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We realised that when the increase in interest on capital and with this the drop in prices of
Government stock occurred, adjustment to these events could take place more effectively by charg-
ing the loss which would be sustained on sale of investments to the Profit and Loss Account
rather than continuing the previous method of setting aside reserves against losses in quotations of
securities. In part the stock sold was converted into other types of investment (money out as
debtors), in part investment stock was repurchased again at a lower price. After the sales which
have been effected the Central Bank's holdings consist only of securities due regularly for repay-
ment or redeemable within a comparatively short term, and therefore we consider it warranted to
maintain the existing system of valuation, in view of this and of the liquid funds available which
make enforced sale of our investment securities unlikely.
Owing in part to the changes outlined above, the Central Bank's pattern of investment under-
went a noticeable alteration, as appears from the following,
PATTERN OF DEVELOPMENT OF CENTRAL BANK S ASSETS
(fl. million)
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Because of a better yield from the various investments the Central Bank had a higher gain
in interest despite an increase in the rate of interest paid to the agricultural banks and despite the
increase in costs, and this was indeed needed in order to be able to effect the transactions outlined
above. Commissions, too, made a greater contribution towards profits. A considerable part is
played in greatly increased expenses by the higher paper prices. After reserves against debtors
and participations at fl. 400,000 and for future repairs etc. to buildings at fl. 75,000, a profit
balance remains of fl. 134,700 (last year fl. 492,096) after allowing for a reserve for tax liability of
fl. 250,000 and for the proposal to contribute fl. 75,000 to the Pension Fund.
For the results obtained during the year in our agricultural credit organisation we are ex-
tremely grateful to the managers and cashiers of the local agricultural banks and to the Central
Bank personnel. Once again a great effort was called for from every one in order to keep admin-
istration and accounting up to present-day requirements. We wish to record our gratitude to all for
their devotion to the interests of our agricultural credit organisation.
ORGANISATION AND WORK OF THE CENTRAL BANK.
Board of Directors. In addition to the meetings of the Directors' Committee, sixteen meetings
of the Board were held during the year. At the General Meeting of 23rd April 1951 the retiring
member of our Board, Jonkheer J. Th. M. Smits van Oyen was reappointed. Mr. Edm. Delhougne
is now due to retire according to rota. An oppor tunity will be given to fill this vacancy.
Managers. There were no changes in the management during the yaer.
Branches and Agencies. The opening early in the year of a branch at Arnhem as referred to
in our last annual report proved to have satisfactory results. It became possible to provide more
efficiënt service, as was the intension, to the agricultural banks situated in the Arnhem Branch's
district, and the Branch itself also became a useful link in serving the Central Bank's current
account customers. The Roermond agency again provided valuable service to the Central Bank's
customers in Limburg.
Inspection. The credit restriction measures which required the local banks to submit monthly
lists of balances of their agricultural banks meant that the cashiers had to devote still more atten-
tion than previously to balancing their books. Balance Sheet work could thereby be performed more
smoothly while in addition the managers obtained every month an accurate statement of the position
of their agricultural bank. The Inspection Service also benefited from this in that fewer Balance
Sheets required amendment and thus inspections in general proceeded more smoothly.
In 1951 fifty-three banks were audited in respect of the financial year 1949 and five hundred
and eight in respect of the financial year 1950. There were twenty-four special inspections. Although
every inspection is accompanied by a surprise cash audit, a further fifteen cash audits were never-
theless carried out.
Besides normal inspection work various engagements were fulfilled to speak at general meet
ings of the affiliated agricultural banks, at meetings of the Farmers' Unions, Dairy Factories,
Buying and Selling Assiciations, etc.
Modernisation of accountancy procedures of the affiliated banks was continued.
Although there was an occasional instance of weak management or inadequate supervision,
we are pleased to place on record our sincere gratitude for the spirit of devotion in which the
ever-increasing volume of work at the local banks has been performed.
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1996
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194S 1949 1950
Liquid Funds DOOP Debtors
ESgliBflH Securities Other Assets
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1951
