The bank’s legitimate business being well maintained at every point, every effort was being made to cut off the connec tion with the comparatively few remaining things that cannot be classed as proper banking, and we have in these efforts been fairly successful. One of the most important subjects dealt with by the banking legisla tion of last session was the authority con ferred on the directors to issue preferred shares to the value of half a million sterling and bearing a fixed cumulative dividend of 3i- per cent, per annum. This authority has been utilised, and preferred shares for that amount have been issued to Her Majesty as the property of the colony in exchange for debentures payable in London of a like amount, and yielding a similar rate of interest. The debentures are now worth more than their face value, and can readily be disposed of at a premium, but any premium so obtained must, in accordance with the Act, after the payment of expenses, be set apart as a reserve fund. It is a matter for regret that legal difficulties have arisen in the way of having the inscription of the New Zealand Government stock in London transferred to this bank, which diffi culties have not so far been surmounted. Turning now to the aspect of business affairs generally, with which the welfare of the bank is so much bound up, I have much pleasure in remarking that the prices for wool and grain have considerably improved, and now stand firm at figures which are fairly remunerative. There is every pros pect of a bountiful harvest, especially in the South. Importance must also be attached to the revival of the gold-mining in dustry. Every great increase of produc tion in New Zealand due to that revival has hitherto been mainly in the Auckland district, but a large amount of capital has now been imported for the development of mines on the West Coast of the South Island, and we have every reason to expect a largely increased yield of gold from that quarter. The timber trade also has im proved, and altogether I think we may con gratulate ourselves on the business of the colony being much better than it was last year. 