COMPANY MEETING

WILLIAMS DEACON'S BANK LTD

THE annual meeting of the shareholders of .Williams Deacon's Bank Ltd., was held on Thursday, January 27th, 1938, 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 several members of the Board.

You will have seen from the report that we have to deplore the death during the year of our colleague, Percy Ashworth, who for nineteen years had been a member of this Board. Originally head of an old established family concern in Bolton, his intimate knowledge of the cotton trade has been of great assistance to the bank, and we miss him sadly both as friend and Director. Then too the sudden death of William Charles McGrath, an Assistant General-Manager, was a loss the bank could ill afford. Prior to his last appointment Mr. McGrath had been for many years associated with the branch department of the bank, and as Manager of Branches had earned the esteem and affection of all ranks of the staff.

Taking the remainder of the report with your permission as read, and turning to the balance-sheet on the liabilities side our capital and reserve fund show no change.

Deposits which have been subject to considerable movements for the.finance of trade show a net increase of £986,000 on the year. Acceptances and credits for customers are lower by £162,000 ; on the other hand there is an increase of £327,000 in endorsements and other obligations. Turning to the assets side of the sheet, our cash is slightly lower, representing just over to per cent. of our deposits.

Balances with other banks show little change, while we 'have some £430,000 more short money on the market than last year.

Bills discounted appear at £414,000 less • our reduced holding of Treasury Bills more than accounts for this difference.

Increased demands for advances from our customers amounting to £2,40o,00o have a definite bearing on the fall of £1,374,000 in our investments, a welcome reversal of our experience of the last few years.

These advances are extremely well spread, and while we note a dimintgion of demand from textile, shipping and transport quarters, the requirements of our customers in such heavy industries as iron, steel, engineering and shipbuilding, and in miscellaneous trades are distinctly larger. Bank premises account, after an appropria- tion from this year's profits, shows a net decrease of £15,000.

Turning now to the figures of profit and loss, our net profit after making the usual provisions appears at a total of £310,921, as com- pared with £293,636, or an increase of £17,285. This profit, with a balance of £102,046 brought forward from last year„ gives US a total of £412,967 now to be dealt with. After transferring £3o,000 to premises account we are in a position to pay a dividend at the rate of 124 per cent. on both our "A " and B " shares, and carry forward to next year's account £148,592 as against £102,046 brought in.

The balance-sheet figures I have outlined give ample evidence of the liquid position of the bank, and after all bad and doubtful debts have been fully provided for, our increased net return is the result of steady progress throughout the system.

I should like to refer here to our trustee, departments whose activities are increasing in a very satisfactory manner. We find that the facilities they provide are recognised and utilised by an increasing number of our customers, and we look forward to further developments in this branch of the bank's operations. The improvement in trade, which was such a feature of 1936, has continued during the year under review, and in most of the heavy industries of the country, as far as output is concerned, new record levels of production have been attained, while the returns both for unemployment and insured persons in employment, at all events for the first three quarters of the year have been favourable.

Unfortunately, the effect of covering .their requirements in raw materials on the part of consumers was accentuated by extensive speculative buying, and following President Roosevelt's pronounce- ment on the subject of high prices a reaction set in, and prices of all commodities fell precipitately. This, coupled with the uncer- tainty of the gold policy of the United States, had a most disturbing effect on the Stock Exchange, and values of Gilt" Edged Securities and Industrial equities alike experienced a heavy fall. This interlude, though undoubtedly a check to business confidence, need not necessarily affect the position of the country's industries with their prospect of continued activity ahead, but it leads one to wonder how far domestic recovery can go without an improvement in international trade.

Imports and exports have both continued to rise, the former partly owing to higher values, out of all proportion to the latter, with the result that the balance of trade has gone badly against the Country during the year, so much so that the excess of imports has reached the formidable total of 432 millions, and after making all due allowance for an increase in invisible exports,, such as shipping freights and investments abroad, this is a disparity we cannot afford to ignore. Great efforts should be made to stimulate our export trade, and discourage superfluous imports, and, in spite of.the attraction of domestic trade and Government orders, and the restrictions attached to dealing with foreign countries, every possible assistance should be afforded our manufacturers and merchants in the further- ance of such policy.

It is from this angle that we welcome the Anglo-American trade negotiations recently set on foot ; any arrangements for the removal of restrictions and the improvement. of trade between the United States of America and ourselves would appear to hold out infinite possibilities from the economic as well as the political point of view.

