BANKING RETURNS

Hokitika Guardian, 8 May 1925, Page 4

BANKING RETURNS

CM AMR LIT OF COMMERCE REPORT. CHI l LST CIIU RCI r May 5. At last night's meeting of the Canterhury Chamber of Commerce the fourth bulletin—“ The meaning of the Dan!; Returns'-'— wits submitted by the Kcononiic Committee. The report i omanenoetl: —“No series of figures officially published in New Zealand possesses more significance, either for the business community or f,,r individual members of the general public, ilnur the (|uartorly returns of the six hanks of issue operating within ihc Dominion. The regulations concerning these returns have long been out of date, and detailed figures are neither as complete nor presented as frequently as would be desirable, lint such information as they contain is indispensable to the interpretation and understanding <d changing conditions in the business votkl. IP.th import and infernal trade arc entirely - independent on the purch.i..ing power of the people. With changes in the baian e of the overseas trade the volume of this purchasing power expands and contracts, and. as it. does so. business becomes ar;iv>. or stagnant, ft is the bank returns which indicate these variations of purchasing power, and thus ~|,t. not only with a record of the changing volume of business in the past." and with the key to the present, but also with the best basis ; , bu.'in-ss lore-e.m of the future.” fjer dealing with the value of gold bullion as a reserve the report stated a- follows : .... “PURCHASING- POWER.*’ • •Tli,. amount of pun basing power jn the country varies directly with tbo net balance ol its overseas pn>ment.s.' A favourable balance increase's the buying power ol the public. ami. when this is made efle.-tive. iio-i'eases activity in business; an unfavourable balance of payments, on the other hand, decrerses the public's I,living power, and causes a falling nil' in business activity. Unis in

.Juno. 1020. after a period of high ex

perl | ri o.s and great prosperity, deposit- in New Zealand exceeded advances and discounts by £2.\d00.000; for the year ended March .'list 19’Jl. imports exceeded exports by £I!M " and heavy interest payments ovei'ccas. etc., added to the unfavourable balance so that, in the- -Tunc quarter. 1021. the whole £2*.000.000 of excess deposits were gone, and ,1cI’.yils were slight ily less than advance-. Il was this Midden contraction Ilf purchasing power, on the hand, and the surplus stocks ol goods on the oilier. Hint caused the great slump of 1021.” The report then proceeds to dtaw •i ~ •ntpar.i-o!) between hanking returns and the pun-ha-ing power of Hi,, people of the Dominion. There was at the present monetary su i a in New Zealand nothing to walnut undue optimism, the report continued. and on the contrary strong reasons might he given for believing that care and economy were still very ue'essury. The Dominion. during Hi,, p.-i two years, had lelldeil to-w-.irds over-importation, and in tlnee ,i -i .ic,. ..-mans had been saved a a Ci 'av.airah’.. bal: II e of everipaymciils only by tb- ri-.ing j..-; ... sonar of the principal exports. (V,; see" ili e instances th'V.e ol wool and meat were quoted. R')R ROWING. |ii i niuTii i .n. the Li: 11.• t-:>1 stated : "la addition tile level e.l !he Doliuuj,ui's ex pen.lit are during these years |, . a re -e I .an adorably by ! ul.lie !. ■ ...... j. e r aI r. ad, For the year IffiJT the ( ; :• i■ r 1111 . i • 11 1 Statistician estimalr« ‘Government. and local loans raised ahrotid to amount to £l l A U lO . This wa.s approximately equal lo the sum paid abroad in that year tor

interest ami redemption of public and local debt. It thus saved, lor that ye:>r. appro', inn. Inly Rill,tli!. 1 of j-.ttr.-haoing j.rwer which went to ili- , I-,..- a Ne.. Zeal.lll.l expemlit m e instead of meeting interest and capital payments due abroad. In greater or less degree this pro: the still goes on. In March.. 11)2-1. the net State debt ol the Dominion was £2hS.i::Hl,(!il(). or per lie: <1 <T goiml-it inn. ami altenlem in 1.-.milon has lately been dire, led to the unsound custom of harrowing.; Domini.ms who pay then iniere-l bill only by the tod I |i.-h loans. When this proeodure is ehe- ke.l. as Moll ii mu I be, the eolliliuticai C.f our pun basing puwer is likely Ii he scverly IT-11. Rut the whole is itself of great present importanceg' The icgori was laid on Hie table.