The Guardian And Evening Starr with which is incorporated the West Coast Times. FRIDAY, JULY 16th., 1926.

Hokitika Guardian, 16 July 1926, Page 2

The Guardian And Evening Starr with which is incorporated the West Coast Times. FRIDAY, JULY 16th., 1926.

QUARTERLY BANKING RETURNS. The banking returns just issued reflect the state of our trading as a whole. Imports have maintained a high level, steadily increasing up till the end of March last, while the value of our exports for the season now nearlv ended was not maintained. but showed a decided decrease. The result of this is that the funds in the hands of the hanks have fieeq seriously (le r

pleted to pay for the excess of imports. Advances are still in excess of deposits, though not quite to the same extent as in the March quarter. The position is very different from what it was u year ago, after a record season. In the year deposits have shrunk by <nci £3,000,060, while advances have increased by nearly £5,000,000 a net change of practically £8,000,000 in the year. Deposits have increased in tho quarter which is the usual movement at this period resulting Irom realisations on our produce. Advances show an increase, but this is set oil by a reduction in discounts and the two together arc a little lower. The result of these movements is that advances are in excess of deposits by £445,393, which is £537,269 less than in the March quarter. However, a more interesting comparison is to be obtained by comparing the latest figures with those of the corresponding quarter of previous years, taking first the deposits for the past three months, which are as follows: June Free Dep. Fixed Dcp.

1926 27,594,496 20,674,853 1925 30,497,259 20,966,426 1924 28,336,760 19,292,552 1923 28,276,204 17,406,748 1922 25,046,473 16,342,413 1921 29,264,632 16,246,462 The 1921 and 1922 figures show the reduction due to the slump at that time following the excessive importation of 1920-21. After Dial there was a steady increase till a year ago, but the latest figures show a drop of £3,194,286, which is agaiu the result of over-importation, coupled with a drop in the value of our exports. With regard to advances and discounts which cover trading' conditions, the figures show that though from '1923 to 1925, the volume of trade was at a comparatively normal level, there has been a steady growth since 1923, and the latest year shows a big jump of £4,778,972, also the result of decreased exports and increased imports. Imports have started to decline now, but it will take some time before these figures can he improved, probably not till after the end of the year. As regards funds available from the banks for trading governed by deposits and advances, the supply and demand crux of the position,' the excess of advances for the June quarter just passed was £445,393. In the three previous years the excess of deposits ran into millions, so that it is not surprising there should he some stringency in regard to Funds. In the June quarter of 1921 and 1922 also advances were in excess of deposits, and the only other time this lias been the ease in the pas; twenty years was in 1908. In each case the cause has been a falling off in the value of our exports while our imports did not decrease quickly enough to respond to the consequent decrease in our purchasing power. This shows that as soon as a decline in exports comes, imports should at once he curtailed to respond to the lessened buying capacity, which is the inevitable result of a decline in exports. Tho returns as a whole reflect the position as regards our imports and exports. Our imports have been steadily growing, which was quite all right as long as our exports kept ahead, but now that exports have fallen off to less than the imports, the banks’ funds are seriously depleted. The same thing happened, only to a greater extent, in 1921, and in a smaller way in 19C8, and the conditions causing it were much the same in each case. The lesson to be learned is that importation must be kept within the limits of purchasing power, which is governed byexports, and, therefore, as soon as exports drop, imports must be curtailed. Although imports have started to decline, we cannot expect, says a financial critic, much, if any, improvement till next season’s export begins to bring in funds again, and even then much depends on the prices they realise.