COMMERCIAL.

Patea Mail, Volume VIII, Issue 1005, 5 March 1883, Page 2

COMMERCIAL.

THE MONEY MARKET- , , It has been a common assertion lately that money is very tight,, and that the cause of it is’that the banks arc putting on the screw. The fact is true enough, but the cause assigned is by no means the correct one. From the last number of the Wellington Monthly Price Current, published by Mr S: Carroll, secretary of the Chamber of Commerce, it wilTbe seen that the advances made by the banks to their customers during the last two years have been steadily on the increase, and last December had risen froth £11,310,508 in December ISSOTto £15,512.8 IS, or £0,268,720 in excess of the deposits and circulation, which together represent what the banks owe their customers. 'As Mr Carroll remarks:—"lt will be seen that the demands of the public upon the banks hate been growing at an average of fully half a million a quarter, and as during the last six months the deposits - have been diminishing at about an equal rate, the result during that period has been to increase'the debit balance by about £1,000,000 per quarter. The excess of advances has never before stood so high as it dees in these rctiirns. We imagine That these figures will take some of our local, readers by surprise. They have been so accustomed latterly to hear of the banks ‘ putting on the screw,’ that they can scarcely-be prepared to find that the fact is the public have been, and still arc, bearing very heavily on the banks.” The real cause of the present tightness of money is more probably importation in excess of requirements, causing large sums of money to be unprotitably locked up. If this be so in course of a few months the evil will remedy itself in all probability, because the reports of an unfavorable state of the money market here will have had time to reach home, and to cause lessened shipments.