BIG BANK ADVANCES

Dominion, Volume 14, Issue 169, 13 April 1921, Page 8

BIG BANK ADVANCES

HEAVY DEMANDS FOR ACCOMMODATION

ADVANCES AND DISCOUNTS INCREASE BY £20,000,000

REVIEW OF QUARTER’S FIGURES

Tho banking averages for the March quarter disclose clearly enough the financial tension that is being experienced. in tho Dominion at the present time. Compared with the averages of a year ago the salient features of the banking returns may be summarised as under: —

Government deposits decreased ... 2,443,641 Free deposits decreased Fixed deposits Increased 520,002 Advances Increased , 1».73«,279 Discounts Increased Circulation increased »4.647 Coin and bullion decreased 144,655 It will bv noted that while the fixed and free deposits decreased by nearly £4 000,000 the advances and discounts have increased by over .£20,000,000, and apparently most of the borrowing from the banks has been for purpose of financing imports, the values of which have been abnormally high. Examining the deposits in detail, we get the following :—

Mar., 1920. Alar., 1921. Government 8,743,045 6,299,404 2,443 641 dec. P?ec ....34.814.896 30.785 205 4,029,691 dec. fixed - 15.450,195 16,370,523 520 330 inc.

59,408.136 53,455,134 5,953,002 dec. The only increase is in fixed deposits, and tho expansion under that head is a little more than half a million. Last year there were increases in all classes of deposits. The Government deposits were larger by £687,204, the free deposits increased *£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 account balances contracted to the extent of £4,029,691, and all the banks except the Commercial Bank suffered in this contraction, as the table appended shows:—

34,814,896 30,785,205 4,029,691 dec. Bank advances make bank deposits, and although the banks have advanced .£20,000,008 more than in the corresponding quarter of last year there is the actual shrinkage of over .£4,000,000 in the deposits. Obviously the credits have been transferred, and that could only be to pay for imports. Aferchandisc has com* in, and tho credit has gone out, and the merchandise has somehow to be turned into cash, and therein lies the present difficulty of traders-. Although the gain in fixed deposits is small, it is satisfactory ns showing that where possible savings are being made. The movements in the fixed deposits are

15.850,195 16,370,525 620 330 The movements in the aggregates of the free and c *fixcd deposits for the Afarch quarter of each year, beginning with 1914, are shown in the accompanying table:—

As already stated, the advances increased by £18,734,279, or equal to about 60 pet cent.; this is an exceptional increase, anil indicates the state of tho- money market at present. The figures of the several banks compare as under:—

30,761.854 49,496 133 18,734.279 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 (he war the banks increased their resources, for most of them enlarged their capitals. ar.;l in other ways took care to add to their financial strength, and the country has had the benefit of this forethought. The banks have had to refuse the demands ~<f many borrowers, for which they have been villified inside and outside of Parliament, but bankers cannot lend beyond their resources and maintain soundness. It was very fortunate that the banks were strong enough to meet the extraordinary call for advances that has been made upon them. The discounts have increased by £1,670.020, in which all the banks but ono shared, las (the (liable bek/w discloses:—

1,280.188 2.950,208 1.670.020 inc. The discounts and advances combined total £52,446,341, as compared with £32,042,042 in the corresponding 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, tho excess of the ■ one over the other for the Afarch quarter of a series of years is shown in the table following:— T/Xces? of

There is a big change as compared with last year, whei. tho Imperial Government was buying wool and meat and dairy produce. Th.v note circulation and coin and bullion are given below:— Coin

The circulation shows the modest increase of £64.647, and indicates the inelasticity of trade. The growth in past years has been exceptionally large. There is a shrinkage of £144.055 in the amount of the coin and bullion, no importance can be attached to this, because the banks hold considerable amounts in legal tender notes. The position cannot be said to be satisfactory, but it is not critical or dangerous. A duty is imposed upon every-

one to do his and her best, to brin about an improvement, and to this end we must endeavour to increase production through efficiency, produce only what is needed, consume only what is necessary; maintain public confidence; encourage conservative investments; prevent abuse or over-extension of credit; practice economy; reduce cost of living: and put an end to Bolshevism in this country.

Mar,. 1920. Mar., 1921. £ £ N 7. 16.179.667 14.729.M4 1.450.625 dec. Union 4 497.175 5.530,255 966,888 dec. N.S. Wales... 4,235.607 5,604.128 631.479 dec. Australasia... 5,776.178 5 511.890 464,288 dec. National .... 5,439.362 4,885.726 553,636 dec. Oommcrcia.1... 686.909 724,152 37,2575 ino.

shown, below: — If ar.. 1920. Mar.. 1921. Inc. Bank. New Zealand. £ .. 8.080.445 £ 8.206.708 £ 126.263 Union .. 1.755.778 1 796.402 46.624 N.& Wales ... ... 2.488.294 2.494.798 6.504 Australasia . .. 1.076.674 1.1251570 48.896 National ... 2.293.692 2 527.394 233.702 Commercial ... 155,312 219,653 64 341

Free Fixed Mar. deposits. deposits. Total. qr. 1914 .... £ .. 13.475,771 £' 10,554,479 £ 24 030,250 1915 .... ... 15.958,733 10.S7d.507 26,829.239 1916 .... ... 19 091,949 12.782.104 31,274.053 1917 .... .. 20,970.703 13,381. .838 34,356,540 1918 .... ... 21.614.302 13,891,196 35 505.498 1919 ... ... 24.363.681. 14.485.145 38 848,826 1920 ... ... 34.814.896 15,850,195 50,665,091 1921 ... ... 30 785,205 16,370.525 47,155,730

Mar.. 1920. Mar.. 1921. Inc. £ £ £ Knw Zealand 14,260,449 22.699,110 8,438,661 Union ,. 4.215.470 6.413,679 Si 198.203 N.S. Wales . .. 5 552.667 5,726.077 2.173.410 Australasia.. 3,842,074 5,755,127 1,913,053 National .. 4,487.119 8,024.485 3.53/,366 Commercial. 404,069 877,655 473,586

Mar.. 1920. Mar., 1921. Bank. £> £ ’ £ N.Z 763.639 1,968,430 1,204 791 inc. Union 42.638 91.554 48,916 inc. N.S. Wales 65.040 2*61.479 196 437 inc. A list rala Ria 113.837 274 393 160.556 inc. Nation a 1 ... 198.090 294.564 96 474 inc. Oommcrcial 96.944 59,790 37,154 doc.

Mar. Deposits. Advances. deposits. nr. 1914 ... £ . 24.030.2.50 £ 23.666 750 £ 363.500 1915 ... ... 26 829.219 23.740.562. 3.093.677 1916 ... ... 31.274.053 23.733.892 7. MO. 161 1917 ... .... 34.356.540 27.694.930 6.661.610 1918 ... . 35.505.493 29.317 896 6.187.602 1919 ... 39 8.18.826 32.203.W4 6.645.182 1920 ... . .. 50 665.091 32.042.042 18.62.3.049 1921 ... ... .17.155.730 52.446.341 *5,290,611 •PIxeeeB of advances.

Mar. Circulation. and bullion. quarter. £ £ 1914 ... 1.6r.6.939 5.317 861 1915 5.639.585 6,420.559 1916 3.171.553 7 120.8=4 1917 .... 4.457.451 7.863 635 1918 .. 5.915 529 7,984 188 1919 . 6.512.191 8 075.999 1920 .... 7.765.559 7.807.2.13 1921 7 630.2C6 7,662 558