WELLINGTON NEWS

Hokitika Guardian, 16 April 1925, Page 4

WELLINGTON NEWS

ECONOMIC CONDITIONS

(Special to “Guardi*,n”.) WELLINGTON. April 11. 'l'liosc who claim to ho able to analyse the quarterly banking averages declare that the figures supplied -by the banks for the March quarter show that the economic conditions in the Dominion arc now normal, and that

trade conditions are not unsatisfactory. They further declare that the country has quite recovered Iron) the effects'of the slump of 1920-21, hut the recovery has been only just recently. Those decisions are arrived at by comparing the aggregates of the two class-

es of deposits with the totals of a year ago. The Government deposits are excluded from the comparison. Ihe lice deposits or current account balances for the Marcli quarter ei this year totalled 929.7G5.517. and in the March quarter of last year they were 928,t.TL !<>:». so that there was a gain <>f e 1 ..'1'd!).351, which means that the

spending rower is sit muth create! - The fixed deposits averaged for the past quarter 920.131 ,711. against an average of 918.597, Did for the March quarter of hist year, ait increase of Cl .55 1.5-1. ami this being fixed for a neriod the hanks have tins additional

amount with which to finance customers as need accommodation, and can provide the desired security. The banks are thus better supplied with funds with which to make advances than they were a year ago. I he increase in the fixed deposit is substantial and the opinion is expressed that probably a fair proportion of this represents loans raised by local bodies, portions of which not immediately needed for expenditure have thus been used to earn a little interest. If this is so it is a eommenda.hly prudent policy on the pari of local bodies. Ihe advances for the March quarter of this

year amounted to 912.020.950. as compared with 912,033,453. for the corresponding quarter of last year, a decrease of 9097.303. and the discounts were Cl.roUHd, against C1,770,(1!).'), a decrease of CO'),To I. The customers of the hanks have not found it necessary to borrow as much ns they did a year ago. which is an indication of improved economic conditions. Hut tueie aic some who regard this contraction in advances and discounts as unfavourable as it. they declare, discloses a lack icf enterprise, or in the alternative, a lessened scop- lor enterprise, liy way of striking a balance between til;, banks and the public the nggregiites of the fixed and free deposits are taken together and the advance.-, and discounts together and deductions made, hi the March quarter of lest ven r the de-posits amounted to CL .- (133.293. and the advances and discounts to 9M,403c>24. so ihat the former were more than the latter by 92,029.709. For ()-:• March quarter of this year the deposits amounted to C4!>,8ft7,22S and the advances and discounts to 913.730.202. the deposits exceeding the advances by the substantial sum of CS.IO'S.Oii!*.. •‘such comparisons make it very clear that conditions have greatly improved, and it is obvious that the improvement is due to the- hotter prices obtained for our primary products and particularly wool, a good deal of which was Mild in (be Dominion. The critics also derive <c>n-silk-ruble satisfaction from the note c irculation. which represents the money in the pockets of the people and required !>-■- them to pay inr their (huh needs, the average of tire note circulation for Ihe March quarter <>f this voar was 20.09!,0Hi and the average lor (lie March quarter id lasi year GO.GOO.tGO. showing an increase of CW8.077. Obviously the people are spending more. Of course it should he

borne in mind that the whole amount

is not :i<■ 1 11 :i!IV ill circulation for the* liiiiiK-i scverallv would he liol'liiitc the notes of other honks, mill therefore such notes would not he in oeitl.d er-,-..lotion. The honk in: ■; averages ore cert oi.dv \ -rv Mil isfm-lorv . TII.K MORATORIUM. The Moratorium Inis foded out ol sijrht. o.t oil events very little is heard of if. now. Dismal pronliesises os lo lira Hardship tliot would, follow the* lilting of the moratorium were mode m i’oi liomeul lust session, hut those predictions hove hoen Inlsdied olid discredit -d. It Wits always uuiiutoiued that those who had reasc.nahle securities Lo oiler could easily ohtoiu the required neenmmodatiim. olid it was only those who wonted to sorrow on i.dinted endues who v.ore .colly pushed. The niort- ■** and building societies Inrnish the hesfc guide in this mot ter. tit oil events so for its the city is concerned. There is undoubtedly o wood detnnud ter loon money. and this deinond must continue, for there is still o shortage ol houses Olid building operations must |,e pressed fonvsml. Ope mortgage company in V. ellington e - ued iis hoi onto sheet, during the post week and sDnvod that th.e year’s operations hod resulted in ilh-.mt C 10') more being available for distribution among shareholders. 'i his <o in pony has raised its dividend from h per cetii to i |ier cent. The diflieulties with these mortgage companies is not m lending money. l)ii tin iituhng money to lend. I here is sLrm.ni competition for deposits, and the inertgage (-onipanies could met till they require of these d posits it they could raise their interest rates, hut to <lo so would lie detrimental to business. j s t 0 l, e Imped it will he a lone time before a moratorium is again imposed on us. — bAt>u-7>'

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