The Dominion TUESDAY, JANUARY 14, 1913. THE BANKING RETURNS.

Dominion, Volume 6, Issue 1647, 14 January 1913, Page 6

The Dominion TUESDAY, JANUARY 14, 1913. THE BANKING RETURNS.

The banking returns' for the December quarter of 1912 are extremely interesting. Somo unusual and bj no means satisfactory features art disclosed. On this occasion 'wc have the figures of six banks to deal with,, the latest addition being fclu Commercial Bank' of Australia, which commenced business in"Wei lington on 'October 1. ' Tho outstanding feature of the returns is the enormous. shrinkage, in the deposits of all classes. Tho decrease aggregates ■ £1,307,287, ■ and the 'movement is ' shown in the table' appended:— Dec, 1911. Dec.', 1912 i Dwrte Deposita. £ . - ■'£ ", £, , Government '2,125,913 1,842,976' 782,935 Tree 12,934,464 12,408,048 466.4K Fixed ......... 10,496,606 10,438,732 87,934 , ". ■••■'. 25,557 i 043 24,249,7561,807,285 This is a very serious shrinkage indeed, and even , jf_ wo exclude! the Government deposits, .there :is a , falling off of £524,360, as compared with a year ago. The banks have had so muoh less credit available for tho accommodation of the pub- | lie, and in addition they have in- | created their advances and, dis-

lounts by £155,540, which is not a rory large amount. The advances md ■ discounts for the two periodE jomparc as under:— De 5.,1911. Dec., 1912. Incr'so. £ £-. £ Ldvanoes ... 21,388.649 21,396,049 ' 7.40 C Jiscouats ... 1,802,351 1,950,491 148,1K 23,191,003 23,846,543 155,54( Thus it will be seen that so far as bhe general public is concerned, the banks have had to find £679,89( more than last year. The decrease in the free deposits or current ac count : balances, amounting tc £466,416, requires some explanation; It cannot be attributed to tho backwardness of tho season, and ; the consequent decrease of exports,' fin whether we take the exports for the whole of 1912 or for the last quarter of the year, there is a substantial increase. For the twelve months the exports of tho principal products totalled £20,078,606,'ae against £17,594,965 in 1911, an increate of £2,123,641, whilo the fig ures for the> quarter show as nndcr: 1911, ' 1912., ■' £ ■ ' £' ''■' October 614,007 953;202 November .....U46.503 .1,148,091 December ... 1,285,122 1,704,810 .. 3,015,632 8,806,106 For the three months thcro Ash gain of £760,474, yet the free! de posits are less, and the advance! show a very minute increase. Wore the money withdrawn for invest ment in mortgages, or other sccuri ties, it would still be reflected Ji the banking returns, and we, cai only conclude that tho credits/hav* been transferred elsewhere, anditha indicates that the imports aro ex cessivcly large. When the r tradi returns for the year are available the position will be made clearer. Turning now to the advances, w< find some striking movements. Tin Bank of New Zealand'shows a bi| increase, the National Bank i Bmall oxpansion, and the Commer cial Bank of Australia accounts fo; an increase of £1914. The Jthrc, big Australian banks show de creases.' The figures of tho sovera institutions compare' as under: — Doc, 1911. Dec, 1912. i Bank. £ £ . £ N.Z 8,311,551 8,579,265 267,714 ine Union .... 3,682,198 3,676,802 5,396 dee N.S.W. ... 3,078,097 3,015,387 62,710 dec ; A'strTsia 3,273,534 3,077,232 196,302 doe National 3,043,269 3,045,449 2,180 inc Cora'rcial' — . 1,911 1,911 ino 21,388,649 21,396,049 7,400 inc There is a somewhat large inprcas in tho discounts, and apparent! the banks have found this class o ' business profitable. The aggrcgat of the discounts is £1,950,494, n oomparod with £1,802,304 in 4011 [an inoreasa of £148,140. .The fig

