COMPANY ELT i NG

BARCLAYS BANK

RECORD DEPOSITS THE FALL IN ADVANCES MR. EDWIN FISHER'S ADDRESS

THE 46th ordinacy general meeting of Barclays Bank, Limited, was held on Monday, January 27th, at the head office of the bank, 54 Lombard Street, London. Mr. Edwin Fisher (chairman), who presided, said: The balance- sheet of the bank for December 31St, 1940, reflected the incorporation in their figures of those of the Union Bank of Manchester, Limited, which was amalgamated with Barclays Bank as from January ist, 1940. The reserve fund had been increased to £11,250,000, by bringing in the reserve fund of £500,000 of the Union Bank of Manchester, Limited.

The total of the current, deposit and other accounts of Barclays Bank had risen to the record figure of £546,914,676, against £461,376,448 at the close of 1939. The manner in which their funds were employed was shown on the assets side of the balance-sheet. Their position was very liquid, due to the short-term finance they were providing for the Govern- ment. The total amounted to no less than 44 per cent. of their current deposit and other accounts. This abnormally high ratio, which reflected the conditions prevailing as a result of the war, meant that a larger proportion of their funds than usual was being emp:oyed in the less remunerative of banking assets.

Among their other assets the total of their investments, excluding those in subsidiary banks, amounted at the end of December last to £121,474,855, and showed an increase of £22,634,026 compared with the close of 1939. This rise was entirely accounted for by an increase in British Government securities, their holding of which amounted to L113,491,466 at the date of the balance-sheet. In support of the war effort the bank had invested largely in the new issues of Government loans and, as the shareholders were no doubt aware, -they had given considerable support to the war weapons weeks held in many parts of the country, by subscribing locally for National War Bonds. The extent to which the banks were directly assisting in the provision of war financ,t was not always appreciated by the public. Apart from the considerable sums they were lending to customers of the bank for financing war contracts, they had greatly increased the amounts which, in one form or another, they were lending to the Government. To give an illustration, while the deposits of the bank had risen, since the beginning of the war, by £118,000,000, their combined holdings of British Government securities, Treasury bills and the new Treasury deposit receipts had increased by £1o6,00o,000.

NATIONAL SAVING It could not be too widely understood that the successful financing of the war and the avoidance of inflation could only be secured if each individual in the country would play his part and save all he could for investmenil in Government loans, even to the point of sacrifice.No better security was to be obtained, and the investor, by practising rigid self-denial, was helping to safeguard his future in the broadest and truest sense. The work of the Savings Committees had attained a notable success. The results, however, must only spur the community to even greater efforts, for, gratifying as they had been, the needs of the country called for more and still more saving. The cost of the war was met by taxation and Government borrow- ing.. Taxation should aim at that equitable distribution of burdens, obtaining the maximum amount without creating avoidable hardship. Government borrowing, so far as possible, should be based upon and have relation to the savings of the people, which must be maintained at the maximum level. To the extent that incomes had been increased as the result of war conditions, so should contributions towards Government expenditure, in the shape of subscriptions to Govern- ment loans, be looked for and expected. They must, however, go further than that ; for the demands on the productive capacity of the country made by the fighting Services left no doubt that the stan- dard of living today would have to suffer further reduction until the War was won. To the extent that increased profits accrued as a result of war conditions, it was right that they should make the fullest ontribution to the financial needs of the Government.

ADVANCES

The total of their advances had declined to £197,283,706, against 200,847,108 twelve months earlier, and, as their figures now included e advances of the Union Bank of Manchester, Limited, the diminu-

was even more pronounced. In view of the great industrial covit, this fall might be surprising to many, although it had to be me in mind that, while some trades and businesses had become re active by reason of the war, others had been adversely affected. e shareholders might feel confident that the bank was doing all t could to ensure that ,the credit resources it commanded were mialoyed to the best advantage of the country.

Referring to agriculture, Mr. Fisher stated that this industry had hit properly come into greater prominence as a result of the war, nil the position of farmers had been improved through the steps • ."-2! the Government to afford them increased security. The

bank always endeavoured to see that its farmer customers should receive the accommodation which their position justified. In order to minimise the possibility of any deserving case being overlooked, the banks, in agreement with the Minister of Agriculture, had appointed liaison officers in every county, to work with the County War Agricultural Executive Committees.

