74 



REVIEW OF REVIEWS. 



March I, 1913. 



Government, and other public securities, 

 iJ'460.000 ; cash, ^^277,000 ; other loans, 

 iJ" 1 78,000 ; building- societ)- shares, 

 ^^"48,500 ; deferred instalments of pre- 

 miums, i^i 30,000 ; and properties ac- 

 quired b}' foreclosure, ^^^64,000. 



The amount in Government securities 

 is small, compared with the mortgages 

 and the freehold propert}-, which, to- 

 gether bear the heavy proportion of 

 over 70 per cent, of the total assets. 

 Such a marked preference for real estate 

 investment is somewhat disquieting when 

 one remembers how the crash in real es- 

 tate in 1893 crippled several life offices, 

 and severely injured others. It is still 

 more so, when one notes the large hold- 



ing in builduig societ\- shares, a holding 

 suggestnig very strongh- the quer\- as to 

 how much of the mortgages of 

 ;£"4, 5 27,000 is building society securities. 

 The Directors have, however, no fears on 

 the matter, for during igi2 over 

 i^5 10,000 of the increased funds, 

 ^^"589,000, was lent on mortgage. More- 

 over, the chairman stated that freehold 

 property, " in \-our Directors' opinion, is 

 the most stable and satisfactory form of 

 investment for the funds of a life assur- 

 ance compan)-." Such a statement the 

 histor}- of the land boom does iiot 

 support, and polic}holders will do well 

 to get some more definite statement in 

 specific terms as to the value of the 

 assets, especial 1}- in connection with the 

 building societ}' securities. 



COMMERCIAL BANKING COMPANY OF SYDNEY LTD. 



The upward movement of about 

 £"8000 in this bank's December, 191 2. 

 profit, to ^^132,01 1, was not altogether 

 unexpected. Early in 191 2 a fresh issue 

 of i^2 50,000 of capital was made, and 

 as most of this was paid up in June, 

 191 2, it was considered extremel}' pro- 

 bable that practically the whole of it 

 would be in at December 31, thus en- 

 tailing a heavier dividend charge. As 

 a matter of fact, there was only £1 1,500 

 of capital unpaid at the close of the 

 period, and the 10 per cent, jjer annum 

 half-\-earlv dividend charge was accord- 

 ingl\' iJ"86,300 — about £\ i,ooo above the 

 June charge. Still the profit declared 

 was ample to meet this, and in addition 

 to permit of ;i£"40,ooo being added to the 

 reserve fund, raising it to iJ"i, 580,000, 

 leaving ;^5700 to be carried forward in 

 the profit and loss account — iJ"6o,200. 



^ * * 



During 191 2 the Xew South Wales 

 State Government expenditure was very 

 heavy, and the Government balances 

 with the banks shrunk accordingly. For- 

 tunately for this bank, the ordinary cus- 

 tomers' deposits, both current and fixed, 

 rose, both in number and in volume, and 

 so checked this drain. But the\- did not 

 suffice to prevent the deposits falling 

 in the vear by almost i;"36o,ooo, to less 

 than i^20, 590,000. In addition to this. 



the bills m circulation decreased by 

 about i^22,ooo, to /^ 1, 3 10,000. while the 

 withdrawal of ;£"42.ooo of notes, reduc- 

 ing the circulation to ^^37,000, also in- 

 creased the drain. 



The bank's lending power was, neces- 

 saril}', weakened b}- this outgo, by over 

 ;^423,ooo. Still, for all that, the cus- 

 tomers' demands for loans did not suf- 

 fer to anv great extent. The advances 

 instead of being reduced, were increased 

 by about ^^3 3 0,000, to ;£■ 1 4,09 1 ,000. For 

 the extra funds required to meet the new 

 loans, and the declining deposits, the 

 bank drew on its liquid assets, and these 

 dropped, by ^435,000, to ;^i 0,772,000. 

 The decrease would have been still 

 greater, but fortunately the new capital 

 paid up, and the current profits, pro- 

 vided about ;^340,ooo. 



* * * 



Notwithstanding these adverse move- 

 ments, the bank's strength was not weak- 

 ened in any marked degree. A year ago 

 the liquid assets represented just over 

 50 per cent, of the public liabilities, 

 whereas they are now 49 per cent., which 

 is still an excellent proportion. 



# * * 



The introduction of the new paid- 

 up capital, combined with the decrease 



