OMPANY MEETING

WILLIAMS DEACON'S BANK, LIMITED

MR. GERARD POWYS DEWHURST'S SPEECH THE annual meeting of the shareholders of Williams Deacon's Bank, Limited, was held on Thursday, January 26th, 1939, in the Board Room, Mosley Street, Manchester, Mr. Gerard Powys Dewhurst (the chairman) presiding.

The secretary read the notice convening the meeting and the auditors' report. The chairman, in moving the adoption of the directors' report and statement of accounts, said : Gentlemen, I have received apologies for unavoidable absence from our meeting today from certain mem- bers of the board. From the report in your hands you will note that, following upon the rebuilding of our old office in Birchin Lane we have opened, or are opening shortly, new branches of the bank in London and the North.

You will also see from the report that our late general manager, Mr. Harold Bradburn, was elected last summer to a seat on the board, which appointment you will presently be asked to confirm. During a life-long career in the bank, Mr. Bradburn has in turn filled with distinction most important positions in the service both at Sheffield and Manchester, while as general manager since 1931, his ability and conduct of affairs have earned our keenest apprecia- tion, and now as a colleague on the board we are fortunate in retaining the benefit of his experience and advice. To fill the position of general manager of the bank we have appointed Mr. J. M. Thomson, and we take this opportunity of wishing him every success in his new sphere of office and assuring him of our whole-hearted support. Taking the remainder of the report, with your permission, as read, and turning to the figures of the balance sheet, our capital shows no change, but successive increases in the balance of profit carried forward in the last few years have enabled us to place £roo,000 to our reserve fund, bringing this figure up to aoo,000.

Lower totals of deposits following the withdrawal of foreign balances, which this year have been a feature of most bank balance sheets, are hardly reflected in our figures where we note a reduction of £229,000. Acceptances show little change, but our endorsements and obliga- tions on customers' account at £1,539,000 show an increase of £448,000.

Turning to the assets side of the sheet, our holding of cash is higher than last year by some £400,000, representing over II per cent. of our deposits. Balances with other banks also show a small increase : on the other hand, we have employed rather less short money on the market than last year.

A reduction in our holding of treasury bills accounts mainly for a decrease of over half a million in the item of bills discounted.

Our investments show little change during the year, while our Advances at £14,175,000, appearing at a slightly lower figure, are an indication that for the time being our customers' requirements on balance have been affected by the smaller amount of finance required for the movement of goods.

• Bank premises account, after an appropriation from the year's profits, shows a net decrease of £28,000.

I feel that the figures I have quoted, which, of course, have only been arrived at after full provision has been made for weak or doubtful positions, definitely emphasise the liquid position of the bank.

Turning now to the figures of profit and loss, our net profit, after making the usual provisions, appears at a total of £301,418, as com- pared with £310,921, or a decrease of £9,503. This profit, with a balance of £148,592 brought forward from last year, gives us a total of £450,010 now to be dealt with. After transferring £3o,000 to premises account and £roo,000 to reserve fund, we are in a position to pay a dividend at the rate of 121 per cent. on both our " A " and " B ' shares, and carry forward to next year's account £85,635 as against £148,592 brought in. The incidence of taxation has to some extent had its effect on our net figures, and we can be well satisfied with the results recorded for the year. In the year under review, the country has experienced two majo crises in Austria and Czecho-Slovakia, which were more dangerous to the peace of the world than any since 1914, and hardly a week has passed without some occurrence calculated to restrict trading enterprise and weaken confidence. Feelings of political and economic insecurity have been intensified and have caused the diversion of resources from productive trade to sterile rearmament. Under such conditions, it is hardly surprising to find that the turnover of British Overseas Trade in 1938 was lower by some

II per cent than in 1937 ; on the other hand, the trend of prices with dearer exports and cheaper imports has in many instances favoured this country for the time being ; consequently the visible adverse balance of trade was substantially smaller than in 1937 and this should help to off-set the less favourable result which we may anticipate will be shown by invisible exports. But even so, unless we are prepared to live on our Capital, the country's position appears to call for the most rigid economy, especially in view of our enormous Rearmament programme, which must involve heavy purchases of material from abroad. No expenditure can be grudged that is considered essential to the safety of the country, but value received" rather than "expenditure voted" should be the measure or standard by which every Government Spending Department must be judged.

