WELLINGTON NEWS

Hokitika Guardian, 18 October 1928, Page 2

WELLINGTON NEWS

TRADE RETURNS AND BANKING

CSpecial to ‘ Guardian.’’)

WELLINGTON, October 15

The trade returns for the Dominion for the month of September and the banking returns for, the quarter are decidedly interesting, for' the two are closely related and both returns reveal the economic coiidifions' dr the country. The end of September, is-, best for statistical purposes 'by the close, o the third quartet the year tilt sea-, son’s produce has all been shipped, and t.iere is very for.'pert, much of the except perhaps for - apniited quantity of butter is available shipment by' then. The exportsHoft th& year- ended September aSn'opntbd' .to £55,730.492, and this is a record for the Dominion, for the pretiohsytiighest was for the year ended Sept eraber-. 3oth, 1925 when the total y v , was £55,674,044. £06,448 more. Tast-year the exports amounted to £45,843,343 or £8,887,149 less than for the year lust closed. The imports totalled £44,126,958, against £45,992,934 last‘year, <the imports being less than m the past five years, except in 1923. The; trade yreturns never showed better results, for the balance of trade-was-never so. largely in Qur favour. The excess'of exports over imports amounted to, the huge sum of £11,603,534, that is our sales of merchandise to outside countries exceeded our purchases from outside by the sum named, and in no previous year were the figures so. satisfactory. In 1925, which was a prosperous year, the excess of export'sj over imports was only £5,049,000, or less than half the excess shown for, the year just closed. For the handsome results shown ipost of the credit is due to the man on the land, for he has increased his produc T tion under difficult conditions and has been helped to some extent by high prices. Now the question is what has become of the £11,603.534 excess of exports over imports, that is the country’s surplus, and we should he able tr acocunt for it. Let .us turn to the banking returns and we will there find the answer to the question. First it should be explained that the deposits are in effect the borrowings of the banks from the public, and the advances the borrowings of the public from the bank's! At the end of September last , year the deposits totalled £45,213,750 and the advances to £48,815,231, so that the public at the close of 1927 owed the banks £3,601,481. At the close of September this year the deposits amounted to £52,956,018 and the advances to £45,119,424, and’- the Jjanks, now owe the public the suifibf- £7,476,954, or in other words so far„as the public Is concerned the debit of oyer; three millions is converted into a credit of double the amount, and if the two are added together the total is £11,078,075, w r hile the excess of exports over imports is £11,603,534. There is still a balance of £525,459 to account for and that probably represents late shipments of produce in August and September not yet realised,.The economic conditions as revealed by the figures quotefl are so unusually excellent that one is puzzled to know why domestic trade is dull and why there is unemployment in the country. The spending power of the people has not decreased, on the contrary it has increased by about £1,500,000 and will go on increasing (for the next six months, and yet there is unemployment m the country. What is the cause? There must be a cause and that should be the subject of inquiry, not by peanut politicians but by economists and other trained experts. There is no lack of money but there is a lack of confidence and that is, rather a serious matter. INVESTMENT TRUST COMPANIES. The investment trust company originated in Britain but since the close of the war, it has extended'to the United States, where it is being boosted in the regular American style. The investment company may be described as a co-operative concern an,d operates on the adopted ..by insurance companies of spreading the risks, that is its investments;’- confining itself to no one country. About .tw'elve months ago there were upwards ‘of 130 of these companies operating in the British Isles, with a combined issued capital of £186,000,000.;;! ToStay -this total has grown to .£227j.0 x Q(),000,: and the number of companies to over 150. It was aii : fpbvi’pus that the idea would fipdvits way out to Australia and New Zealand. During the past three months the Were Investment Coy., sponsored: by J. B. Woi and Son, stock andvshasrebrokers, Melbourne, floated with a capital of Z. 1,000,000, and more recently the Australian Investment Trust Coy. with a prominent ex-banker as the manager, w r as floated and some of the shares in both concerns are believed to have been taken up in Nev r Zealand. At present the British and Dominion Investment Coy., with a capital of £500,000, promoted by Auckland interests, is being floated, and. the other centres are bound to do the same, for there is a good deal of the merino sheep about our business’Tn'eiV for what one does the other must imitate. However, these companies are thriving in Britain because they know how to manage such concerns, and all depends on management. Both sound management and good investments connections are essentia] to the well being of an investment trust company, and investors should fully satisfy, themselves as to the existence of these fundamentals before putting money into such concerns. The question for investors in New Zealand is whether there are men qualified to manage investment ti’ust companies.