The Dominion. SATURDAY, OCTOBER 15, 1910. THE COMMERCIAL BAROMETER

Dominion, Volume 4, Issue 948, 15 October 1910, Page 4

The Dominion. SATURDAY, OCTOBER 15, 1910. THE COMMERCIAL BAROMETER

The banking returns for the > September quarter are of-special interest because September happens to be the close of.the produce-year. The Dominion has balanced its accounts for oxports and imports, and-for all the other items that make up international exchange and the banks reflect the, position. Broadly stated Now Zealand shows a - oohsidorablc economic improvement as. compared with a year ago. The fixed and 1 free deposits . show an increase - of £2,273,435, and if we . include the Government deposits tho increase -is £2,696,020. The greater portion of this expansion is shown in the free deposits or current'account balances, the actual increaso being £2,219,332. There is an abundance of money, but the banks can-find no adequate Outlet for it,' for tlie advances and discounts combined amount to £18,177,596, as compared- ■: with £18,170,707, an increase. of less than £7000. ; With all this money lying to the credit of the farming and mercantile community it would naturally be supposed that there would be some increase of industrial activity, but unfortunately New Zoaland just now appears to be a place where wealth accumulates, and industries, except-the. primary industries, decay. Turning first to the liabilities and assets, the position of each bank at the close of the quarter is disclosed in tho table appended:. ' Liabilities. Assets. Bank. '.' £ £ New Zealand 13,841.009 11^73,228 Union ; .3,379,424 4,176.124 N.S.; Wales 3,540,278• 3,564,989 Australasia .'. 2,155,566 3,390,451 National 3,814,650 ' 3,730,249 • V " 326,730,827 : '.26,135,041 It will be noted here that the-assets of the Bank, of New Zealand in the Dominion fall short of tho liabilities by. £2,567,781, and tho obvious in-ference-is that tho bank, finding no outlet horo foi; tho funds at its disposal, has sought investment elsewhere, most likely in London where tho rates for short loans are just now very attractive. The bank is, of course, justified in doing this, and what is to be .regretted is that it should bo nooessary to transfer so large' a sum for investment outsido our own shores. The advances for the past quarter totalled £16,527,090, comp&tcd with £10,303,281 for the

same quarter of last. year, ail, increase of £133,809,. in which all, the banks except the Bank of New Zealand shared. The figures of each bank show as under: Sop., 1909. Sep.. 1910. ,\ Bank. £■ • £' £ New Zealand.... 6,258,115' 6,171,364 86,751 dec. Union 2,952,913 3,032,263 79,350 ino. N.S. Wales ...... 2,288,122 2,328,229 40,107 ino. Australasia 2,509,693 2,570,837 61,144 inc. National 2,384,438 2,424,397 39,959 inc. : .16,393,281 16,527,090 inc. The discounts exhibit' a shrinkage of £126,920, the, aggregates being £1,650,506,a5y against £1,777,426. Comparing the' figures of each institution we get the following: Sep./1909. Sop.', 1910. Dec. Bank, :■£' £ . £ New Zealand 833,296 • 795,327 I 37,969 Union '.. 207,697 190,695 17,002 ■N.S. Wales .....1.;.... 217,071 188,264 28,807 Australasia 246,612 224,051 22,561 National 272,750 252,169 20,581

Sep./1909. Sep., 1910. Dec. ;•£' £ ■ £ .... 833,296 ■ 795,327 i 37,969 .... 207,697 190,695 17,002 .... 217,071 188,264 28,807 .... 246,612 224,051 22,561 ~.. 272,750 252,169 20,581

1,777,426 1,650,506 126,920 ■Taking s period of seven; years and comparing 'the' aggregates' of the. advances and discounts it will be seen that the advance's aire a little more than they were in 1907, . which was one of the most: prosperous years experienced' in New Zealand in recent times,'while they are nearly two. and a half millions less than in 1908,\ which'was a year, of depression. The figures are as under: ' Sop. 30. ; Advances. Discounted Totaled ' £ : ' ■£ .'. ■ . 1,1904 : :....... 12,463,933 ■' 2,030,626 14,494,559 1905 13,258,897 2,107,623 15,366,520 1906 14,600,765 , 1,972,126. 16,572,891' 1907 ................ .16,498,032 2,000,152.: 18,498,184 1908 18,947,991 2,269,968 21,217,959 1909 16,393,281 : 1,777,426 v 18,170,707 1910 16,527,0901,650,506. 18,177,596 The discounts are the lowest for . the seven years and the tendency will continue towards shrinkage unless •we experience a, period, of extreme activity iin, domestic trade. :' ; > Turning now to the deposits the. comparison for; two years is' as under: - v ' .'Sep., 1909, Sep., 1910. ■■ £■ * Govt, ; deposits 1,429,034 '• 1,850,619 Free deposits ....v..... 10,530,370 '. 12,749,703 i Fixed deposit®. ............ 10,448,750 ' V 10,394,647

