Government to protect the tourism industry.

Mr. Trimingham yesterday asked for tax cuts in areas that affect tourism and warned Government that cutting funds for the Island's primary industry would increase unemployment.

Speaking at the bank's annual general meeting, Mr. Trimingham said: "Generally on the Bermuda scene, it is obvious that the direction and health of the future of our economy depend to a very large extent on our ability to revitalise our tourist industry.

"This industry employs the great majority, one way or another, of working Bermudians. The Premier's timely appointment of a task force, under the energetic chairmanship of Mr. Mansfield Brock, to research and recommend courses of action to achieve this revitalisation, comes therefore as a creative and welcome step ahead.

"As it is abundantly clear that substantial changes and adjustments will be necessary to adapt to new and evolving market conditions, the successful implementation of these will be no easy thing.'' Mr. Trimingham said that the changes would affect everyone to some extent, but the dividend to the community as a whole would be a return to long term economic stability.

He continued: "In the short term we are faced with the coming winter months.

I think that by now most shareholders will be aware that an initiative to deal with this real and immediate problem has been formulated by the airlines, the Chamber of Commerce and the hotels, working with the Government.

"This initiative, if fully and effectively implemented, will certainly be a start toward alleviating some of the employment and debt servicing problems facing many Bermudians today.'' Praising efforts to "reduce the cost of Government'' Mr. Trimingham said he was encouraged but asked that tax cuts be made in areas that had an impact on tourism, referring to taxes on cruise line passengers.

"Curtailment of the Island's primary industry will only aggravate the already serious employment situation.

"The funding should be found, not by means of increased taxation, but by cost containment, reorganisation and streamlining elsewhere at all levels.'' Mr. Trimingham told shareholders that the bank had enjoyed a small improvement in net profit this year but this had been brought about by curtailing expenses.

He pointed out that the bank has had to set aside a further $4.1 million for possible future loan losses.

Mr Trimingham said: "I would like to assure you that each and every case is treated with what might be called expert concern and attention.

"The objective is always to manage each situation back to health or, on the other hand, to extricate both the bank and the customer, with the minimum possible adverse impact on all concerned.'' Chairman of the Bank of N.T. Butterfield, the Hon. Sir David Gibbons, yesterday warned in his annual report to shareholders that strikes and the threat of strikes were endangering tourism.

"Finding a solution to our labour/management differences has been Bermuda's most pressing problem for several years,'' said Sir David.

"We must find a way to replace mutual distrust with trust; mutual disrespect with respect. Unless we do, the result will be high unemployment and a very much lower standard of living in Bermuda.''