I take it that the shrinkage | in our net profits is almost entirely due to : the calamities of our intercolonial neigh | bonrs, for not alone is there in sympathy j with them a great economic wave rolling along our shores, causing considerable diminution generally in the volume of trade in the Colony, but the Australian wholesale houses, finding themselves with j large stocks almost unreilisable over j there, hasten to obtain an outlet at any j price here. Our experience has been that | these surplus Btocks consist mainly of good* j,of a totally different standard from what we have consistently placed before the public, therefore wa abstain from purchasing. This cannot be said of many of the Com" pany's competitors, and we halve been forced not only to be content with less than legitimate profits to meet the occasion, but have been driven into a largely in creased expenditure, which, whilst enabling us to maintain, and, indeed, in each of the Company's branches, considerably swell the turnover as compared with last year, has resulted as I have just stated, in a smaller net profit. Notwithstanding these temporary drawbacks, added to the low •prices ruling for all Btaple products, and the very bad winter experienced, more particularly in the North Island, I have great pleasure in stating that our profit for division amounts to the handsome figure of £7482; co that with only the natural development that i 3 always taking place, and the passing away of the oloud momen tarily resting here consequent on the un certainty connected with the N.Z.L. and M.A. Company, we have good reason to look .very hopefully for decided expansion in business and improved profits. We must all be pleased to note the increased output of gold, which proves thab our resources in this direction are capable of yet much further development ; whilst the tone of admiration which the FreßS of the Mother Country adopts towardß us is indicative of the high place we now hold in their esteem as a part of Greater Britain. 