THE COUNTRY'S FINANCIAL POSITION

Dominion, Volume 11, Issue 11, 8 October 1917, Page 4

THE COUNTRY'S FINANCIAL POSITION

Thb banking returns for the September; quarter are of particular interest on the present occasion as affording an opportunity of judging to some extend the cffects of the large loan floated locally by the Government, and which was such a pronounced success. It will be recalled that nearly sixteen millions of the loan was taken up, and though the full effects of' this enormous subscription would not be evident in the banking figures for the September quarter it might have been expected to lead to shrinkages in certain directions. The position disclosed is in the circumstances a most gratifying one. Compared with a year ago the Government deposits show an increase of £2,206,473, and now stand at the huge total of £7,425,712, while both the fixed and free deposits also show increases. The position of

tho tlireo classes of deposits is shown in tho tablet appended: — Sep., 1516. fiep., 1917. Increase. £ £ £ Govt, deposits 5,159,239 7,425,712 2,266,473 Free deposits 19,620.671 21.567,821 1,947,150 Fixed deposits 12,978,629 14,139,815 1,161,185 ' 37,753,539 43,133,348 5,374,609 There is a pronounced incrcaso under every (head. Applications for tho loan closcd on September 3, and it is but fair to suppose that most of the incrcaso shown by the Government deposits is due to the loan operation. The growth ofi the free deposits is very satisfactory, and is very little short of two millions. The share of tho rcspcctive banks in tho incrcaso in free deposits is shown below: — Sep., 1916. 6cp., 1917. Increase. Bank. £ £ £ New Zealand... 9,525 /07 10,452,240 926,033 Union 2.590,790 2,930,594 339.E04 N.S. Wales 2,365.876 2.C04,453 2«,577 Australasia ... 2,116,875 2.295,137 178,26?. National 2,830,770 3,056,676 225,905 Commercial ... 190,953 228,721 37,768 19,620,671 21,567,321 1,947,150 The fixed deposits have grown fairly rapidly during the war period, but the increase of £1,161,15 C is. not quite so great as the expansion shown Inst year. Tho position of tho fixed deposits in relation to the sovcral institutions is as follows:— Sep., 1916. Bop., 1917. Increase. Hank. £ £ £ New Zealand... 6,574,259 7,067.643 493,384 Union 1,608,334 1,653.238 44,904 N.S. Wales. ... 1,945,365 2.275,387 330,022 Australasia ... 853,980 1.037,601 1M.621 National 1,945.269 . 2,037,422 92.153 Commercial ... 51,422 68.5 M 17,102 12,978,629 14,139,815 '1,161,186 The free and fixed deposits now total a very large sum, and their growth in the past four years may be seen in the tablo given below: — Sept.. Free deposits. Fixed dep. Total dep. Quarter. £ £ £ 1913 ... 13,09(1,090 10,649,003 23.739,093 1914 ... 14,172.777 10,828,887 25,001,664 1915 ... 17.545,063 11.609,066 29,154,929 1916 ... 19,620,671 12,978,629 32.699,300 1917 ... 21,567,821 , 14,139,815 35,707,636 In the four years there has been an incrcaso of £11,968,543, of which £10,705,972 has been gained during the three'years of war. This war prosperity which' tho country is enjoying is a vital factor in enabling us to finance tho hugo and increasing cost of our war obligations. The advances exhibit a gain of £3,868,855, partly duo to advances against produce waiting and partly to advances made to those who desired to subscribe to tho War Loan. The, Bank of New Zealand had to provide the greater part of tho accommodation, as the figures in the following table show: — Sep., 1916. Sep.. 1917. Bank. £ New Zealand 9.970.195 12,761.657 2,791.462 inc. Union 4,088,955 3,996.651 92.304 dec. NS Wales... 2,890.448 3,156.218 257,770 inc. Australasia 2.698,910 2.912.090 £3.180 inc. National ... 3,411,117 4,077,870 6f6.690 inc. Commercial 181,511 213,568 32,057 inc.

23 249,136 27,117,991 3,068,855 inc. There is a, decrease in the amount of tho discounts, the totals being £1,297,460, arainst £1,428.829, or a shrinkage of £131,369. Tho docreased imports owing to the shortage of tonnage is probably partly responsible for this, and the better 'financial -circumstances of traders have to a certain extent made them less dependent ■on this sort of accommodation. Taking the deposits on tho one hand and the advances and discounts, the excess of the one over the other for each of thf} cast five years is shown in the following' table:— Excess of Sept. Deposits. Advances, deposits nunrter. £ £ ■ £ _ 1913 ... 73,739,093 22.196,723 1,542,070 1914 ?,5,0f11.£64 24.462,576 . 539.C88 1915 ... 25.154.929 23,348,506 5,8f6,023 1916 ... 32,595.300 24,677.965 7,921,335 1917 ... 35,707,636 29,415,451 7.292 185 There has hecn an enormous expansion during _ the past year in the note circulation of the banks, while compared with 1915 th-s amount is practically double.' The coin and bullion also show substantial increases, and the,totals under these two heads for oachl of tho past five years 'are as follow: — Ooin and Sept. Circulation. bullion, quarter. £ £ , 1913 ...) 1.608,777 5,334,421 1914 .... 2.012,569 5 823.575 1915 2.822,809 7,002.939 1916 4.329,953 7,498,250 1917 5,650,881 9,847,060 _ The figures taken in their entirety arc dccidedly satisfactory. No breach has been made in our prosperity; on 'the contrary the continuancc of that prosperity seems more pronounced than ever. The people* and the financial institutions have recently provided tho Government with nearlv £16,000,000 for war purposes, and thousands of pounds are being subscribed weekly for patriotic purposes, and with it all raonev is being saved, as the 'growth of the deposits indicate. Tho shortago of shipping to. carry our produce,, however, is _an unpleasant feature of the situation which oannofc be ignored as jiointing tho necessity for the exercise of prudence- and caution.