22 DECEMBER 1939, Page 32



IN the absence of the chairman, Mr. Fred Hoar, through indisposi- tion, his speech was read by the general manager, Mr. T. R. Chandler, F.I.A., at the ninety-second annual general meeting held at the Chartered Insurance Institute, 20, Aldermanbury, E.C.2, on December 21st. He said that having regard to the unsettled condi- tions which had prevailed throughout the year, culminating in the outbreak of war on September 3rd, the statement which the direc-

tors subm:tted was not unsatisfactory. The assets had increased during the year by nearly three-quarters of a million, and it was possible, after paying the usual rates of interest on all investments, to add the substantial sum of £15o,000 to the Reserves, increasing the ratio of Reserves to Assets from 4.57 to 4.87.


The amount advanced on mortgage, £4,603,404, was less than for several years past—in fact, the figure was the lowest since 1933. The rapid expansion of the past few years could not be expected to continue indefinitely, and an increase in mortgage assets of £700,000 could not be regarded as other than satisfactory. Losses on realisation represented less than fourpence per cent. of the mortgage assets at the end of the year.

In July last the directors had announced that a rebate of interest would again be granted to borrowers paying rates of interest in excess of 5 per cent. and the warrants amounting to £63,90o had been dispatched. He ought to say that borrowers could not look for a continuance of the same generous treatment. The cost of these rebates to the Society over a period of seven years exceeded half a million pounds.


Total management expenses had decreased by some £8,000— but this saving was more than counterbalanced by the increased provision which it had been necessary to make for Income Tax. Including National Defence Contribution, the Society was this year providing no less than £246,600, nearly a quarter of a million pounds, to satisfy the demands of the Chancellor of the Exchequer.


The shareholders would, he was sure, be anxious that he should afford them some enlightenment as to the effect of the war on the Society. So far as borrowing members were concerned, mortgage repayments had been well maintained. Where a borrower, either through service with the Armed Forces or for other reasons arising from the war, had found himself unable to meet the full repay- ment on his mortgage, the Society had expressed willingness to accept a smaller payment to tide over a difficult period, but there i were very few cases where the Society would not receive its interest in full. From long experience, he could assure the shareholders that the vast majority of the Society's borrowers were only too anxious to meet their obligations to the full.


So far as the investing members and depositors were concerned, there had been no evidence of any loss of confidence. Naturally, with- drawals had been on a larger scale than usual and it had been neces- sary to impose some restrictions. No member or depositor had been kept waiting for his money for a day longer than the period pres- cribed by the rules, and conditions were rapidly returning to normal.

Whilst the board regretted that His Majesty's Government had not found it practicable to introduce a scheme for the insurance of property against war damage, the board appreciated their difficulty and were reassured by the Government's reiterated promise that on the conclusion of hostilities all claims would be met so far as the resources of the State permitted, and that up to a certain limit claims would be paid in full. As the great bulk of the Society's securities consisted of small properties, spread over a very wide area, the board felt that a reasonable measure of protection was afforded both to the Society and to its members.


The Act of 1939 which recently came into operation placed beyond a doubt (if any ever existed) the validity of transactions such as had been the subject of litigation during the past year, defined the classes of collateral security which might be accepted for the future, and made it certain that the purchaser of a new house should have full knowledge of the arrangements existing between the vendor and the building society for financing the transaction. The Society welcomed the Act which, for the most part, only served to make compulsory what had been the general practice of the Society for many years past.

He could not conclude these remarks without expressing his per- sonal obligation to his colleagues on the board of the Society for tiler continued loyalty and co-operation. He also wished to place on record the board's appreciation of the loyalty and devotion to duty of the officers and staff of the Society, both at head office and at the branches, and in this connexion he would mention especially those members of the staff who had been transferred to the Society's new quarters at Westerham. Thanks to the untiring energy of all concerned in the transfer, the change over had been accomplished with a minimum of disturbance of normal routine. He would like to express the hope that they might all meet again in twelve months' time and that the shadows which now enveloped them would by then have been dispelled by the dawn of a new era of peace and prosperity.