From the point of view of international trade, the principal achievement of the year has been the successful conclusion of the Anglo-American Pact, the main feature of which is that a large part of the United Kingdom concessions consist of an agreement not to raise duties rather than an undertaking to reduce them, while the United States concessions are much more in the nature of a reduction of duties than a stabilisation ; but apart from the point of advantage or disadvantage to either contracting party, this Treaty may prove of very great value by creating a large area of freer trade and demon- strating the advantages of such a development to the world at large. The Stock Exchange has had a most difficult year, and mainly through lack of confidence, normal Investment business has been reduced to a minimum.

During the September crisis, all Government Securities fell heavily to a point where prices were fixed below which dealings were not allowed, but the subsequent recovery still leaves prices considerably lower on the year. A further sequel to the September crisis was the heavy withdrawal of foreign moneys from London, which, coupled with the repatria- tion of French Funds, caused a fall in sterling which necessitated the reimposition of the embargo on foreign issues and advances against gold, which had been withdrawn earlier in the year.

If we turn to the area more directly served by the Bank, I am afraid the improvement in the cotton trade which we were able to note twelve months ago has entirely vanished, and conditions during the past year can only be described as having been extremely difficult.

The volume of cotton piece goods exported to overseas markets has declined in the year by nearly 28 per cent., and in value by nearly £19,000,000, practically all markets showing reduced figures. This is the lowest recorded figure of export since 785o, and for the first time we find cotton piece goods displaced as the most valuable section of the British export trade.

The repercussion on the home trade already fully catered for, has been immediately felt, and weak selling, coupled with indiscriminate price cutting, has once more been a prevailing feature in this section of the trade.

Faced with this position, all concerned in Lancashire are anxiously awaiting the terms of the new British India Tiede Agreement, which is to supersede the Ottawa Pact of 1931, in the hope that some understanding may be arrived at with regard to imports into India in place of the existing prohibitive duties.

The report of His Majesty's Senior Trade Commissioner in India is illuminating though not encouraging. He states that the fiscal activities of the Indian Government, with the object of fostering indigenous industries, have reduced several of the leading British exports to India to comparative extinction (high Revenue duties raised as a temporary measure to meet the financial crisis of 1931 have had an effect that was never intended) and he goes on to point out that this policy of maximum industrialisation must lead first to a clash of interest with the agricultural element, secondly to a crisis in India's finances, as the Government rely upon custom receipts for 6o per cent. of their revenue, and finally to a collapse of the economic

and financial fabric of the Government of India, which is dependent upon an excess balance of exports to meet India's financial commit- ments in London and maintain the exchange.

It is in the hopes that this report will bear weight with the respec- tive Governments in their discussions, and that due consideration will be given to the fact that this country is by far the best customer for India's exports, that Lancashire awaits the publication of the new agreement.

An even more momentous issue in the shape of the Cotton Enabling Bill is now before every firm in the industry, and their individual opinion is being tested by ballot, which will decide whether the proposals of the Joint Committee of Cotton Trade Organisations shall go to the Board of Trade for embodiment in legislation.

Opposition there has been, which the Joint Committee has gone to the limit to meet, and now it is to be devoutly hoped that, taking the widest view of the needs of the cotton trade, a convincing majority will register their approval of these proposals.

As I stated last year, some such co-ordinating authority as is envisaged by this Bill is essential if the cotton trade is to put its house in order and maintain and improve its position in the markets of the world.

From our Branches in the Sheffield area, we gather that the steel trade made a certain recovery in the autumn from the recession that that was apparent in the earlier part of the year, the production of pig iron and output of steel having shown up better in the later months, while the reductions announced in the price of steel and the acceleration of the rearmament programme hold out good promise for increasing turnover in the coming year.

Reports from the colliery districts of South Yorkshire, while not so good as last year give indications of a fair trade, though stocks of coal in yards and colliery sidings seem to be unduly heavy. With the exception of engineering, which has been heavily engaged on rearmament work, reports from the Bolton area are not good, unemployment figures there in the cotton industry alone showing an increase of over 3,000. And I am afraid the same tale of distress comes to us from Wigan, Rochdale and Oldham districts.

Before I conclude, I should like on your behalf to convey to our general manager, Mr Thomson, the assistant general manager, and the officers and staff of the Bank our best thanks for their efficient services and to assure them of our keen appreciation of the way in which the work of the Bank has been conducted.

The chairman then moved the adoption of the report and accounts, which was seconded and carried.

The retiring directors, Lt. Col. Sir Henry K. Stephenson, Bt., D.S.O., D.L., and the Rt. Hon. Lord Bradbury of Winsford, G.C.B., were re-elected, the appointment of Mr. Harold Bradbum was confirmed and the auditors, Messrs. Ashworth Mosley and Co., were reappointed.