The Banking Returns.

Press, Volume LXV, Issue 19668, 11 July 1929, Page 8

The Banking Returns.

The quarterly returns of banking in Xew Zealand, a summary of which we printed yesterday, give encouraging indications that the steady prosperity of the Dominion is not likely to suffer impairment, and that the outlook generally is very hopeful. The returns form an interesting sequel to the review of banking and financial affairs in the Dominion for the past twelve months made by the Chairman of the Bank of New Zealand at the annual meeting of shareholders held recently in Wellington. The outstanding feature of that review was the fact that funds were so plentiful, owing largely to the inflow of fixed deposit money attracted by the higher rate offered, that avenues for investment had to be sought beyond the Dominion itself. That state of financial buoyancy still continues. For the June quarter free and fixed deposits totalled slightly over 57 million sterling, whereas advances and discounts totalled approximately 47§ millions, indicating that the banks still have it within their power to grant ample accommodation to the trading community. Throughout this period of financial buoyancy, and partly as a reason for it, there was a general spirit of caution, so that although the opportunity was there for foolish optimism, expansion, and inflation, all concerned exercised a prudent restraint. Lessons of the past had not been forgotten. The June quarter really marks the close of the exporting season, and until the value of the new exports comes into calculation the tendency will be for money gradually to harden. Already the rate of flow of fixed deposits is steadying, whereas that of free deposits is increasing, and there are indications that what may be termed the dead season in New Zealand finance and business will this year at all events be entered upon in rather favourable circumstances. What the future holds can only be surmised, and much of that surmise, so far as the Dominion is concerned, rests upon what is likely to happen in the markets of the world. Nothing, however, tends more to create and retain confidence and to promote enterprise and legitimate expansion than a knowledge that the financial foundations are sound, and in New Zealand at present that is the state of affairs.