■■■■;• -- i V . 22.407.154 24,994,953 As already stated : the freb deposits' havo increased by £2,219,332, and of' this tho•" Bank of New Zealand is responsible for; £1,042;535. the Union Bank secures £312,089, tne Bank of Now South Wales £313,919, the Bank of. Australasia £234,218, and the National Bank £316,571. Thus there is a general improvement which is very satisfactory; .' • The': fixed deposits ex-. hibit a decrease of- £54,103,'„ and .the individual figuresjproyide an interesting., comparison: .- :v. -. ; ;T.- * 50p.H909. Sep., 1910. V,'.:. Bank. " ■'': £ . i": -Sew Zealand.;. 5,297,887 5,107.739 190,148 dec. ■Onion .1,30t,035 1,122,569. 118,534 ino.' N. 8.: Wales . 1,693,457 ,1,706,313112,856 ino. Australasia",,.. 621,098. ~656,666 '35,468 inc- . 1,632,273,1,501,460; 30,813 deo. Vy..?;; 10,448,750 i 0,394,647 . 54,103 dec.. It ■ will bo - noted ■ that ■ the. two; New Zealand banks exhibit decreases, 'while th 6 .three 'Australasian;institutions'show, increases; the expansion shown by tho Union Bank being particularly; large. ..Dealing with the fixed- and free deposits ior a poriod of; seven years we get the following: ■ ; j." Sep; 30; ;■ ■ Freodep. ■. Fixed dop. T'l/dep. f: 1954 .—; 8,996,885 8,950,358 17,947,243 1905 ;, 9,180,049 -. 9,493,943 18,673,992 1906- 10,660,559 ' 9,950,802: 20,611,361 1907 ' 11,957,200 9,697,803 21,655,003 1908 10,412,558 . 9,897,443 . 20,310,007 1909 10,530,370 ' \10,448,750:',^20,979,120' 1910 ~l|. 12,749,702: -10,3941647 i 23444,349 At no timo ha£ there been so much private; money - lodged '.with the. banks,' and undor normal conditions .thero ;should now -bo extreme activity; but 'there is apparently still -..a '.-Want ; of confidence and' tlio.money is stored: instead; of r being used to develop; tho great resources -of : l|ew Zealand. Another table 1 showing Jjhc accumulation of credit, is obtained by comparing: the aggregates of tho de-j "posits with' tho totals of advances and discounts.The' ; ; table 'is appended : . Deposits. .AdTancos. Excess of Sep.3o. . deposits.. ' ' 'A-- : £:M: 1904 . 17.547,243 : 14,494^59. 3.452,684 1905 18,673,992 -:. 16,366,520 3,307,472 . 1906 > 20,611,361 16,572,891 . i 4,038,470 1907,;21,655,003 18,498,184 -. .3,156,819 1908 ' 20,310,007 21,217,959 .:' ■ 1909 20,979,120 '.18,170,707 - 2,848,413 1910 v 23,144,349 -18,177,596 '.4,966,763, The banks haves nearly fivo millions more money than they have been able' to find investment • for—that,; is ' the"; difference 1 between the amount'borrowed and lent to .the public. In 1908 tho public was* indebted to the banks to the oxtent of £907,952; The circulation .--shows«.a - very '■ fair, increase over\ the corresponding quarter, proving that there is • an expanding, .' tendency in; ■ domestic trade. There is also a small increase in the coin and bullion. The figures for seven years under these two heads compare as under: - .■ Circulation. Ooin and Sep. 30. -\' ■ . bullion. - V::. £ . 1904 :■ u 1,429,538 ' 3,521,930 1905 1,427,547 /■; 4,022,318 1906 1,552,682 '.-'- ; 4,727,953. 1907 : 1,594,661' ■ 5.003,839' 1908: .1,545,816 ... 4,881,637 1909 a,525,553: 6,028,490 1910 ........... 1,590,544 : 6,042,277 The circulation is larger than in any year except 1907, when a record was established.;- Taking; the figures in cheir entirety they show clearly enough that there is plenty of money available,'.and it is also ; evident that, the ownor'sof the idle credit 1 are uh-: willing or unable to find suitable investment. ..In a young country, like this the scope for investment should be practically unlimited; and so it is, .'lut' tho wanti of: confidence and distrust that prevail have, for tho present at least, placed-, a check on enterprise. -