THE BANKING RETURNS.

Press, Volume LVII, Issue 17118, 13 April 1921, Page 6

THE BANKING RETURNS.

(fßOit A SPECIAL COBBESPOMJXKT.) WELLINGTON, Anril 12. The banking averages for tho March quarter disclose clcany enough the nnantial tension that is being experienced in the Dominion at tho present time, compared with the averages of a year ago. The salient features of the banking returns may be suniariscd as undpr:— £ Government deposits decreased ... ... 2,443,641 Free deposits decreased 4,029'691 Fixed" deposits increased 520,002 Advances increased ....18,734,279 Discounts increased ... 1,670,020 Circulation increased ':.. 64,647 Coin and bullion decreased ... ... 144,655 It will be noted that while the fixed and free deposits decreased by nearly £4,000,000, the advances and discounts have increased by over £2,000,000, and apparently most of the borrowing from the banks has been for the purpose, of financing imports, the values for which have been abnormally high. Examining the deposits in detail we get the following:— March, March. Deposits. 1820. IBM.' £ £ £ Govt. 8,743,045 6,299,404 2,448,641 dec ,Free 154,814,896 30,785,205 4,029,691 dec. Fixed 15,850,195 16,370,523 520,830 inc., £59,408,836 £53,455,134 £5,953,002 dec. The only increase is in fixed deposits, and the expansion under that heading is a little more than half a million. Last year thero were increases in all classes of' deposits. The Government deposits were larger by £687,204, the 'free deposits increased by £10,451,215, and the fixed deposits by £1,365,050, and these figures make the change now exhibited all the more striking. The free deposits or-current accounts balances contracted to tho extent of £4,029,691,' and all the banks, except the Commercial Bank, suffered in this contraction,' as the table appended shows: — .■ . 1 March, March, Bank. 1920. 1921. £ £ £ N.Z. 16,179,667 14,729,044 1,450,623 dec. Union 4,497,173 8,580,255 966,888 dec. N.S.W. 4,235,607 3,604,128 631,479 dec. Aust'aia- 8,776,178 3,811,830 4G4,2°8 dec. Nat'al. 6,439,362 4,885,726 • 653,636 dec. Commer. 686,909 724,132 37,223 inc. £34,814,036 £30,785,205 £4,029,691 dec. Bank advances' make bank deposit?, and although the banks have advanced £20,000,000 more than in the corresponding quarter of last year, there is the actual shrinkage of over £4,000,000 in tho deposits. Obviously the credits have been transferred, and that could only be to pay for imports. Merchandise has com© in and the credit has gone out, and the merchandise has somehow to be turned into cash, and therein lies tho present difficulty of traders. Although the pain in fixed deposits is small, it is satisfactory* as showing that where possible savings are being . made. The movements ■in the - fixed deposits are as follow: — . March, March, Bank. 1920. 1921. • Inc. £ £ £ New Zealand 8,080,445 8,206,708 126,263 Union .; 1,755,778 1,796,402 46,624 N.S. Waleß .. 2.488,294 2,484,79,8 6,804 Australasia. .. 1,126,780 48,896 National .. 2,293,692 2,257,894 238,702 Commercial 155,812 •219,653 64,841 £15,850j195 £16,870,525 £520,830 The movements in the aggregates of the free and fixed deposits for the March quarter of each year beginning with 1914 aro shown in the accompanying table: — ' March ■ Free Fixed ■ . Quarter. Deposits. Deposits. Total- . '• . . £ : : ■ £ '.. ■' £' 19M' 13,475,771. 10,654,479 24,030,250 1915 .'. 15,958,732' 10,870,507 26,e29y839 1916 •'..- 19,091,949 12,182,104 31,274,06b. 1917 .. v 20,970,702 18,885,888 84,856,640 1918 ,* 21,614,302 .18,891,198 85,605,498 1919 .. ,24,368,681 14,485,145, 38,848,826 1920 ..84,814,696 16,850,195 60,665,091 1921 ... 