AN IMPROVED POSITION

Evening Post, Issue 88, 12 April 1924, Page 6

AN IMPROVED POSITION

Improvement in the banking position of the Dominion is unmistakable, going by the figures contained in the returns (published yesterday) for the quarter ended 31st March last. Trouble for New Zealand, in common with- most countries' of the world ' who had engaged .in the war, began early in 1921. The causes, so far as this country were* concerned, were not primarily attributable to decreased production or diminished returns, ( but to excessive importing. Prices for wool, meat, .butteiyand cheese, and for almost everything else that New Zealand could export^ had been exceedingly high during the war period. There was plenty of money about; also wages -had taken a bound upon the pre-war rates. The great difficulty about obtaining supplies from overseas was the delivery; prices did not. count, qu&lity mattered very little^ There was a take-it-or-leave-it attitude adopted by all who had necessary commodities to sell. But prices for necessaries at the end of 1921 received- a sharp check all round. This Avas the manufacturer's opportunity, and he seized it to. execute to. the full deferred orders ,given in the belief that not more than" 50 or even 25 per. cent, of the quantities 'would be supplied. Instead, all that was ordered was shipped — and some more. New Zealand was "gorged" with new goods arriving by shiploads on a depressed market. By the 31st of June, 1921, the indebtedness of the public to the 'banks was £54,385,485, against which there were debts, in the form of moneys on fixed deposit and current account, due by the banks to the. public, .amounting to £45,511 - OSS; so there was a debit balance on the part ; of the banks' customers of £8,864,390—5 ay, £9,000,000 The slump was felt by farmers, with wool well below cost of production, butter and cheese substantially reduced in value, meat prices pence per pound less than Imperial Government purchase rates, and all other exportable commodities of New Zealand origin selling at far under former prices. There were, too, the inflated values of land, bought at prices based on the quite unwarranted, assumption that high prices for products had come to stay for New. Zealand. Most mercantile houses were more or less adversely affected by this great and sudden change in commercial affairs; But from June, 1921, onwards to the end of 1922 overdrafts, or advances, were severely curtailed, until at-the end of March of last year there was an excess of deposits over advances amounting to £944,423: The corner had- been turned. ' At the last quarter of 1923 there was again a balance against the public, and this time: of £3,399,217. . Not only has that now .been1 adjusted, but there is besides an excess~~'of money to the credit of the public of £2,629,770 at the end of the quarter just closed. This satisfactory result may largely be accounted for by the fact that for the twelve months ended 29th February last the exports of the Dominion reached in value a few thousand pounds short of £50,500,000; for the twelve months ended 28th February, 1923, the total actual value was £42,741,325. The improvement is due largely- to the greatly-enhanced returns from wool and the satisfactory prices realised —up till quite recently—for dairy produce. The bank returns as a whole, when read in conjunction with the trade figures, show the country to be making excellent progress towards a complete recovery from the bitter trading experiences of 1921-22, themselves but the reaction of war-price delirium. Notwithstanding, the set-back in the butter and cheese market, it is fairly safe to say that, excepting any serious industrial disturbance, the trading prospects of New Zealand are most encouraging; moreover, it is a debatable point whether any other country participating in the Great War hzis made so rapid a, recovery from the financial stilßgency that jirst mawlested. it'

self in this country three years ago, by turning a debit balance <of £6,131,000 at 31st March, 1922, into a credit balance of £2,621,000 at 31st March, 1924.