LONDON FUNDS.

Auckland Star, Volume LXX, Issue 140, 16 June 1939, Page 8

LONDON FUNDS.

BANKER'S REVIEW.

DEPOSITS FLUCTUATE.

CONDITIONS IN PAST YEAR.

(By a Special Corrospoiulent.) \\ KLUNUTON. thi.s day. A jcwew nt tin. , drain on the DoiiH'iiiou't* I.Million funds and the. nipkl ' ii.in.L-tr- which had occurred in the dopo-it- and .uhaiices o f the banks in Neu Zealand wa.s »iven by Mr. A. T. !''.uiiell\. liuiiniiiin ot the Hank of Now Zc:iiip-:. ,it to-diiy'.-. annual liieethijr. In Ihe pa-t li\e year.-, he ,-aid. d'j-0.-ii- iia<[ increased l.y £"i.I(HI.IKHI. ii.i-. an .- In illt.iillli.OlHl, and' the ratio of • ohan.-es to depin-its by 5.7 per cent, !"'■■•.lγ-. the -teaily annual ineri-a.-e '■'■ iiii-li bad lulitinued over iu>\v|'hl years. -lopped iii l'.t:is. lictweeu May" and November of that year there was' a fall of i."..:;nii.ll<iti, but from December to March la-t practically the whole of i lie-e de]i..-ils was restored.

•riie-e rapid mo\ enieiits in ilci'o-its are rather unusual and demand I'oii.-idcr.-ttioil." oaid Mr. Donnelly. "Tho.V .!!.■ iii'ie-saiily linked up with the lloiiiinioii'.s o\eiM'a« fuiul.s and with her o\er-eas luilaiKe of trade. It can lie ii-.i-onaliiy assumed that the tem]K>raiy decline in depoc*itM was associated with ■ > 1 i'cc market for nierchriiulirte. imports mill :i nee market for capital export, uliile the restoration was associated \\ith iinjMirt and exchange control introduced on December •"), JSWS. Adcqimtc policies of import and exdiause. control ha\u a delinite ellect on trading bank ilepiKsjts. t<, the extent that they retain in.ire money in New Zealand and limit n\ci.-eas expenditure and investment. Ibis, in turn, has a bearing on tin , of additional advance* for |uirpo«e* oilier than importation, in thi« rc.Hpect tlie position of New /caland's overseas fund.s is at picseiit mine important."

Drain on Overseas Funds. The chairman stated tlnit tin- trading hank*' deposits with the Reserve Hank. tnt.iUiiifr £fl.<>4l,lHlt, were £.>.450.000 in e.\ccrt-i of the statutory balances required to lit maintained. Overseas funds held by the Reserve liiiiik and tlie trading banks, on ac-eount nf New Zealand business, were sit the I'lid of June. W.iH, £i>lS, 100,000; at the end of December £0,800.000. and at tin. end of March. 1!»:«». £9,300.000, The .March figure compared with C4.~t .200.(100 four years previously. It appeared that repatriation of capital and nrif-ciis investment bv Xew Zealand ; eople had been important fai-tois contributing to the position whielv had de\ eloped.

The value of the Dominion total external trade in l!t."W:i!» was £I12.:»7">.000. a reduction of £10.707.000. continued Mr. Donnelly. Ksportu were less by II per cent, mainly due to lower price*, and partly to a reduced quantity. Imports were 11..') per cent lower in \a!ue than thn previous Near. The export* Jiad been exeeeded on oiiiv two occasions in the Dominion'e history. Movements in Export Prices. Dealin-.' with the operation of the J "iiiirantecd price for dairy produce, he .-tilled that it substantial delicit was cspect"il for the eiiircnt weapon. l)iit :i-.iiiii.-t f'lis there wi'iil.l be a viiila ble. as ;< eel oir. the estimated surplus of £."i."i."i.0(:0 from last season. The l<)3ii-:<7 delicit of fiiTi-'.JSJ had been met by the (lo\ eminent. I , induction for the season just closing wa« estimated to lip 10 per cent lower than in the previoiw year. Wool sold eluriua the latest season had ' realised £9.220.741. Mr. Donnelly said, this |iein;i an increase of £42(i.«»8. The priceo were slightly lower, but the ! quantity was ineream-d. i

Meat exports I'nd lioon affected by til; , dry condition* which developed dlliilijr I lie Piitimicr. and also by the fact tlmi I'm , average prices paid by the fropstin , .' companies were lower by a penny ;i piiimd. A pest liit i"ii r»f :i per cenl mi New Zealand meat into Itritniii hnd been iiiipcscd this year liy the liiiti.-li l.'ovcil piirnt. and to moid rc-t lid ion- on liim'i tlic quota wa* huiiij; a|iiili,-d wholly on iniitLou.