BANKING RETURNS

Dominion, Volume 9, Issue 2666, 11 January 1916, Page 4

BANKING RETURNS

The banking returns for the closing quarter of 1915 will be read with a great deal of satisfaction by the business community, as the figures disclose a position unprecedented in the economic history of New Zealand. The deposits—Government, free and fixed—show in the aggregate an increase of £5,364,302, as compared witli December, 1914, while the advances and discounts combined in the same comparison disclosc a shrinkage of £1,889,969. These movements mean prosperity. New Zealand is extremely prosperous, and that so far as we are concerned is one of the good effects of the war. It has been noted recently that the people are spending freely- and some cautious people are inclined to the view that there is a good deal of extravagance, but the banking figures seem to indicate that the community has the money to spend and is not outrunning the constable. The danger would bo if wo were spending money 011 imported goods and so transferring credit out of the Dominion. We arc not doing that partly because of the difficulty of importing merchandise. In the United Kingdom it is different., for there it is on imported goods mainly that money is spent, and as tile pay- ! ment involves transfer of credit it is seriously affecting the foreign exchanges. The expenditure in New Zealand is mostly transferring money from one pocket to another, and the country is neither richer nor poorer. Turning now to the deposits, the aggregates compare as under: Dec., 1914. Dec., 1015. Inc. .C £ Govt, deposits 2,418,515 3,030,015 012,100 Fme deposits 13,075,479 17,293,719 3,(i15,210 Filed deposits 10,727,020 11,801,582 1,133,902 20,821,041 32,185,940 The total of £32,185,946 is the largest in the history of New Zealand. The totals of the fixed and free deposits for a series of years show as under: Free Fixed deposits. deposits. Total. Doc 1911 12,934,404 10,490,G00 23,431,130 191 12,1C5,018 10,438,732 22,900,780 1913 12,293,875 10,545,345 22,839,220 191 13,675,47!) 10,727,620 * 24,403,099 1915 17,293,719 11,801,582 29,155,301 All the Banks exhibit increases in both free and fixed deposits, the Bank of New Zealand showing an expansion of £2,026,397 in free deposits and £548,782 in fixed deposits. Turning to the advances and discounts it is seen that the advances decreased by £1,532,089, the share of each institution being as follows : — Bank of New Zealand, £239,728; Bank of New South Wales, £312,878; Bank of Australasia, £1,007,499; and National Bank, £133,384. The Union Bank exhibits an increase of £124,241, and the Commercial Bank an increase of £37,149. The discounts are less by £357,870, in which all the Banks shared except the Commercial Bank, whose bill portfolio shows an increase of £5512. The .advances and discounts for the December quarter of a series of years are given in the table appended:

Advances. Discounts. Totals. Dcc •£ 1911' 21,388,049 1,802,351 23,1*91,003 1912 21,390,049 1,950,494 23,310,543 1913 21,820,740 2,014,589 23,841,335 1914 23,121,235 1,811,573 23,932,808 1915 21,589,130 ' 1,453,703 23,042,839 In 1912, 1913, and 1914, the -aggregates of the fixed and free deposits were less than the aggregates of the advances and Ciiscoun'ts, but for the past quarter the deposits exceed the advances by tho huge sum of £6,112,462. The Banks are overloaded with,credits, and it is very probable that a substantial portion of tho credits are being transferred abroad, where they would be useful to the Empire and profitable to the Banks. We_ have now to deal with the circulation and the coin, and these are best seen in the table appended : Circulation. Coin. I 1911 1,G95,1G0 5,30fi153 1912 1,712,400 5,237,707 1913 1,071,723 5,290,183 1914 2,014,232 0,209,113 1915 3,0D7,81G . 0,950,510 The note circulation shows an increase of £483,584, necessitated partly by the higher prices of commodities and partly by the increased expenditure of the people. The Banks, however, arc taking very good care to cover the note issue, and so we find tho coin and bullion have increased by £741,403, or £257,819 more than •the increase exhibited by the note |? circulation.'' The figures as a whole are exceedingly satisfactory. Before the war ends New Zealand will have added sonw hundreds of thousands to her credit, and if 1916 is to see 'the close of hostilities then we should be in an excellent financial position and able to face the afterwar conditions with confidence.