COMPANY MEETING
BANK OF AUSTRALASIA
TRADE CONDITIONS IN AUSTRALIA
THE one hundred-and-fifth annual general meeting of the Bank of Australasia was held, on the 30th ultimo, at the office, 4 Thread- needle Street, London.
Mr. D. F. Anderson, in the course of his speech, said: Last year the balance-sheet total stood at the record figure of £55,846,000, the growth of roughly £44 millions during that year .being due largely to increases of over £14 millions in fixed deposits and over £2 millions in current acounts. This year fixed deposits and cur- rent accounts are each down by about £600,000, and their fall has caused a reduction in our balance-sheet total by rather more than kr million. The assets side of the balance-sheet shows more variation. The first item—specie, bullion, &c.—is lower by nearly £4,700,000, and we are glad to see it, for it means that we have been able to find a useful and we hope profitable outlet for something like that much more money. As a result specie, bullion, Government notes and cash balances at £5,378,000 represent just over 134 per cent. of our total deposits, as compared with nearly 25 per cent. last year. If we add British, Australian, and New Zealand Government and other securities, the total for this year is over 35 per cent., or 7s. in the of our total deposits, compared with 45 per cent., or 9s. in the £, last year. On this occasion last year the chairman remarked on the unusual strength of this position, but he added that we would rather have more money employed in safe commercial advances, and during the last year conditions have made this possible. Advances have in- creased by £3,600,000 during the year. They amount to 93.6 per cent. of the total deposits—a figure which might alarm bankers in this country but which is nothing unsual in banks operating in Aus- tralia and New Zealand. The reason for this difference is that in an industrial country industry tends to raise its capital from the public. The bank is not its permanent source of working capital. In countries where primary producers arb the chief borrowers this is not so, and the individual pastoralist looks either to his bank or to the pastoral companies for his capital. Forty-five per cent. of our advances are to pastoralists, graziers, farmers and industries allied to them, while ro per cent. are to manufacturing and other secon- dary industries. In the profit and loss account two features stand out—an increase of £44,000 in salaries and general expenses in Australia and New Zealand, due largely to awards and out of our control, and of £80,000 in rates and taxes. This is the first full year in which we have paid National Defence Contribution. We have, however, with a net profit of £310,049, maintained last year's dividend and pro- vided a small additional of £22,000 to the carry-forward, which now amounts to £227,000 odd.
We hope that you will not be dissatisfied with this result. If it is not spectacular? it has certainly not been achieved without a great deal of constructive thought and energy being put into their work by all the officers of the bank.
So much for our domestic affairs, but before moving on to trade topics I would like to re-echo the pleasure with which Australia has greeted the news of the appointment of H.R.H. the Duke of Kent as Governor-General in succession to Lord Gowrie, whose long and strikingly successful service in Australia is coming to an end this year. I need not say that their Royal Highnesses will have a rare welcome in Australia, which is distinguished not only by its loyalty to the Crown but also by its genuine hospitality to all visitors, however humble or however highly placed. I do not propose to give you many trade statistics, which are hard to follow unless they are in front of you, but you will wish to know how Australia and New Zealand have fared during the year.
Imports into Australia in 1937-8 amounted to £1114 millions sterling, as against £904 millions in the previous year, while excluding gold and silver, exports amounted to £1124 millions sterling, against £117 millions. The reduced value of exports was more than accounted for by wool alone, which dropped from £50 millions sterling to £374 millions sterling. Not only had the price fallen by about 24 per cent., but the clip was about 9 per cent. less.
We have, as you know, an important stake in New Zealand, which, like Australia, has experienced during the past year a decline in the value of exports and an increase in the value of imports. In the two years ended June 30th, 1936 and 1937, the excess of exports from New Zealand over imports into New Zealand was practically the same at f,NZ 14 millions. Both exports and imports had risen sharply in the second of these years, and by the same amount—namely, £NZ it millions. In the following year, how- ever, up to the end of June, 1938, while imports continued to rise by another ENZ74 millions, exports fell by £NZzl millions and the favourable balance dropped by £NZro millions to £NZ4} millions. It must be remembered that about LNZ7i millions sterling is required for debt service in this country.
In respect of this past year we expect to be called upon to pay in New Zealand income-tax more than zos. in the £ of profit made there. In other words, our profit will, we fear, have been turned into a loss, and, unless an alteration is made, we may quite well find before long that in a year when we have made an actual trading loss in New Zealand we are called uoon to pay even more income- tax than in 1937-38. This alarming possibility springs from the basis on which tax is levied on the banks, namely, an arbitrary per- centage of assumed profit of the total assets and liabilities in the Dominion.
The report and accounts were unanimously adopted, and the retiring directors and auditors were re-elected.
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