BANKING RETURNS.

Franklin Times, Volume 9, Issue 626, 22 April 1921, Page 5

BANKING RETURNS.

Sir, —The quarterly banking returns always afford solid food for thought. Financial experts, from time to time, attempt to explain the various phases and intricacies of economic questions, but the opinions of these men differ so widely and they themselves change their own positions so frequently that one is left in doubt as to whether after all they know much about the business. For instance, one of our financial magnates in speakiing of the inflated values, pointed out the danger of the expanding bank note circulation, and dogmatically asserted that in the interests of sound finance an appreciable reduction must be made, and yet in the 1920 session, inspired no doubt in large measure from the same quarter, a bill for an increase of about 50 per cent, on the note issue was authorised ay the Government. We have been told again and again by economists that there should always be more than sufficient coin in the banks to meet the bank notes issued, especially as the banks concerned solemnly promise to pay one pound sterling on demand for every pound note. On March 31, 1914, the note circulation amounted to £1,665,939, with coin in the bank coffers £5,317,861. On December 31, 1917, the note circulation was £6,464,695 and the coin and bullion £9,999,391. On March 31, 1921, the note circulation had increased to £7,830,204 and the coin and bullion had decreased to £7,662,555, thus showing an increase of £1,365,509 ’in note circulation since December 31 1917, and the disappearance of £2.336,836 in coin and bullion. That is the banks now hold that amount less than they did on December 31, 1917. It is surely a legitimate question to ask where that vast amount of gold, plus what has been taken out of our mines for the last six years, has gone to. Now and again we read of a Chinaman being arrested on leaving New Zealand and a score or so of sovereigns taken from him. If the authorities are so keen on the scent for a few sovereigns, how came they to overlook about twenty tons weight of gold and silver which has evidently been sent out of the country during the period referred to.— I am, etc., MAX D. KING. Manurewa.