80,785,206 16,870,625 47,165,780 As already stated, the advances increased by £18,734, ■ 279, or equal to about 60 per cent. This is an exceptional increase, and indicates the state of the money market at present. The figures of the several banks compare asunder: — ~ - Mar, 1920. Mar., 1831. Increase. . Banks. £ ■£ £ New Zealand 14,260,449 22,699,110 8,438,661 Union ..'4,235,478 6,4.18,679 2;198,203 N.S. WaUa 3,562,667 ,' 5,726,077 2,173,410 Australasia 3,842,074 5.755,197 1,911.063 Natianal .. 4 487,119 8,024,485 3,£67 356 .Commercial., : 404,089 877,655 478,586 ' . . 30,761,854 49;496,138 18,784,279 Although the increase in the advances is regrettable, because of the unfavourable inference to be drawn, the* figures are a great tribute to the banks, who have risen to the occasion, and have met the demands on them, almost to the full' extent, of their resources. < Had they not done so, the position to-day would have been very serious. During the war the banks increased their resources, for most of them 'enlarged their capital, .and'in other ways took care to add 'to iheir financial strength, and the, country has had the benefit of this forethought, Iho banks,have had tOvirefUße the demands of many borrowers, for which they have been vilified inside and outside of Port liament, but bankers cannot,lend beyond their resources and maintain soundness. It was very fdrtunato that the bank* were strong enough to meet the extraordinary call for advances that ftias been made upon them. The discounts have increased by £1,670,020, in which all the banks but one shared, as the table below discloses: — • '•■.•• Banks. £ , £ £ Mar.; 1920 Mar., .1921. Increase. 'Now Zealand 763,639 1,'968,480 1,204,791 Union ~ 42,633 91,554 ' 48,916 N.S. Wales 66,040 261,479 196,437 Australasia 113,837 274,893 160,666 Naliotodl ■.. 198,090 994,561; 96,'474 Decrease Commercial. 96,944 19,790 87,154 Increase. £1,280,188 £2,960,208 £1,670,020 The discount* and advances combined total' £52,446,341, as compared with £32,042,042 in the quarter of last year, an increase of £20,404, 299, which is an abnormal increase. Taking the fixed and free deposits together and the advances and discounts combined, the excess of the one over the other for Ihe March quarter of a series of years iB shown in the table following:— . f • March ■ Excess of quarter. Deposits. Advances, deposit*. 1914 .. 24,030,250 23,666,750 363,600 1915 .. 26,829,239 23,740,562 3,088,677 1916 .. 31,274,053 23,733,802 7,540161 1917 .. 34,356,540 27,694,930 6,661,610 1918 .. 35,505,498 29,317,896 6,187,602 1919 '.. 1920 .. 50.665,091 32,042,042 18,523,049 1921 .. 47,156,730 52,446,341 . •5,290,611, * Excess of advances. , There is a big change as comparqd with last year, when the Imperial Government was buying wool and meat and dairy produpe. The note circulation and coin and bullion are given below:: — March Coin and quarter. Circulation. , Bullion. £ £ 1914 „ 1,666,939 5,317,861 1915 .. 3,639,586 . 6,420,559 1916 .. 3,171,653 7,120,854 • 1917 .. 4,637,451 . 7,863,636 1918 .. 5,916,629 7,984,188 1919 ...6,612,191 8,075,!X)9 1920 .. 7,765,659 7,807,218 1921 ... 7,830,206 7,662,558 The circulation shows the modest increase of, £64,677, and indicates tho inelasticity of trade. The growth in past years has been exceptionally large. There is a shrinkage of £144,600 in the amount of the coin and bullion. No importance can be attached to this, liecause the banks hold considerabto amounts in legal tender notes. The position cannot be said to be satisfactory, but it is not critical or dangerous.