The Daily News. TUESDAY, JANUARY 20. DOMINION FINANCE.

Taranaki Daily News, 20 January 1920, Page 4

The Daily News. TUESDAY, JANUARY 20. DOMINION FINANCE.

The recent publication of last/year's banking returns and the particulars of the revenue and expenditure for nine months of the financial year furnish accurate evidence of the remarkable prosperity which the Dominion is enjoying. The outstanding feature of the banking returns is to be found in the deposits showing an excess of nearly thirteen and a half millions—over six times as much as was in evidence at this time last year—and the indications point to this plentiful supply of funds being maintained. If the principal figures relating to deposits are compared with those of the corresponding quarter, of last year it will be seen there is an increase of ten and a-lialf millions, and a similar amount in the four previous years, making twenty-one millions in the five years, the bulk of the increase being in free deposits. No better indication of the financial strength of the country could be furnished. It will be seen, however, that the advances show a reduction of over a million sterling, whereas prior to 1914 it was not unusual for the December quarter to show an excess of advances over deposits—in 1914 the excess was £529,708, and in 1913 £1,002,114. The figures since then are as follow:

Excess Deposits. Advances. Deposits. 1915 .... 29, ins,3o2 24,042,840 5,112,462 191fi .... 31,2(10,817 26,0(16,630 4,294,15T lftlT .... 32,274,317 31,000,315 1,274,202 l'JlB 35.003.P4", 33,073,061 1,030 TR4 1019 .... 43,560,075 32,106,756 13,463,219 Last year's excess apparently stands out on its own. The figures have a direct .bearing on the effect of the war on finance, and it would seem that a record sum of money is available for investment, but that the utmost caution is being exercised, or else rthe unsatisfactory state of Labor is closing up the avenue of industrial development. One of the pleasing features of the returns is the evidence given by the figures of the growth of the banking business, the. assets having increased sine 1913 by nearly seventeen and a-lialf millions, and the liabilities nearly forty-four millions. In six years the liabilities of the banks have increased •by about twice as much as the assets. It would seem that the j figures reflect the high prices of all commodities and the consequent enrichment of trade and commerce. Probably the least unsatisfactory item in the returns will be deemed to be that of the relation of note circulation to coin and bullion, inasmuch as the metal holdings are less in the last two years, but the paper currency is! largely held by the banks themselves, and it does not necessarily follow that there is a greater increase in the circulation among the public. At the same time the public, rarely see a gold coin, unless it has been hoarded, and there is no question that part of the present high cost of living is the outcome of the preponderance of paper money in circulation throughout the Empire. Apart from this, the returns show a gratifying financial condition, and it is evident that a plentiful supply of money is available. The statement furnished by the Dominion

Treasury, covering the financial transactions for the past nine months, as equally Satisfactory, the increase in revenue being £2,1265,821, and although the increase in expenditure amounts to £3,664,566, no concern need be felt as a far larger expenditure was authorised, and it is probable that the last quarter of the financial year, which is always the best from a revenue point of view, will show a satisfactory surplus—and all the money that can be obtained will be wanted in the near future. Meanwhile the public debt is increasing yearly, but little heed is being given to this handicap, which, however, is small by comparison with that of Britain, where it increased during the war by £157 10s per head of the population, as against Germany's increase of £l2B per head. The Dominion is faced with the necessity of raising large sums of money for development and other purposes. It is evident that capital is plentiful in Britain, but it is being utilised in industrial booms of exceptional magnitude, so that it is improbable any will be available for the Dominions except on unacceptable terms. Unfortunately these booms mean j higher prices for necessary commodities, so that in view of the cost of living soaring still higher, and wages rising correspondingly, j the Dominion needs its exceptiop- j al prosperity in order to maintain the people. Manifestly there must come a time when the limit will be reached, and those who look ahead cannot avoid feeling some anxiety. At present the outlook is alluring, yet it would be prudent for all to exercise economy and thrift, and those who do so need have no fear of the future.