8.—16.

The unusually large balance of trade for the year ended the 31st March, 1941, contributed to the increase in net overseas assets revealed by the above figures ; but had it not been for delays in the arrival of goods ordered under license, both the balance of trade and the total of net overseas assets would have been very materially lower. As a consequence of these delays, fourth-period import licenses were to a considerable extent still not utilized when they lapsed at the termination of that period on the 31st December, 1940. The relative unused exchange authorities were accordingly cancelled also ; but the overseas funds thereby released were thereupon reallocated for imports of the fifth period, which covers the whole of 1941. Thus, after making the necessary allowance for the. Reserve Bank's statutory reserve requirements and certain other commitments, the net overseas assets held by the Reserve Bank and the trading banks on the 31st March, 1941, represented, not a freely disposable surplus, but a fund which had already been allocated to provide for fifth-period imports. In March, 1941, a sum of £4 million sterling was made available in London by the Bank, partly for payments due to the United Kingdom Government in respect of the Dominion's overseas war expenses, and partly to redeem sterling Treasury notes issued in London in terms of the New Zealand Government's Export Credit Agreement with the United Kingdom Government. Trading Banks. The position of the trading banks as shown by the main items in their monthly returns has been as follows :—

Assets.

Liabilities in New Zealand.

The figures show a rise of £7,042,000 in demand liabilities and a fall of £2,616,000 in time liabilities. The ratio of demand to total demand and time liabilities has thus risen, from 59-9 per cent, to the high level of 65-2 per cent. Throughout the year there was a steady rise in their holdings of Government Securities, but a sharp fall in March, 1941, lias resulted in a net fall of £1-1 million since the 31st March, 1940. Advances and discounts remained relatively steady throughout the year until March, 1941, when they rose by £6,398,000 largely because of accommodation granted on account of primary products in store awaitiii"' export. The proportion of advances and discounts to total demand and time liabilities rose during the year from 61-8 per cent, to 65-2 per cent.

5

(£(N.Z.)000.) Deposits at Reserve Total Cash AT , ,, „ • Advances Reserve Bank in New Net Over- Government Bank. Notes. Zealand. 8eas Assets ' Securities. Digommtg 1940. March ! 13,862 3,544 18,049 9,988 16,540 48,161 April .. .. .. 15,341 4,294 20,377 10,771 15,892 49,541 Ma y ■■ 15,765 3,785 20,273 11,542 15,892 49,556 June .. .. .. 16,212 3,918 20,840 12,572 15,903 47 457 July •• 16,737 4,258 21,695 12,555 15,992 46,102 August .. .. .. 17,522 4,424 22,632 12,508 16,001 45,379 September.. .. .. 15,438 4,161 20,280 12,213 17,074 46,586 October .. .. 13,253 4,007 17,904 12,417 17,257 47,476 November.. .. .. 13,964 4,179 18,822 12,420 17,302 47! 263 December .. .. .. 12,720 5,226 18,623 11,916 17,519 48,079 1941. January .. .. 14,322 5,491 20,580 13,161 18,519 46,710 February .. .. .. 16,485 4,941 22,177 14,179 18,525 47,282 Mar ch •• •• 12,832 4,279 17,860 12,239 15,434 53,680

(£(N.Z.)000.) Demand Time Total Demand and Liabilities. Liabilities. Time Liabilities. • 1940. March .. .. .. 46,640 31,246 77,885 April .. .. .. 48,163 31,251 79,414 May. .. .. .. 48,071 31,815 ' 79,887 June .. .. .. 49,113 31,387 80,500 July .. .. .. 48,423 30,745 79,168 August .. .. .. 48,831 30,870 79,701 September .. .. 48,158 30,576 78,734 October .. .. 46,731 30,352 77,083 November .. .. 48,204 29,735 77,939 December .. .. 49,684 29,376 79,060 1941. January .. .. 52,115 29,110 81,225 February .. .. 56,060 29,010 85,070 March .. .. .. 53,682 28,630 82,312