not reason to Jjope that the price of money at Homo will have an immediate tendency to recede? But assuming that the worst comes to the worst, and loans for internal development are not at once forthcoming, hare we> not sufficient wealth , in the Dominion to cna:T>Jo ws to curry

on? The Directors of the Hank think, apparently, that wo liavo not, f tlioy propose to seek power to increase their [capital by €1,000,000. On the other hand, we find the Commercial Bank of Australia, which is one of the strongest institutions in the Southern Homisphere, anxious to open business in the Dominion. So far as the relationship of the .State to the Bank of New Zealand is concerned, thiy is a matter that requires mimed into u,ttoiit:'jon. Why) sh.ou-d the State retain a largo financial interest in tin's institution and have to pay through tho nose tor money in the London market? Allo-wing that 10 per cent, is being paid on the Government's ftjraference shares, this does not justify tho locking up of capital that is urgently required for other purposes. The time hag come when tho State should either take over the Bank entirely, or sever its connection with tho institution. The would probably favour tit.-.* latter course, .seeing that the Bank lias weathered the storm, and

is now in a strong financial position. It poems likely that the whole position .will be brought -under the purview' of Parliament at the next session, and wo may therefore expect that the future policy in regard to tho Bank will be carefully scrutinised. Meanwhile, we feel it a duty to compliment the Directors of the

Bank of New Zealand upon the ■.splendid achievements of the institution during tho last few years.