8.—16.

Although the statistics quoted below may have been influenced to some extent by the fluctuations in prices which occurred during the year, there can be little doubt that, taken collectively, they indicate a considerable increase in business activity.

Despite the increase in business activity, easy money conditions prevailed in the Dominion during the whole of the year. The State accounts were always in funds, and there was therefore no need for the Treasury or any other public Department to borrow from the Reserve Bank. The trading banks likewise maintained balances at above the levels required by statute, and they also were not obliged to ask for accommodation. In addition to their balances at the Reserve Bank, the trading banks held Reserve Bank notes and silver coin, these three holdings combined forming their cash reserves in New Zealand currency. Over and above these cash holdings, they held substantial amounts of London funds in respect of their New Zealand business ; and, in accordance with the provisions of section 16 of the Reserve Bank of New Zealand Act, 1933, such balances, to the extent to which they were held in liquid form, were available for immediate conversion into New Zealand currency at any time. The position of the banks as disclosed by their statutory monthly returns was as follows : —

NEW ZEALAND TRADING BANKS. Monthly Return under Section 46, Reserve Bank of New Zealand Act, 1933. (000 omitted.)

Since the passing of the Banking Amendment Act, 1935, the totals of the trading banks' holdings of New Zealand Government securities in the Dominion have been added to their monthly returns. As these securities, which amounted to over £5,000,000 at the end of March, could in case of need be pledged as collateral for advances from the Reserve Bank, their existence has a bearing upon the financial situation. The figures given above indicate a state of liquidity of the banking system of the Dominion throughout the year. The fact that the total of the trading banks' advances at the end of March was only very slightly in excess of the corresponding figure a year before may therefore be taken as indicating the absence of demand for additional accommodation on the part of satisfactory borrowers. This position is further evidenced by the fact that the overdraft rate has never been lower during the present century.

5

Year ended Year ended Percentage 31st March, 1935. 31st March, 1936. Increase. (000 omitted.) Exports (excluding specie) .. .. £(N.Z.) 44,918 £(N.Z.) 49,676 10-6 Imports (excluding specie) .. .. £(N.Z.) 32,568 £(N.Z.) 37,440 15-0 Sales tax .. .. .. .. £(N.Z.) 2,171 £(N.Z.) 2,468 13-7 Bank debits (excluding Government) .. £(N.Z.) 665,322 £(N.Z.) 712,809 7-1 Building permits (main towns).. .. £(N.Z.) 3,093 £(N.Z.) 4,988 61-3 Railway revenue .. .. .. £(N.Z.) 5,908 £(N.Z.) 6,244 5-7 Number of passengers — Road motor services .. .. 3,011 3,240 7-6 Railway .. .. .. .. 19,654 20,359 3-6 Railway tonnage .. .. .. 6,024 tons 6,189 tons 2-7 Coastal shipping .. .. .. 1,530 tons 1,611 tons 5-3 Motor-vehicles (licensed) .... 209 228 9-0 Calendar Year, 1934. Calendar Year, 1935. Retail trade* .. .. .. £1,425 £1,494 4-9 * Based on total sales of sixteen departmental drapery stores.

■Rankers' r»<sh Liabilities in Hew R ., . „ „ „ Hauliers oasn. London rnTv^,no ,, Zealand. Katio oi l< Tota , Funds C °™™> d : Holding of C ' ash (expressed lota!s Balances Holdings 01 in in Total To Kestve Reserve silyer ZeSnd. zSd «£ —* S Ban,. Ban. Silver Cmency , E. Tjme) Liabilities. "A." "B." "C." "D." "E." "P." "G." "H." "F" "F" to to 1935. £££££ £ ££" G." " H." April 29 .. 3,825 3,854 778 8,457 18,266 26,723 27,095 62,850 98-6 42-5 May 27 .. 4,195 3,879 794 8,868 18,746 27,614 26,375 62,260 104-7 44-4 June 24 .. 3,877 3,714 798 8,389 18,683 27,072 25,922 61,748 104-4 43-8 July 29 .. 4,258 3,437 676 8,371 18,034 26,405 25,196 61,187 104-8 43-2 August 26 .. 4,453 3,158 816 8,427 17,174 25,601 24,779 61,161 103-3 41-9 September 30 .. 4,633 3,034 816 8,483 16,206 24,689 24,635 61,386 100-2 40-2 October 28 .. 4,495 3,052 760 8,307 12,293* 20,600 24,922 61,115 82-7 33-7 November 25 .. 5,234 3,245 804 9,283 12,065 21,348 25,836 62,059 82-6 34-4 December 30 .. 9,676 3,691 744 14,111 9,755 23,866 27,168 64,303 87-8 37-1 1936. January 27 .. 10,247 3,788 812 14,847 11,150 25,997 28,828 65,862 ! 90-2 39-5 February 24 .. 10,663 3,497 761 14,921 12,726 27,647 30,469 67,630 90-7 40-9 March 30 .. 8,938 3,593 754 13,285 14,143 27,428 31,946 68,476 85-9 40-1 * Decrease due partly to alteration in basis of apportionment.