QUARTER’S BANKING FIGURES.

Hauraki Plains Gazette, Volume XXXVIII, Issue 5077, 19 January 1927, Page 2

QUARTER’S BANKING FIGURES.

Sir, —The Banking returns for the quarter ended on December 31 last call for careful study. In the comparatively short period of fifteen months there has been a retrogression of £9,813,626 in the financial stability o'f the trading community. On September 30, 1925, the excess of deposits over advances in the six commercial banks operating in the. Dominion stood at £2,778,065. The condition changed on June 30 last to an excess of advances over deposits of £445,392, and has jumped to the vast sum of £7,035,561 in similar relationship at, the close of 1926.. No optimist can close his eyes to the seriousness o'f the position revealed. Only once, since the close of the Great Wai were the last figures exceeded, and that was in the. June quarter of the fateful year 1921. Even a numskull in business knows that the interest charges on such stupendous borrowing must reduce the profits earned in. trade or agriculture. The spending rower in domestic commerce is consequently reduced until conditions are eased. A proof of this is already evident in the reduced note circulation shown in the 'returns. Bv adding the sum of £189,970 (the reduced amount in note-circulation) to the sum of £2,058,450' (the reduced amount to credit of free deposits) there is clear evidence that the prospects are not bright for an enhanced internal trade in the 'following months. Thq diminution in the value of our exports, has not been adequately balanced by a 'fall in imports. A reduction in imports is the major cure for the present unsatisfactory position. There are secondary influences affecting this matter to which attention will have to be directed. A halt should at once be called to all extravagance, and thrift —a lesson New Zealanders are loath t,o learn—must be increasingly practiced. STUDENT.