THE BANKING YEAR

Evening Post, Volume CXXVI, Issue 151, 23 December 1938, Page 8

THE BANKING YEAR

With a week to go, the banking year of 1938 will close without cause for satisfaction. Funds are running low, and borrowings by the State show an extraordinary increase for the year, compared with the position as it was at the close of 1937. Net overseas assets held by the Reserve Bank and the trading banks are under £8,000,000 on the latest returns, compared with £24,000,000 a year ago. The Government, as a borrower, is debited with £10,900,000 (including £500,000 in Treasury bills), whereas advances made to it at this time last year totalled £1,300,000, and on March 14 last those advances were shown as nil. The seasonal rise in the banknote issue, at over £16,250,000, makes a record. It indicates plenty of money—paper money—for spending this Christmas. A depressed butter market accounts for increased advances on account of the Primary Products Marketing Department. While New Zealand butter is selling around 110s to 112s (sterling) per cwt instead of 124s 3d (sterling) — the guaranteed price—those advances will be higher instead of lower. The banking position as disclosed for jsome weeks past called for immediate adjustment in the external trade balance, and steps' have been taken to that end. but it also suggests that early in 1939 reduction in private as distinct from Government borrowings, and •a. considerable shortening of sail, will also be dictated by prudence.