The Gisborne Times. PUBLISHED DAILY FRIDAY, JANUARY 13, 1933. THE RANKING BAROMETER.

Gisborne Times, Volume LXXIII, Issue 11832, 13 January 1933, Page 4

The Gisborne Times. PUBLISHED DAILY FRIDAY, JANUARY 13, 1933. THE RANKING BAROMETER.

The banking returns for,the quarter ended December 31 will have, no doubt, attracted a great deal of consideration. In this connection, an. illuminating contrast is shown if one compares the position now with the banking situation say two years ago. As at December 3.1, 1930, the trading banks Bad made advances totalling just over 113,000,000 more than the aggregate of deposits—free and fixed—entrusted to them. At present, however, the lotal pi the advances is- £‘227,595 less than the sum. of the deposits lodged at those institutions. In short, .this amounts to a recovery in two years to the extent of £3,236,947. As a rule, the final - .quarter .of- a year' is a . 1 period when .clients lean most heavily <> n their bankers,. for importers are indeed of funds to finance - summer goods, especially those required for The Christmas trade, and exporters fire in need of financial 'aid pending realisation upon their .season’s, output. It.so. happens that"in respect of the final, quarter of. the past year imparts wore, probably not so heavy as formerly and it is not improbable that. the demands . by exporters for additional accommodation were also much • reduced, . not-

withstanding The "fact that ‘lower -■ prices . -have ruled- lor - dairy*produce and wool and that not much mcat'could, by the-• end* of Dc-, comber, havo been; got away. In all the - circumstances, Uicto appears to be every i-prospcct .thilb' th'e: returns' for illio initial quarter of the new yoar will show Van . even strongerbanking ( position. ;vMeantime, .iti can 1,0 taken" ifor granted,ithat imports!, will continue on a diminished'; scale and that produce will -go .forward, in regular large.:consignments- to 'ithe -Homo market. On the other hand, of course, it may. be anticipated that the :banks will bo called upon heavily to assist; many clients in the payment -of State and local taxation which will' require Lb be met, during the current quarto l '. AH things, considered, - the margin in favour of deposits at the end of March should, be substantially * higher than was the’case at the / end of December. It cannot, however, be suggested tlihb it is in the national interests that holders, of -surplusnibney prefer that so much of it' should simply bo pjacod on fixed deposit witli the banks. Ever since the onset of the world depression, fixed deposits have continued to grow in volume and tile fact that the pendulum has not begun to. swing iti tlie opposite direction is plainly indicative that many investors still regard the guarantee of a small return from lodgment on deposit as much safer tlian tlie return likely to be derived from ordinary investments. Whilst such a condition of tilings, is flattering to the trading banks, it must, be ad-, initted that it also denotes a sad lack of confidence in respect of private industrial effort. A much more, unsatisfactory feature of .the latest banking returns is the disclosure that the Government, is very hardup. To-day. the banks are holding State. securities to the extent of as much .as £10,103,CG1, • which is. near iv twice as large us Um amount held two years ago. During tlie present quarter, as a result of the receipt .of national taxation, -tlie Government should be able appreciably to reduce its indebtedness to the banks, but we are afraid that it’will require to lean heavily on those institutions throughout the present year. The present period is, unquestionably, one of considerable difficulty even for the banks and it is greatly iu the interests of the Do million as well a,s in that of their shareholders that the banking situation is becoming more and more satisfactory.