If we turn to the area more directly served by this bank, we are glad to be able to report that the past twelve months, from a pro- ducer's point of view, was the best experienced in the cotton trade for some years past, and both spinners and manufacturers in the early part of the year were fortified with orders for a considerable time ahead. Demand, however, in the autumn, owing to the fall in the price of the raw material, showed signs of dropping off, and.by the end of the year production bad slowed down, and stocks of goods had begun to accumulate in the hands Of distributors.

The home trade was responsible for most of this improvement, and, though most markets abroad increased their purchases from this country, this was largely offset by a further reduction of our trade in piece-goods with india. The long drawn out negotiations for a new United Kingdom India Trade Agreement to replace the Ottawa Agreement seem no nearer conclusion, and this delay in arranging new trade relations, which leaves untouched the existing prohibitive duties on exports from this country, has been a definite bar to business. The question of working out a satisfactory plan of reorganisation for the cotton trade as a whole has for long now occupied the attention of the Joint Committee of Cotton Trade Organisations, and their proposals to that effect have now been approved, with certain reservations with regard to the export side, by all sections of the trade.

Briefly the Committee proposes that the Government be asked to introduce an Enabling Bill, under which a board representing the whole industry, and an independent advisory committee, would be set up to examine schemes put forward by the industry or its sections, and if satisfied that such proposals were in the general interests of the industry and in particular would tend to assist the export trade, to submit them to the President of the Board of Trade for Parliamentary approval, thereby obtaining statutory effect to such schemes. Taking a view of the industry as a whole, with its vast diversity of interests and activities, it is impossible to resist the conclusion that some such co-ordinating authority is essential if the cotton trade is to put its house in order. The problems which confront each section of the trade are similar in character. Each unit is faced with a surplus of productive capacity, with its inevitable consequence of price cutting and depletion of capital, and it is desirable to ensure that any success which a par- ticular section of the industry may reach in dealing with those pro- blems should not be achieved to the detriment of other interests in the trade.

It would seem therefore that some form of comprehensive organ-. isation which carries the support and confidence of the whole industry, and whose recommendations would carry weight with the Government, is a vital necessity if the trade is to maintain and improve its position in the markets of the world.

The difficulties confronting this cotton industry board are many and obvious. It will not be easy, for instance, to reconcile the position of the manufacturer who must run his machinery, after allowing for replacements and improvements, on a profitable basis, with that of the merchant who must sell the goods in foreign markets at a competitive price, but a strong internal organisation does not necessarily stifle our competitive capacity, nor can we contemplate indefinitely subsidising exports at the expense of capital and wages.

It is to be hoped that the Government will grant facilities for the necessary Enabling Bill to be introduced to Parliament during the present session. We have continued good reports from our branches in the Sheffield area ; iron and steel outputs show continued expansion, and have again reached record figures, while exports, which for some years have been a declining quantity, show a small but welcome increase. The demand for specialities, such as stainless steel, has been well maintained, and both heavy and light sections of engineering are actively employed. The output of coal in South Yorkshire continues at a high level, and, though there are signs that present prices are hindering the export movements, reports from Doncaster show a very active condition of trade.

We have better news from Bolton -than-for some -years past.; the cotton trade in that district has contributed largely to the general improvement, whilst engineers and ironfounders have done well. The building trade there also continues to be active.

Reports from Wigan, with it's high percentage of unemployed, show little improvement, and until some new industry is established there to take the place of disinantled collieries, engineering works and mills, there cannot be much hope of alleviation. Such centres of the cotton and Ivoollen industries as Oldham - and Rochdale also give dear indications of better trade. In conclusion gentlemen, I should hie on your behalf to send a special message of sympathy to our general manager. Since the autumn Mr. Bradburn, our general manager, has been laid low with a most distressing form of rheumatism, which has prevented him taking any active part in the business of the bank, and I feel sure we all wish him a speedy recovery.

In his absence the duties and responsibilities of general manager have fallen on the deputy general manager, Mr. Thomson, and to him I feel we owe a special vote of thanks, while I should also like to convey to the assistant general manager, the officers and staff of the bank our very keen appreciation of the way in which the work of the bank has been conducted during the past year. The Chairman then moved the adoption of the report and accounts, which was seconded and carried.

The retiring directors, Mr. William Whyte and Lt.-Col. Sir Alan John Sykes, Bt., D.L., were re-elected, and the auditors, Messrs. Ashworth Mosley and Company, were reappointed.