NET PROFIT The net profit for the year ended December 31st last, after pay- ment of all charges and after making provision for all bad and doubt- ful debts and fat contingencies, amounted to £1,525,665 16s., which was a reduction of £259,214 8s. id.. compared with the figure for 1939. This fall was not unexpected in view of prevailing conditions. The directors recommended the payment of final dividends of 5 per cent., making to per cent, for the year, on the A shares, and 7 per cent., making 14 per cent, for the year, on the B and C shares, less Income Tax, involving a sum of £598,844 25. 9d. and leaving a balance of £546,705 55. 6d. to be carried forward. Some share- holders at times may have felt that, when profits were rising, some extra return by way of increased dividend might have been forth- coming. He had little doubt that the shareholders would agree that the policy which had been steadily pursued had been in their real interests, an : it could be regarded as a contribution by them to the stability of the bank, which had so far been in a position to maintain its dividend payments unchanged for many years.

Referring to the export trade, Mr. Fisher said that exports were always essential to Great Britain, and this was particularly so today, when the country was at war. The exports which were most advan- tageous to Great Brjtain were those that went to countries from whom she in turn bought goods that were essential for her needs, or, preferably, from whom she received dollar exchange, as being the form of foreign exchange which suited her best. An export which, in addition, involved a minimum of imported raw materials—thus economising in foreign exchange and in shipping space—and which made no undue demand upon labour essential for war production would seem to have all the virtues. No one is asked to imagine for a moment that all exports should comply with these requirements. They are only mentioned to point out some of the considerations which have to be borne in mind when assessing the relative value of exports and to emphasise the need for selectivity.

VITAL NEED FOR COMPETITIVE PRICES It is encouraging to note that the Government, through the machinery of the Export Credits Guarantee Department, have gone a considerable way to help with many of the difficulties which he in the path of the exporter in war-time. Through a variety of policies and guarantees, the Department offers insurance against such things as loss caused by insolvency of the buyer, exchange difficulties, impediments to the completion of export transactions, such as non- shipment of goods arising out of the inability of the buyer to take delivery, or interruption of payment for goods delivered, owing to war happenings. and increases in rates of insurance or freight affect- ing export contracts. In view of the present rising cost of production at home the price of our exports may become a matter of serious consequence, for in world markets—as indeed in all markets—it is not only the quality, but also the price of the goods that counts ; and if our prices are not comparable with those of our competitors, then our goods may not be sold. It is, therefore, of paramount import- ance that every effort should be made by our manufacturers and traders to keep their export prices on as competitive a basis as possible.

WAR-TIME EXPERIENCE The shareholders will recall that last year I referred to the internal arrangements we had seen fit to make in the bank as war-time measures, and, in particular, to the system of duplication of records which had been instituted so as to ensure that our services could be carried on in all circumstances. It was hardly to be expected that we should be able to avoid sustaining damage to some of our bank premises when the enemy air attacks on this country developed ; but when we consider the number of our branches In London and the- where, the amount' of serious damage is not large. Any dislocation of business caused has been speedily remedied and immediate steps have been takei to ensure the resumption of banking business with as little delay as possible and with the least inconvenience to our customers. In making these arrangements, we have received much assistance from the neighbouring branches of other banks, and we are grateful to them for the spirit of helpfulness and co-operation which was so readily forthcoming.

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ENEMY ACTION: DIFFICULTIES SPEEDILY OVERCOME

The experience of enemy bombing since August last has tested and shown the wisdom of our plan of preparedness. I make no apology for giving the following details to show how the system worked, when it had to be brought into instant operation, as I feel sure it will be of• interest to the shareholders.

Our Wealdstone office—a branch on the outskirts of London— received a direct hit from a high-explosive bomb. The books of the branch were almost completely destroyed, and the contents of the strong room suffered considerable damage from the explosion and from water. Happily, no one was hurt, notwithstanding the fact that the manager and his family were sleeping on the premises. The damage occurred early one Friday morning. The reconstruction of the records of the branch was immediately taken in hand, and by noon the next day all the current accounts had been reconstructed and moved, and a branch balance-sheet was drawn up the same afternoon. On the following Monday morning the branch was reopened in temporary premises, and all customers' statements were ready for them. By the evening of the same day, deposit, home safe,

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BARCLAYS BANK

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and loan accounts had been verified, while, by the afternoon of the next day the deposit interest had been checked and the branch was working normally.

