LEEWAY MADE UP

Evening Post, Volume CV, Issue 87, 12 April 1923, Page 6

LEEWAY MADE UP

Further and striking evidence of the great recuperative capacity of the country is,provided in the aggregate average returns of the banks of the Dominion for the first quarter of 1923. Not only has the heavy indebtedness of the public to the banks been liquidated, but there is a small balance to its credit. At the end of June, ;1921, the overdrafts and other debtß of the public to the banks were more by approximately £9,000,000 than the money deposited with them in the form of current accounts, and sums placed on fixed deposit. Today the position is entirely reversed. There are in the keeping of the banks £944,423, or nearly a million more than the aggregate sums advanced by them to their customers. The leeway of 1921 and 1922 has been made up, and with care and reasonably stable markets for New Zealand produce even greater progress should be seen in that direction at the end of next June quarter. It is a fine record of recovery in so short a time as two years. One or two points in reading the returns, however, should' be kept in mind. It is certain that the great increase in the value' of exports and no expansion—indeed, some contraction—in the volume of imports have an important bearing on the present position.

It is also understood that all the banks have much lgrger balances in London than is usual. This is evident from the ruling low selling rates of exchange-on London. No doubt, too, deposits are swelled this quarter by unexpended portions of loans raised by local authorities lying in the banks pending their employment in the works for which they are intended. But apart from these considerations the fact remains that a very substantial public indebtedness to the banks has been turned into a credit during the first quarter of 1923. It is much to be thankful for. Incidentally, a perusal of the banking returns for the past two years, especially those for the half-year of 1920, should suggest the question' : Whence came the money to enable the banks to permit overdrafts to exceed deposits, as in June, 1920, by nearly £9,000,000? The answer seems to be that the banks found it themselves, and to that extent assisted the public to tide over one of tfte 'worst periods in the course of the commercial and industrial history of the country.