THE PREMIER'S FINANCE

Gisborne Times, Volume XXVI, Issue 2218, 16 June 1908, Page 2

THE PREMIER'S FINANCE

When replying to critics who had declared that the Government had helped to bring about tho present tightness iu the money market by its borrowing operations within tho Dominion, Bir Joseph Ward quoted somo figures which are worthy of some special consideration/ He stated that the amount which the Government had borrowed in tho Dominion during the past five years amounted to only £1,966,000, whereas the increase in deposits in our commorient hanks for tilt same -period was £16,000,000. Tho natural inference to bo drawn from his remarks was that while the deposits in tho banks were increasing to such an extent the borrowing by tho Government of less than £2,000,000 could not have any very marked effect upon the position. AVhen speaking in Christchurch last week on tho same subject, the Premier went into greater detail, and mentioned that the amount of the deposits in the banks had increased from £69,393,2-50 in 1903, to £85,030,631 in 1907. Now tho banking returns published iu tho “Australasian Insurance and Banking Record” show that the amount of deposits in New Zealand banks for the March quarter of 1903 was £lB,448,179.,and for the same quarter of 1908 they totalled £22,837,476. These amounts are calculated upon an average of the deposits on hand for every day of the quarter, and it as therefore evident that to add the deposits of ono quarter to tho remaining quarters of a year is in effect to count tho same money four times, yet this is what the (Premier appears to have done, for in no other way can hie amount of £85,000,000 odd as the amount at present on deposit be obtained. As a matter of fact, the amount on deposit at the eml of the 'March quarter of the -present year was only £4,389,297 moro than that on deposit five years ago, an increase of less than a million a year. If tho banks actually held as deposits the huge sunn of £85,000,000 as stated by Sir Joseph AVard the borrowing operations of the Government naturally -would have hut an infinitesmal effect on the money market, but when tho total deposits are less than £23,000,000 the position is vastly altered. Then again the Premier has been urging that the banks are to blame for withholding money from circulation in the Dominion, but one lias only to men tion that whilst the actual amount on deposit at tlie end of March was £22,837,476, tho advances to clients at the samo •period amounted to £23,062,394 to realise how little there is in such a. contention. The figures 'really indicate that the banks have been particularly liberal in the matter of advances. It seems difficult to believe that' the Premier lias been wilfully misleading tho public, yet, on tho other hand, it is hard to understand how he has fallen .into such error in quoting tho hanking returns.