The Dominion. THURSDAY, APRIL 11, 1912. THE BANKING RETURNS.

Dominion, Volume 5, Issue 1411, 11 April 1912, Page 4

The Dominion. THURSDAY, APRIL 11, 1912. THE BANKING RETURNS.

The banking returns for the March quarter are now available, and the figures show very conclusively that, there has been a considerable amount of over-importation. The advances and discounts combined exhibit an increase of £;),229,1C50 as compared with the corresponding quarter of last year, while the fixed and free deposits together show an increase of only eCnJG,Bo6. As a, rule and under normal conditions the increase in deposits approximates to the expansion in advances, and since there is no such approximation in the figures quoted it is obvious that there has been u big transfer of credit, and such a transfer would be rendered necessary by excess of imports. We have received value, but the value is in mprchiindi.se, which must in duo course he converted into cash. Tin: aggregate of the assets is £:;1,-127,-I, r il, and the liabilities total the excess of assets over liabilities thus being £:!,'-'•':l,Tß:i. The liabilities of the Bank of New Zealand in New Zealand exceed the assets by i) 1,505.163, but all the other institutions show substantial differences in favour of thn iipscts- As already slated, the advances have expanded by

£:i,27-1,469, in which all the banks shared, as the table appended shows: March, Mare l -. Bank. T Vf^™*Xcw Zealand li.Tlip;, 5.0,'|, 7 0 ; , j,.£, 17 >.!>. Wales... '1,025,| 2;1 ;j.ORI,!KJJI «(i alii -National <.. 2,718,17.1 :i,117,:n7 .'IIiD.M 18,009,551 21,261,05:1 V'liM)

There has not been so large an increase, in any March quarter during the last live years. The nearest to it was m I9OS, when the increase was £.3,083,750, The discounts in the past quarter aggregated £1,8-15,-197, as against £1,790,80fi in the corresponding quarter of last, year, exhibiting an increase of £5-1,001. Increases are shown by the Bank of New Zealand, £03,200, Union Bank, £24,-145, and National Bank, £13,044. The, decreases were Bank of New South AY ales, £37,052, and Bank of Australasia, £8940. The movements in the advances and discounts for the March quarter of each of the past five years are disclosed in the following table: —

March Discounts. Advances. Total quarter. £ £ £ ™0S 2,095,795 18,512,310 20,638,105 WO!) 2,132,502 18,180,909 20,319,471 1010 1,815,317 10,178.128 17,993,415 1911 1,790,606 18,009,584 19,71(1,390 1012 1,845,197 21,284,053 23,139,550 Now we come to the deposits, and the three classes combined disclose a shrinkage of £.'545,740, which arises entirely through the decrease in the Government deposits. The fixed and free deposits show an increase of £546,856. The aggregates of the deposits compare as under: — March, 1911. March, 1912. £ £ Govt, deposits 3,165,614 2,273,018 Vnc deposits 12,971,315 13,641.116 fixed deposits 10,495,731 • 10,372,750 26,635,600 26,289,920 The Government deposits have decreased by £892,596, and it is interesting to compare the Government deposits over a period of years. The figures are as under: March . quarter. j> 1807 2,415,216 1905 1,718,902 1909 1,221,182 1910 2,336,167 1911 3,105,014 1912 2,273,018 The shrinkages in 1908 and 1909 followed _on the heels of the American financial crisis, and early in 1909 the ; Government had to retrench. It is to ■ be hoped that there will be no repetition of the experiences of 1909, although the banking figures show that the conditions arc very much the ' same as they were after the American I crisis. Now wo come to the free deposits or current account balances, and those show an increase of £GG9,831, in which all the banks shared, the proportions of the Union Bank and the National Bank being exceptionally largo. The figures of the several banks compare as under: — March, March, Jn--1911. 1912. crease. Bank. £ £ £ , New Zealand 0,101,005 6,415,751 311,74(1 Union 1,800,379 1,910,857 110,508 Js.S. Wales ... 1,038,585 1,655,057 16,172 Australasia ... 1,478,022 1,494,609 13,647 National 1,956,324 2,140,782 181,158

, 12,? M,315 13,6U,HG 009,831 The fixed deposits for. the past quarter amounted to £10,372,756, as compared with £10,495,731 for the March quarter of last year. There was thus a shrinkage of £122,975, in which all the banks, except the Bank of New Zealand, participated. The Bank of Now Zealand registered an increase of £101,409. The free and fixed deposits for the March quarter of five years are appended: —

Free Fixed March Deposits. Deposits, Total, quarter. £ £ £ 1008 11,534,879 9,553.694 21,088,573 1909 11,100,938 9,953,912 20,051,5R0 1910 11,585,410 10,570,352 22,155,7(12 1911 12,971.315 10,195,731 23,470,040 1012 13,0H,141i 10,372,750 21,0)0,902 The movements in the fixed and free deposits on the one hand, and the advances and discounts on the other, as compared with the figures of last year are extremely interesting, and in the table appended is shown how each bank has been affected : —

Deposits. Advances. Bank. £ £ New Zealand ... 410,155 inc. 1,513,41" inc. Union 03,258 ino 552,954 inc. N.S. Wales 13,903 inc. 319,404 inc. Australasia ... 109,563 dec. 461,138 inc. National 103,103 inc. 352.157 inc.

540,856 inc. 3,229,160 inc. In explanation of the above table it may be stated that in the past quarter the fixed and free deposits with the Bank of New Zealand increased by £410,155, while the advances made and bills discounted by the bank increased £1,513,417. And so with the other institutions, the Bank of Australasia _ showing a decrease of £109,563 in deposits, and an increase of £461,13S in advances, the aggregates for the five institutions being an increase of £546,856 in deposits, and an increase of £3,229,160 in advances. If we take the increases and decreases of the aggregates for a period of years wc get the following:—

March Deposits. Advances, quarter. £ £ IMS 41,480 inc. 3,083,730 inc. 1009 1,003,693 dec. 313,034 dec. 1910 2,070,882 inc. 2,3211,02(1 dec. 1011 1,314,281 inc. 1,80!i.!U5 inc. Ml 2 540,550iin:. 3,229,100 inc. The figures tell the history of the Dominion as clearly as possible. In the second half of 190?" the American financial panic was experienced, causing a big drop in the prices of commodities. The effects of that panic were felt in New Zealand in 1908, and thus we see an abnormal increase in the advances and a very minute increase in the deposits, in the following year the process of liquidation and retrenchment was in full force, and the deposits decreased by over a million sterling. In 1910 there was complete recovery from the depression caused by tho Americans, and in 1911 normal conditions were restored. We are bp.ek now to the conditions of 1908, and it is a question whether the recovery will be as speedy, as the position is complicated by the great coal strike, which has impoverished a section of our Ivscustomers. In spite of what, on the face of it, appear adverse conditions, the note circulation shows expansion, proving that the people do not as yet feel (he necessity for economy, or, if felt, are unable to economise. The circulation and metal reserve for the March quarter of live years show as under : — O-.in .March • Circiilalion, and bullion, qiuuler. £ ,r IHIW 1.n40.753 4!i:S(mß 19119 1,.-iS7,HSI 1,7i2.!i:15 I'.llu 1.U1K.121 5.077.1K1 1911 I.i;(il..|i;:l .->.ii:«i.7i;i 1912 1,708,8159 5.323,011 The need for care and caution has [.men so reprnledly emphasised during the nasi six months that it seems unnecessary to reiterate the warning. The bnnkinp returns indicate that the Dominion is likely to ex

perience a pinch, which may or may not. be of short duration, and while there is no warrant for alarm, there is much need for prudence and can fcion.