TRADE AND FINANCE.

Dominion, Volume 5, Issue 1336, 13 January 1912, Page 4

TRADE AND FINANCE.

» EX-BANKER'S VIEWS. (By Teltsraph.—Special Correspondents Auckland, January 12. Tho summary' of the banking returns ot tho Dominion, and tho figures' showing tho decrease of exports during tho year, were submitted by a reporter to a gentleman who is visiting Auckland, and who for many years was connected with banking in New Zealand. He said the most disquieting element in tho statistics published was tho very considerable decrease in tho value of tho exports of the Dominion. The excess of the exports over the imports was, of course, the only source from .which New Zealand, as ;m ontity, could' pay the interest on its debts; tho interest 011 tho national debt was roughly millions'a year, and it was likely that tho interest 011 the municipal and privato indebtedness would como to an almost equal sum. Tho surplus ol' exports over imports was. less than this seven millions, that lmd to ba paid to sotneono outside the Dominion. It meant that tho debt of the community must bo increased. Tho valuo of the exports was apparently .£17,594,000, and though tho valuo of tho imports had not yet been announced, they were probably not far short of tlio exports. If that were so, thero would bo little or nothing with which to pay the interest which had been made up by borrowed money, or som« form of increase in the general indebtedness—a sorious question. As to how long such a condition could continue was thus raised. Thero was no question of tho value of tho security offered by New Zealand to tho outsido lender, but sooner or later tho timo would come when, 110 matter what tho security was, thero would bo a dilliculty in finding lenders. / With reforenco to tho very largo increase of 3J millions in tho advances mado. by tho banks in the Dominion, 110 said the main consideration, in his mind,, was whether Chose advances . had been prudently made. Thero was 110 doubt that during the past few years tho funds of the banks had been accumulating in London, und had been employed at 1)0sumably ■ comparatively low rates of interest. Thoso funds were due to tlio surpluses from realisations of produce in London, and the only question v.as whether tho conditions and trading circumstances justified tho funds being advanced to tho community in New Zealand, instead of being employed in London. The danger was that • thoso advances might have been mado on security difficult to release at short notice, if circumstances led tho depositors to eeek to withdraw tlieir money, and the banks had to call in their advances—that danger might be manifested. There might bo somo justification, ho added, for the view that tlio money derived .by tho banka from the people in New Zealand should be advanced within, the Dominion, and the only question then was that relating to tho prudence with which the advances were made. Tho figures showedl that tno total of advances was still a little less than tlio total of deposits—the deposits being JK5,557,000, and tho advances 191,000.