GOING BY THE FIGURES

Evening Post, Volume CXXVI, Issue 73, 23 September 1938, Page 8

GOING BY THE FIGURES

Official returns of the Reserve Bank of New Zealand and of the six banks engaged in commerce in the Dominion will be found elsewhere in this issue. They make significant reading, especially when they are compared with those given at this time in 1937. In the Reserve Bank, return it will be seen that at the end, of business last week that institution i was liable to the State for the sunr of £3,704,250, for deposits on de-j mand; but against that the Bank had| advanced to the Government £3,800,000, a jump of three-quarters of a million pounds in the week. This advance is shown in the return as for purposes other than primary products marketing and includes housing, but it is not stated whether the whole advance is for housing. At this time twelve months ago the State had £5,450,867 on demand with the Bank; but the advances to the State for purposes other than the Dairy Industry Account were but £500,000, so the State today owes the Bank £3,300,000 more than it did twelve months ago. Its sterling exchange reserve, too, which stood at nearly £19,000,000—£18,936,254 11s 7d, to be exact—today has shrunk to just over £12,500,000, the figures being £12,681,343 0s lid.

The banks engaged exclusively in commerce also return figures for the month ended August 29 last. These j invite comment when they are com* pared with those of a year ago. They disclose a decline in the aggregate of free and fixed deposits from £67,059,680, to £64,365,086, approaching £3,000,000. Bankers in making advances or loans to their customers are influenced far more by| their fixed deposits than by those which are placed with them on demand and, therefore, fugitive. The fixed deposits for Augusf, 1937, { amounted to £33,698,512, and for August, 1938, to £33,710,441, showing practically no change. The free deposits, however, twelve months ago, were £33,361,168, but these have now been reduced to £30,654,645, a drop of £2,700,000. On the other, hand, the advances, or overdrafts, combined with bills discounted, a year ago amounted to £49,475,817; j today they total £55,645,844, leaving a surplus of £8,719,242 of advances over deposits, in contrast with one! amounting to £17,583,863 at the end of August, 1937. The export season is now getting into its stride—so it was at this time twelve months ago—: and what with a financial tug here and a jerk there, no doubt a better adjustment will be made between deposits and advances before the close of 1938 than is apparent on the returns as they disclosed the position at the end of last month. It will be, necessary to make such adjustment, but it will not be easy unless present prices for the Dominion's main products are maintained. But will they be? No one can say. If they improve, then the task will be easier than it appears at the moment; and a much desired improvement in the amount of London funds of the Reserve Bank and trading banks should then be seen.