BANKING RETURNS.

Taranaki Daily News, 4 December 1920, Page 16 (Supplement)

BANKING RETURNS.

INSTRUCTIVE FIGURES. REDUCTION' IN SUPPLY OF MONEY. Bl'T POSITION SOUND AND SATISFACTORY. Three months ago in reviewing these figure* we drew attention to the fact that the supply of funds held by the banks have attained a higher level than ever before. The excess of deposits over advances was then .€19,808.512. At the time we expressed the opinion that a reduction m this surplus was coming before long, and the latest figures show this reduction io have started already The surplus is now .£14,113,880, which is a fairly heavy one, and just a million leas than a year ago. The principal items of interest in the latest returns compare as follows with the figures of three months ago:

Sept., June, 1920. 1920. £ C Deposits, free .. 30,487,000 38,334,182 Deposits., fixed .. Ifi,G44.C!U 10.243,911 Deposits. f;,) V [. .. 7,527.835 8.37!)'.1G4 Note circulation 7,017,298 7,920 474 Discounts 1.825,807 1,332',393 Advances 37.191,941 33,457,188 Coin and bullion 7,710,010 7,740,848 Uovt. securities .. ((,202,023 0,358,007 Free deposits have decreased by £l,867,182, and advances and discounts together have increased €4,228,227. These movements are probably due mainly to the heavy importation of the last few months. With scarcity of goods, and fear of importing 100 heavily On high prices, slocks had got down'to a low • level. .However, for the first eight months of this year imports amounted to ,-€3:1.510,318, or live millions more than the full year 1919, and about double the pre-war standard. Note circulation has declined, but this is mostly in the amount held amongst the banks themselves. The actual circulation with the public is only €77,700 less than in the previous i|iiarter. We will now compare the latest figures Willi the corresponding periods of j previous years. Deposits siiow the fol-1 lowing movements in recent years: Sept. Free. Fixed. Total. qtr. € € £ 1920 30,187.000 10,0-14,094 53,131094 1919 30.331,318 15,011,508 45,372,880 1918 21.040.245 11,123,901 35,770,200 1917 21.507,821 14.139.810 35,707,037 1914 14,172,777 10,828,880 25,001,003 The total of deposits has increased .-€7,758,808 in the last year, and is over double the pre-war total. The major part of the growth is in the free class, which suggests funds lying idle waiting investment, or to pay for goods coming forward in time. Of course the increase mainly arises from the high prices realised for our produce, coupled with restricted importation. Importation is now increasing rapidly, and if prices for outproduce recede, we shall undoubtedly see a shrinkage in the total of deposits.

Already advances are affected by the increased importation, as will be seen by the following comparison: Sept. Advances. Discounts. Total, qtr. £ C £ 1920 37.191,941 1,825,807 39,017,50R 1910 28,785.870 1,303,903 30,149,773 IMS Ho.4o3.nnfi 1,242,938 31,(14(1,634 1917,- 27.117,992 1.297,400 28,415,452 1914 22,717,577 1,744,999 24,402,570 The increase in the last year is particularly heavy, and the increase in discounts is a noticeable feature. Of course, judged purely by the money standard all trade has increased considerably, and consequently requires more capital, and this is a very large factor in causing the above growth. Deposits and advances compare as follow for the periods under review: Sept. ■ Excess of Deposits. t Advances. Deposits. Qr. £ ' £ £ 1920 53.131,094 39,017.808 14.113.880 1919 15,372,880 30,149,773 15,223,113 1918 35.770,201! 31,040.034 4,123.572 1917 3."i.7n".fi37 28,415,452 7,292,185 1914 25,0i11,0ti3 24,4'02,570 539,08 V The surplus, though still a very large one, shows a reduction of £1,109,227 in the year. Following are the shares of the dill'erent banks in these deposits and advances: — Deposits. Advances. £ £ Bank of N.Z. .• 25,030,482 17.531,50!) Union flank 0,243,05!) 4,943,902 Bank of NXW. 0.823,74!) 4,448,402 Rank of Australasia 5,105,140 4,960,894 National Rank 8,250,000 6,440,258 Commercial Dank 1,072,004 080,423 feaeh bank shares in the growth in both deposits and advances, (iovernment deposits amount to £7,527,835, as compared with £5.995.305 last year, and the banks hold £0,208.023 of (iovernment securities as against £5,252,334 a a year ago. Metal holdings and' note circulation, the only other items of interest, compare as follows: Sept. Note Coin and Qr. Circulation. Rulliou. £ £ 1020 7.017.298 7,710.010 ]!) in 7.35 V ,047 8.010,0 V) 1!)18 H. 235.344 B.MOJ9S ]f)l7 5,050,889 8.318.501. 1014 2,0115*0 5.823.5V0 Metal holdings have dronoed back .0i,'15,455 in the year, but circulation has increased C2(i0.251. However, the circulation, apart fro niwhat is held amongst the banks, has an increase of C0V3.002. Increased wages anil the higher cost of goods are probablv the chief factors in this. The position appears sound and satisfactory at present front these figures. However, they give a clear indication (hut. a movement in the direction of a reduction in the available supply of money has started, and we expect to sec this movement in the now current quarter in a much greater degree. Importation is growing, and we have to finance our coining season's exports ourselves, and these two factors are going to cause a decided drain on the supply of fundi. However, the batiks buhl a very good amount of moiiev now. so '.here is no need to anticipate an acute sluirtuge.— Wellington Times.