The Daily News. THURSDAY, APRIL 22, 1920. THE FINANCIAL BAROMETER

Taranaki Daily News, 22 April 1920, Page 4

The Daily News. THURSDAY, APRIL 22, 1920. THE FINANCIAL BAROMETER

The quarterly returns made by the banks afford a reliable guide as to the financial position of the Dominion as a whole. The outstanding feature of the returns for the March quarter is the rise in deposits and advances, while each of the banks, as might be expected, show an excess of deposits, as will be seen by the following table : Banks. Deposits. Adrances. Now Zealand .. 24,200,112 15,024.089 Union .. .. G. 252,951 4.258,114 i New South Wales 6,723,901 3,017,707 Australasia .. 4,852,852 3,955,911 National ~ 7,77»,054 4,(183 209 Commorcial ~ 842 221 501,013 It will be noticed that out of the total deposits, amounting to £50,705,091 the Bank of New Zealand holds nearly one half, and that out of a total of advances amounting to £32,042,043, the same bank has a similar ratio. That the banks of the Dominion should hold on deposit between fifty and fifty-one millions sterling is sriking testimony to the wealth of the people, particularly of the producers, while the fact that nearly nineteen millions of this money is lying idle shows that not only are the hanks cautious in their advances, but that industrial development is not receiving much recognition. It is quite, possible that the mania for buying and selling property at largely enhanced values is reflected in the above figures, and the day may not. be far distant when the banks will have to take part in checking this speculation before it is too late to avoid the inevitable consequences. As an indication of the financial strength of- the country the bank returns are highly satisfactory, the more so as they correspond with the trade returns. There are few countries that, like New Zealand, can show such a gratifying position with regard to imports and exports. When a country's exports exceed its imports <til is well, and the larger

the difference in favor of the former the more reason is there for ; satisfaction. The value of the | Dominion's imports for 1919 is set down as £30,671,700, while the value of the exports for the twelve months ending February 29 last, is stated as £51,591,000, showing a difference of nearly 21 millions in favor of imports. If these figures are compared with the March quarter bank returns it will be seen that the surplus wealth of the Dominion is accumulating notwithstanding the high prices of all commodities. It may fairly be claimed that there has never been a time in New Zealand's history when such a large amount of money has awaited employment, and it is unquestionable that this money •cannot be put to better use than in developing the resources of the country, for the more this process is adopted, the easier will it be in the future to reduce the national debt. Development, as a potent lever in greater production, is so urgent that there should be no idle money. It is certain that were it not for the unsettled conditions surrounding the employment of labor there would be many avenues opened up for a profitable use of all available capital. Under these circumstances, especially in view of a vigorous immigration policy being adopted, it would seem that one of the matters to which the Government, should direct its administrative talent, is that of instituting a thorough inquiry into the best means of securing industrial harmony. With the assistance of the leaders of sane Labor it should be possible to evolve a workable scheme that would satisfy the workers and engender the confidence of the employers and capitalists. This would pave the way to the institution of secondary industries which would not only benefit the producers, but the community generally, and be a factor in solving the high cost of living. For the present the primary producers have every reason to be pleased with their returns, and the outlook is inspiriting, for the markets of the world are likely to be short of produce for the next three, or possibly five, years. The only disturbing elements are those of land speculation and depreciated currency. In connection with the latter it may be interesting to note that the paper circulation in 1914 amounted 1o £1,665.931 as against coin and bullion to the extent of £5,317,861, while in 1920 the paper money had risen to £7 ; - 765,560 and the coin and bullion to £7,807,212, a slight decrease over the previous year. The upward trend of the value of silver, and the reverse process in relation to gold indicate the unsettled condition of the world's money market, the effect of which is felt in New Zealand in the matter of exchange. Roth the Bank of Eng land and the Bank of France have raised the rate of discount, making money dearer, and indicating the necessity for solving the currency question, besides curtailing credit. While the Dominion is flourishing the Motherland is striving hard to restore the financial equilibrium. The effect will doubtless be that prices of goods will rise still further, hence the necessity for the utmost economy and production. The financial barometer is so extremely sensitive that its slightest variations have far-reaching effects. Dearer money on the London market will necessitate the Dominion's requirement being met locally.