At Coventry, where we have an important branch, a large part of our premises was destroyed by enemy bombing and by fire, but the front part of the premises was left standing. A wall ao feet high was built in one and a half days across the office, screening the damaged from the undamaged portion of the premises, so that work could be resumed. The branch was hit on a Thursday night, but by 10.30 on the following Saturday morning, after the. debris had been cleared away, access was gained to the strong room door, the keys turned in the locks, and all the securities, cash, and ledgers were found to be perfectly safe and undamaged. Half an hour later oar cashiers were paying out wages and all our customers' requirements were satisfied. The office bookkeeping machines had been transferred to an adjacent branch, and everything there has continued to work well. In the damaged office at Coventry great discomforts have been borne 'ay our staff, but all have faced the situation cheerfully.

STAFF'S RESOURCE AND INITIATIVE There are other instances of a comparable kind which I could quote, but the examples given show what has been achieved and are typical of the way in which the difficulties have been faced and overcome. In dealing with our special problems, the staff have invariably shown peat resource and initiative, and the success of their efforts to ma'n- tain banking services whenever they have been threatened reflects the greatest credit upon them, as well as upon those members of our head office staff, who evolved our own scheme, wh:ch has made possible such rapid reconstruction of accounts. A va'uable contribu- tion to the maintenance of an efficient banking organisation in these times was made by the chief executive officers of the London Clearing Banks, who, acting in concert, have devised many agreed measures to meet the various emergencies which might arise as a result of tho war.

THE CHANNEL ISLANDS The occupation of the Channel Islands by the enemy created further problems for the bank, as we have branches in Jersey and Guernsey. Our duplicate record system again justified itself, and those of our customers who left the Islands have been able to continue their accounts with a branch of the bank on the mainland.

ITALIAN AND FRENCH SUBSIDIARIES

One effect of the war is that we have been comp'etely cut off from our Italian bank in Rome, and from the branches of another subsidiary institution, Barclays Bank (France), Limited. It is clear that nothing can be done by us with regard to these subsidiar'es until after the war. but shareholders will be glad to know that when the control of these banks passed from us the p-isition of both concerns was one of extreme liquidity and was thoroughly sound.

TRIBUTE TO PERMANENT AND TEMPORARY STAFF

The number of those on the permanent staff who, on December 31st last, were absent from the bank on full-time war service was 3,787, which compares with a figure of over 2,000 that I gave to you a year ago. The gaps in our ranks have been made good in various ways. A number of pensioners have returned to help us, and, in certain cases, men who had completed their service on reach:ng the age of sixty and were about to retire have been invited to stay in the serv:ce of the bank for the time being. We are indebted to 5- em, and the experience which they are able to bring to bear is undoubtedly of great value to us at this time. We have a number of men worleng in the bank as temporary clerks ; but the vacant positiors have been mainly filled by women clerks, who, I am glad to say, have adap-P1 themselves readily to working conditions in the bank. I would t^ke this opportunity of thanking, on behalf of the board and of the share- holders, all our staff, both permanent and temporary, for the examn'e which they have shown, in the unusually difficult times of today, and for the unsparing efforts which they have given so freely to the bank.

THE RESOLUTION

The Chairman: I pow beg to move, "That the report of the directors produced, together with the annexed statement of the com- pany's accounts as at December 31st, 1940, duly audited, be receivel, approved and adopted, and that a final dividend of 5 per cent., making an per cent, for the year, on the A shares of £4 each fully paid, and a final dividend of 7 per cent., making 14 per cen-. for the year. on the B and C shares of £1 each fully paid, less Income Tax in each case, be declared, payable on the 8th proximo, to the shareho'ders registered in the books of the company on December 31st last."

Mr. W. M. Goodenough, the deputy-chairman, seconded the resolu- tion, and it was carried unanimously. The retiring directors were re-elected, and the auditors, Messrs. Price, Waterhouse and Co. and Messrs. Kemp, Chatteris, Nichols, Sendell and Co., were reappointed for the ensuing ye zr.

A vote of thanks to the chairman for presiding at the meeting was unanimously accorded, and, after thanking the shareholders, the chairman made reference to the impending retirement of Mr. W. N. Seeley, the secretary, and Mr. J. H. Beckwith, the chief accountant, each having comp'eted 46 years' service, and conveyed to them the good wishes of the shareholders and of the directors of the bank in their retirement.

The report and accounts were adopted and other ordinary business transacted.