WELLINGTON NEWS

Hokitika Guardian, 20 January 1930, Page 2

WELLINGTON NEWS

banking figures

(Special Correspondent.)

WELLINGTON, Jan. 14

The banking returns for the past quarter were awaited with considerable interest, and now that they have been made available they ratner confound the more pessimistic who expected the figures to show a serious adverse condition, It can be readily admitted that the monetary condition to-day is not as good as it was 12 months ago, because there has been a sharp fall in produce. The salient features of the returns are that compared with the Dec. quarter of 1926 Government deposits have shrunx by £4i2.288, the demand or free deposits increased bv £546.7-16 and the time fixed deposits oy £1,146,581. These figures deal with tlie credit side of the public. Omitting, Government deposits the free and fixed deposits aggregated £53,356,733 as tompared with £51,661,4u6 in the December quarter of 1928, and £44,233,056 in ~920. Last quarter’s deposits were the largest on record lor the close of the year. This cannot by any stretch of imagination be regarded as adverse. The advances or overdrafts increased by the substantial sum cf £5,801,945, but the discounts decreased by £95,076. The advances and discounts represent the amounts borrowed by the public from the banks, and together they show an. increase of £5,708,827. This appears to he entirely due to theexpansion in imports. Bank advances make hank deposits, since tho net increase in bank advan.o compared with a year ago was £5.706,827 we should expect to see the. whole of it expressed in increased deposits, but the increase in the free and fixed deposits is only £1,659,327, so that we have to account for £4,051,100, If we examine the import figures it will lie seen that for the year ended Sept. 30th. 1929, the imports totalled £48,199,185 as compared with £44,140,492 an increase of £4,058,782 which more than accounts for the £4,021,500 excess of advances. It is possible to justify the expansion in imports. For tlie 12 months ended September, 1928, our exports were valued at £56,248,593, and the balance of trade that year was very much in our favour, that is to say we had considerable purchasing power. For the year ended September 30th. 1929, our exports were valued at £56,17-1,333 or only slightly less than in 1928, and although was still in our favour. There was justification for the increase in imports in the 1928-29 period, but with tlie fall:'in export"values it will now be necessary to restrict imports. Unfortunately importers have to make up their trend of economic conditions. It is rather a matter of regret that the incerase of imports during the past produce year was mainly in luxury items. In the nine months to September 30th. last the of. motor vehicles numbered 22,695, against 11,215 in the corresponding nine months of the previous year, anti the value was £3,279,932 against £1,681,311 an increase of £1,598,624; motor bicycles show an increase for the same period of £12,368. Motor tyres show an increase of £134,724, and other materials an increase of £42,712. American motors have boon dumped rather heavily and a crisis in the motor trade is hound to develop. If fewer motor cars are impoitecl during the next two years it will be a. good tiling for the Dominion. at all events the saturation point must lie nearly reached.

It becomes necessary now to greatly curtail imports which should not be a very difficult matter. This necessity arises from the fact that export values during the current year will be appreciably lower than a year ago. Mool has been falling ever since July last and many men with an extended experience of the trade believe that bottom has not been reached. Our exports of wool alone will realise about £4,000,000 less than last season, if the shrinkage is not more. Our other main products like meat and dairy produce are going back in values and there are not a lew who believe that prices will go lower especially for dairy produce. They contend that while the purchasing power of consumers has contracted the production has increased, and to stimulate consumption of the increased production prices must be lowered and brought within the purse limits of the masses. Stocks of merchandise which under normal conditions would not he excessive have now become so. Extra vga nee and waste must be cut out and hard work must now he our duty. It we don’t face the adverse conditions as they ought to he faced they will linger with u.s.