SUPPLY OF MONEY.

Taranaki Daily News, 16 January 1918, Page 7

SUPPLY OF MONEY.

AN ALTERED POSITION. FIUNDS DEPLETED, BUT BALANCE GOOD, (New Zealand Times). The banking returns for the last quarter of 1917 are now available for review. More than ordinary interest attaches to the figures for this period, as it is the first quarter to feel the full effects of the raising of the last war loan. As this quarter also experiences the heaviest demands for assistance in financing the gathering and moving of the season's produce, and as the shortage of shipping has caused vast accumulations of all kinds of produce waiting to be realised on, the figures exhibit material alteration in the amount of capital available Advances have grown four millions in the year, while deposits are only one million heavier, and the result is that the excess of deposits over advances is only £1,274,202, as compared with £7,292,185 in the previous quarter, and '£4,294,187 a year ago. Still, it speaks well for the general prosperity that there i 3 still such a good balance, as in pre-war days it was not at all an uncommon thing to see the 'balance on the other side of the ledger at this time of the year. In view of tjie size of the war, it must be admitted that the reduction in tie available amount of capital is comparatively small, and it is highly gratifvinw to see that the Dominion is capable of raising such vast sums internally with so little disturbance of the money market. The principal figures in these returns compare as follow with the previous quarter.Dec., 1917 Sep., 1917 £ & Deposits, free ... 18,498,717 21.587,8»1 Deposits, fixed .. 13,777,800 Deposits, Govt. .. 9,905,324 7,42»,712 Note circulation«, 464,694 5,650,880 Discounts 1,337,334 1,297,460 Advances 29,662.981 27,117,991 Coin and bullion 8,046,770 8,318,501 Gpvt. securities 5,069,912 4,816,948 The two classes of private deposits exhibit a reduction in the quarter of £3,433,130, while the Government account is £2,479,612 heavier as the result of raising the loan. Advances and deposits expanded by £2,584,883, due. as remarked above, to the accumulation of produce awaiting shipment. Nate circulation continues to expand steadily, which is due largely to the increased amount held amongst the ibanks ' themselves. The general increase in the banking business of the Dominion since the outbreak of war is demonstrated in the following comparison of the total assets and liabilities:— Dec. quarter Assets. Liabilities. £ £ IAT7 47.796.817 48,823,947 Ml 3 31,812,377 26,773,358 Increase £15,984,440 £ 22,045,552 Comparison of the latest figures can be made with tliose for previous corresponding periods, taking first the prlvnte deposits, which show the following movements: ■Dec. qtr. Free. Fixed, Total. 1917 18,496,717 13,777,800 32,274,517 IBM 18,031,7*2 13,229,075 31,200,817 1915 17,293,720 11,865,582 28,155,030 1914 13.675,480 10,727,620 24,403,100 1913 12/293,875 10,545,356 22,839,221 There is a satisfactory increase in the total of £1,013,700 in the year, rather more than half of which accrues in the fixed class, or interest-bearing deposits. The expansion in the four years, however, amounts to £9,435,296, or an average of £2,350,000 per year. Advances also exhibit considerable expansion in the same period, as shown by the following comparison:— Dec qtr. Advances. Discounts. Total. £ £ £ 1917 29,062,9181 1,337,334 31.000,315 1916 25,298,408 1.668,222 26,960,630 1915 2-2,589,137 1,453,703 24,042,840 1914 23,121,236 1.811,573 24,932,80!); 1913 21,826,746 2,014,589 23,841,335 Here the increase for thfr four years j is £7,158,980, or an average of £1,790,000 per year, but practically all the increase is in the last two years, and a clearance of accumulated produce would bring a very material reduction. The following comparison of deposits with advances is highly interesting:— Excess of Dec. qtr. Deposits. Advances. Deposits. £ £ £ 1917 32 274,517 31,000,315 1,274,202 1916 31,260,817 26,966,630 4.294,187 1915 29,155,303 24,042,840 5,112,46-2 1914 24,403,100 24,932,80!) *529,709 1913 22.839,221 23,841,335 *1,002,114 •Excess of advances. The surplus funds in the hands of the banks show a reduction of £3,019,985 in the year, but in the two earlier years compared here there was an excess of advances. The various hanks share as follows in these deposits and advances:— Deposits. Advances. £ £ Bank of N.Z 15,669,07(1 14,920,472 Union Bank .... 4,024,89.) 4.415,891 Bank of N.S.W. 4,503,018 3,665.370 Bank Australasia 3.035,191! 3 555,280 National Bank .. 4.727.774 4,237,773 Commercial Bank 314,558 255,529 This shows that two of the banks have lent out more than they hold in deposits. The?'; figures iill refer only to the private accounts. Government deposits amount to £9,905,324, or £3,546,460 more than year ago, while the banks hold £5,069,912 of Cofonial Government securities, as compared with £3,768,535 a year ago. The only other items of general interest are the note circulation and the holdings of coin and bullion, which compare as follow: , Note, Coin and Dec. qtr. Circulation. Bullion.1917 8464,694 3,046,770 1910 4,778,267 7,688,098 1915 3.097.815 6,950,517 1014 2,614.231 6,200,113 1913 1,671,075 5,290,183 The increases here are the effect of the war—the metal iioldings are being maintained at a good level, and the circulation continues to advance. The increase in circulation in the latest year is very heavy, but tlfta is very largely due to the amount of imcli hunk's notes held, by other banks, which !» about two millions, or nearly double the total of a year ago. The figures generally are satisfactory under the existing conditions, and though tile supply of funds available shows a heavy reduction, there is still a fair amount available. However, the future depends on the amount of shipping forthcoming to remove produce, and if this remains insufficient there may be further depletion of funds, and a firmer money market. There is also another war loan to he raised, consequently money is not likely to he very plentiful in the neat fut.itra.