BUSINESS BAROMETER

Dominion, Volume 21, Issue 12, 8 October 1927, Page 10

BUSINESS BAROMETER

money STILL IN SHORT SUPPLY BUT POSITION IMPROVING increase in fixed DEPOSITS The banking returns for the September quarter, which are analysed below, are satisfactory, as showing that the changed policy of tlie banks is proving effective. There is an increase in the fixed deposits, and a comparatively small increase in the advances. There is, however, a marked contraction in the spending power of the community when compared with any of tlie past four or five quarters. The silver lining is to be seen in the better prices ruling for butter and cheese and frozen meat, and the certainty that wool values will be satisfactory, and further that under all these heads there will be increased production. It will be remembered that in May last the associated banks raised their rates for advances and deposits, each by 10s. per cent., with the double object of attracting deposits and checking the demand for bank accommodation. The banks appear to have succeeded in their purpose, for the banking returns for the September quarter now available show a substantial increase in fixed deposits, -while the advances are only a little moie than £500,000 greater than a year ago. These features will be analysed as we deal with the figures under their various heads. The actual increase in the fixed deposits, as compared with the Septemliei quarter of last year, is £2,323,354, but •is the free deposits and Government deposits have contracted the total of all deposits held by the banks is less by £2,707,159, as compared with a year ago. This is shown in the table appended:—

Even if the Government deposits are omitted, the totals of the other deposits in the aggregate arc less than the.v were a vear ago. The shrinkage in the free deposits totals £3,092,457, the totals being £21,816,504, as against £24,907,961 fol the September quarter of last year, and the decrease was shared by all the banks, as shown in the table following:

In the June quarter of this year the free deposits totalled £21,741,262, so that in the third quarter of the year there was a substantial reduction. The meaning of this contraction is that, compar ed with a year ago, the customers of the banks have £3,09’2,457 less to their credit, and compared with three months ago their credit is less by £2,925,758. The spending power has been reduced. The movements in the fixed deposits, as thev affect the several banks, are

In the June quarter of this year the fixed deposits amounted to £21,749,104, bo that, in the September quarter, these deposits increased by £1,649,142. lhe free and fixed deposits for the Septeni-

The advances show the moderate increase of £722,912 compared with a year ago, the figures of the several banks being as under: —

All the banks show increases except the Union Bank, which has reduced its advances bv the small sum of £5303 The discounts on the other hand have contracted, and by a fairly large amount, as will be seen by the table

This reduces the actual accommodation granted bv the banks, and the increase over the corresponding quarter of last vear is just about half a million. Taking the aggregates of the deposits and the advances and discounts, their relation to one another is shown in the table be-

The excess of advances is greater than it was last vear. laking the figures for the past five quarters, the position shows considerable improvement. The

The position has improved cousiderablvjsiitce the December quarter. I'h'e circulation amounts to £6,279,329, as against £6,485,438 a year ago, showing a decrease of £206,109. while the metal reserve at £7,873,626 shows an increase of £81,291 on the year. Ihese items for the September quarter of each of live years show as under:—

The spending power of the community, §4 shows fcs tfce circulation sad

tlie free deposits in each of the past five quarters, is disclosed in tlie table below: —

The figures indicate the need for continuance of the policy of caution and economy, which has already bad a beneficient effect.

Sept., 1926. Sept.. 1927. Deposits. £ Government 4,027.503 2,089,147 £> 1,938,356* Free .... 21.997.961 21,815,501 3,092,457* Fixed ... 21,074,892 23,398,246 2,323,3547 50.010.356 47.302,897 2,707,459* T Increase. •Decrease.

Sept.. 1926. Bank. Al New Zealand 11,466,558 Sept., 1927 £ 10,337,124 . Dec. £ 1,129,434 Union .... . 2,928,461 2,352,231 576,230 N.S. Wales . . 2,5118,475 2,257,902 310,513 Australasia . 2,330,834 2,07!),514 251,320 National .. 4.637,887 3,862,924 774,963 Commercial . 975,746 925,749 49,997 24,907,961 21,815,504 3,092,457

•—. Sept., 1920. Sept., 1927. Inc. Bank. New Zealand 10,845,289 £ 11.736,708 £ 891,419 Union .., > 2,386,072 2,557,432 170,760 N.S. Wales . 2.724,295 3,003,019 338,724 Australasia 1.741,912 1,902,840 100,928 National 3,007,483 3,653,820 640,337 Commercial . 309,241 484,427 115,186 21,074,892 23,398,240 2,323,354

ber quarter of five years show as under: Total Free Fixed Sept. deposits. 25,800/739 deposits. deposits. quarter. 3 923 .. £ 18,138,097 £ 43,938,836 1924 .. 25,220,639 19,901,386 45,122,025 1925 .. 192<» .. 26,811,762 24,907,961 20,941,663 21,074,892 47,753,425 45,982,853 1927 .. 21,815,504 23,398,246 45,213,750

Bank. New Zealand Sept., 1926. 20,347,704 .. 5,722,935 Sept., 1927. £ 20,598,963 5,717,632 £ 251,259* 5,303t N.S. Wales , ,. 5,940,037 6,169,244 229,207* Australasia , 4,793,468 4,922,185 128,717* National ,. 8,606,336 8,640,839 40,503* Commercial . 1,281,971 1,360,500 78,529* 46,092,451 47,415,363 722,912* > •Increase. f Decrease.

appended:— Sept., 1926. Sept., 1927. . Bank. New Zealand £ 1,029,357 50,796 -P £ 820,980 20S,377t 45,274 5,5221 N.S. Wales .. . 171,271 172,225 954* Australasia .. National 96,194 234,302 99,122 2,928* 225,179 9,1231 Commercial . 37,088 12,487f 1,631,495 1,399,868 231,6271 •Increase. tDecreasc.

low: — Excess of Sept. Deposits. Advances. deposits. quarter. £ 1023 .. 43,938,836 £ 42.826,728 1,112,198 1921 .. 45.122,025 43.923.081 1.198,944 1952 . • 47,753,425 44.975.360 2.778,065 1026 .. 45.982,853 48,323.946 2,341,093' 1927 .. 45,213,750 48,815.231 3,601,481' * Excess o£ advances.

figures are as follow: — Excess of advances. Deposits Advances. Quarter. Sept., 1926 n™. 192(1 .£ •t5.9S2.S53 44,23(1,659 48,323,916 51,273,211 2.341,093 7,035,561 5,271,996 Mnr., 11127 45.52S.S12 50.800,808 J une, Sept., 11)27 1927 46.490.366 45,213,750 50,753,106 48,815,231 4.262,740 3,601,481

Coin Circulation. and bullion Quartci 1923 . ... (1,357.512 £ 7.003,251 7,819,104 7.724,228 1924 vr’5 6,:iG6.5i>o .... fi.566.3os 1927 (1,485,438 6,279,329 7,792,332 7,873,626

Free deposits. Circulation, Total. Quarter. £ £ Sept., 1926 24,907,991 0.485,438 31,393.399 Dec., 1»2I! 23,131,103 (>,757,707 - 29.8SS.S10 Mar., 1927 24,440.778 6,603.('81 31.044.459 .lune, 1927 24,741,202 0,587,002 31,328,2114 Sept., 1927 21,815,504 6,279,329 28,094,831