ures as they affect each bank arc as under:— Dec, 1911. Dec., 1912. Bank. £ :■. £ £\ K'i 898,970 1,031,467 132,497 inc. Union .... 211,537 208,507 2,97o'dec. N.S.W. ... 143,889 103,916 20,027 inc. A'strTsia 254,920 245,871 9,046 dec. National 293,038 800,670 7,632 inc. Coni'rcial — — -~ 1,802,351 1,950,491 148,140, Traders have apparently been obliged to discount their acceptances to meet their commitments; The shrinkage in the free deposits or current account balances' totals £466,416, distributed as under:— Dec.; 1911. Dec., 1912. . Bank. £ £ £ ■ < N.Z. 6,055,401 5,823,061 232,337 dec. Union .... 1,786,900 1,655,124 131,776 dec. N.S.W. ... 1,619,286 1,581,949 ; 87,337 dec. A'str'l'Bia 1,452,096 .1,349,801 "102,295 dec. National 2,020.781 2,019,776 ,28,995 too. Oom'rcial — 8,331.," 8,331 too. , 12,934,464 12,468,048 .466,116 dec. The decrease' is very litrgo, and somewhat disturbing. ■ What has become of the money? It is obviously not with the banks,in Now .Zealand, and'it is not \ in circulation, and the only conclusion that one'caniOomc to is that it has been transferred elsewhere, and most likely to pay for imports. _ The fixed deposits exhibit a shrinkage of £57,934, which is moderate, especially when it is considered that money is dearer now,' and higher rates than those allowed, by banks are obtainable on mortgage of firstclass securities. The' Union Bank and the Bank of Now' South Wales lost- in fixed deposits, but all the other institutions showed small gains. : A return that discloses the position pretty clearly is given bei low. The fixed and free deposits ' are compared with' the advances :— | ';. Excessof Deo. Deposits. Advances, etc Deposits. [ Or.' £ ' '■•■■'£ £ 11908 ... 19,422,053 21,423,751 2,001,698* 1909 20,761,241 :18,779,569 1,981,675 1910 ....... 22,663,318 ' 19,653,388 2,909,930 i 1911 23,431,130 : 43,191,003 240,127 1912 ....... 22,906,780 .23;346,543. : 439,763* . *Eicess o£, advances, It will bo seen that the advances exceed the deposits! by #439,763, and though the amount ,is a trifle compared with tho position in 1908,' the circumstances are different.. Tho earlier deficit was due to the American financial crisis ; disorganising the money markets, and : the trade of .the world, i'So far as'we wore concerned, it was a sudden' affair, and beyond our control, and the position was quickly adjusted when normal conditions wore restored. The adverse showing now appears to be the result, or extravagance, and the compulsory restriction ol Government .loan expenditure, due to'tho .depletion of the Public Works Fundi' by the late Government. The*position 'is one that must be faced, and no doubt it will be"met and overcome. •.''.",."',- : The note -circulation exhibits a slight increase, and coin and bullion aro less. , 'The figures undei these two Heads for five years comparo as under; — V ■: ''■'{ Note :' Coin 7'. ■ Deo. Qr. i Circulation, and Bullion, -< ". ■,/ i £ ' .'-. ■■-£ '. j. '.1908 ~:,'; 1,607,222 ' 4.585,756' i 1909 ..,. 1,673,955 5,090,845 1 1910 ..!....,. 1,649,928 ' 5,028,218 '■■ Ml ,i 1,698,160 5,351,953 : 1912 ',?...;...1,712,466 '. 5,237,767 The figures: as'a whole aro not very cheering:' The Exports are expanding, prices; for our staple products are excellent, .and yet-'the credit balancer of the customers of ■ the .'bank's are nearly half a,million less than tKey, were a. year ago, and the demancis-jon the banks: for accommodation have increased. It is a strange set of conditions, sufficiently so ".to 1 make one view .the-matter with £omo concern. Another conclusioh jx> be arrived_ at is that the banks' need fresh capital, _ and bankers themselves realise' this, for the Bank of New Zealand is to obtain authority .to', secure fresh capital, and no doubt the National Bank will' now put into effect the announcement made last ■ year, thai additional Bhare capital will be obtained. Tho Bank of Australasia is issuing fresh capital,, and some other,' Australian bankß are doing 'the same. :■".. ; -' ■/": . "-■ ',''■..