FINANCIAL POSITION.

Hokitika Guardian, 12 July 1922, Page 4

FINANCIAL POSITION.

THE BANKING RETURNS

coxiWibNs- slowly, hut STEADILY IMPROVING.

RET UR TNG TO NORM AI

The liailkiiig returns for the June quarter are now available, and these show a fair measure of improvement as compared with Ihe position in the previous quarter' There is a slight shrinkage in advances and a fair increase in deposits. The figures for the March quarter, it will be remembered, did not show the measure ot improvement that is usual for that period, hut there is an improvement, and the position is steadily blit slowly getting better. Advances are now C1.7fi7.0t7 in excess of deposits; as compared with .£(>,130,92.3 in the Match quarter, and £8,874,392 a year ago. A reduction in this excess of advances of four millions in the year is a satisfactory achievement, and it is to be hoped that the improvement continues in this direction until the financial, position comes hack to normal.

Following is a comparison of the principal items with the figures for the p eroding quarter: June 1922. Mar. 1922 £ £

Deposits show a satisfactory increase of £1,028,490 and advances show a modest decrease of £33.7.882. Government deposits have increased. Note circulation has a slight falling off. but this all in the holdings of tlie banks, and the circulation with the public is iust ahead of last quarter, i These, however, are the movements in the last quarter only, and we will now compare the latest quarter with the corresponding quarter of previous years,, which provides a more satisfactory comparison. Taking first the deposits, we find the following fluctuations in the last few vears: DEPOSITS. .1 une

There is a heavy shrifikage ol i £4,122,208'in the year. This is due to the reduction in trade and prices generally. Iu the period of intla-ed prices and good times, deposits acre naturally inflated also, but are now coming hack to a more normal level. Advances also show decided’contract ion as will lie seen in the following comparison :

There is a very satisfactory reduction of £8,229,n0d in the year. This is largely due to reduced importation and thi' liquidation of the heavy stocks held a year ago. This movement also indicates a return to a more normal sta‘c of finance. The relationship of deposits to advances is shown in tiie following comparison:—

In 1929 the excess of deposits bail reached about its highest point, and it was just after this that imports began to pour into tile country far in excess of our requirements. Then prices for our main products fell, and the combined increase in imports and decrease in exports resulted in a heavy increase in advances and decrease in deposits. This movement was so drastic that it cause a change in the relationship of deposits a lid advances of over 28 millions in the year. It is verv pleasing, however, to see that tiie excess of advances is reduced by just over four millions in the last year. There is. however, need for a further reduction ill tiiis balance, and advances will have to come clown still more. This will come as stocks of goods are liquidated, and importation is being kept clown to a reasonable level, which will help this process. We are now in the slack season for exports and stocks of produce are steadily being cleared up, but as long as importation is kept within hounds we may expect to see a gradual restoratiiu or normal financial conditions. The principal other items of general interest in these returns are the note em ulations and the metal reserves, and these compare as follows: June Note Coin and

The metal holdings keep at a comparatively steady level, and the mild fluctuations are not of any significance. The circulation shows contraction in tiie year, due partly to reduced prices generally, ami probably partly to harder times. The circulation reached a very high level year, and the latest figures are well ahead of earlier returns.

In brief, these returns show that financial conditions are gradually, though steadily, improving. The bunks have still lent out more than the deposits they Hold, hut the excess of advances shows a good reduction in the year. It will he some time vet before money becomes more plentiful with the hanks, but given a tight rein on importing and reasonably good prices for the coming season’s exports, we may look forward to a steady movement in tiie direction of a restoration of normal financial conditions.

Deposits, free ... 25,0-10,473 24,138,740 Deposit's, fixed 10.312,413 10,221,044 Deposits, Govt. (;..() 10.714 4,500.149 Xote circulation 7,315,750 7,510.451 Discounts 1,717.01(1 1,739,138 A * 1 v f i neos 1 1,133,917 44.752,177 Coin and bullion 7,794,035 7.777.980 Govt. securities 5.105,555 5,288,801

Qr. Free. Kixinl. Tutal. c C C 1922 25,010,17:5 ID..112, .113 I1.:1ms,s;;o 1921 29.20i,0.'S2 1(5,210,1(52 1.1,111. no l IDL’D :h,;i.-,.i,i82 1(5,2 l.‘i,91 I ill,ill),s,()i):5 1919 2tf,252,5.«l T1,7.1:5,1! ID 1:1,005,9:50 191m 22.110,029 1:5.929. 1.10 .‘ID, 010.079

AI)\AN'Ci:.S. Jure A«lv :iihts. Misi omits. Tot:0. Ur. L t c 1 0-2‘2 1 1,-138,9'! 7 1,71.7.011! 39.1.7.7,933 \y.->\ A 1,1 19..72 7 2.937.9.79 r, r.:is.j.isii 1920 33. 1,77, l*s 1 ,332.393 :ii.7s9,jsi 1919 30.8S7.729 1,-722,977 32,1 10.7<>:i ins 31,5153.310 1.21 1.191 32.807,81:)

Tlxot'ss of ) mii> llt'posils. Ailvanccs. Deposits. (,)r. 0 e c 1022 41.888,880 .10,1.1.1 M3 *4,707 017 1021 1.1,.-,11,001 .11.28.1 480 *8.37-1 .302 1020 11.108,003 34.789 181 10,808 112 1010 • i:i,no.l.0:l() :i2. i lo 700 10,10.1 221 I01S :m,o-io,079' IV2.807 810 3,232 200 1017 37,200, l so 28,280 303 8,010 877 * Kxccs.s of iltlv lllOt'S

Qr. Oirrulntion. e Bullion. .e 1 0,00 7,.‘11 ■1,753 7,794,03-9 19:21 7,853,073 7.078,578 1920 0,904,307 7,740,849 1919 .9,99.1,(198 8,084,149 1919 0,151..19(1 9,089,038 1917 4,990,BO. 1 ! 9,000,208