BEITISH COMMERCE.

Northern Advocate, 25 April 1921, Page 2

BEITISH COMMERCE.

In Pi> if'i in. as in this, country, tlio returns of the banks afford valuable evidence as lo the general linnnciftl position. The results of British brink* irtg operations (luring 1020 have had an important bearing on trade conditions, and in reviewing them the "Scotsman" gives some very interesting information. The figures of the four largest London banks provide a fairly ele:.r answer to the question whether the b-i.nl-.- :-.re restlictins the supply (if credit. These banks are Barclays, Lloyds, the London County, West'•■insUr, and I'uris. and the London Joint C'itv and Midland, and their combined deposits lepr >-;cnt apprnximateI-/ iwo-lhirds of the aggregate bank ili'Xiosits; of the United Kingdom. The nggrop.ato amount of deposit:? ill ihe four institutions increased during 1920 by £34,000,000, or a little over 4 per cent. Of this increase, £28,000,000 was recorded in the first and <-2'5.000.000 in the second half-year. Loans and advances by the four big banks increased during 3920 by exactly the same amount as deposits, but the net increase on the year of f"4,000,000 in loans and advances was made up of a rise of £108,000,000 in (lie fir«t half of the voar, and.a decline of £54.000,000 in th-» s?cond half. At an immediate view rhc Hiztnos might suggest that the banks found the state of affairs in the middle of JO2O (when leans and advances showed r,n increase of 108 millions against an increase in deposits of only 28 millions) so little

to their liking that they at once imposed dra-'tic restrictions on credit. The bunkers themselves offer a different explanation. For instance, Air Reginald McKenna, speaking as chairman of the London Joint City Midland Bank at Ms annual meeting, s;iid that advance.- had declined "not because c>uv bank has restricted credit, but because the fall of prices and stagnation of trade have lessened the call f>v accommodation.'' Mr McKonna added that it was the policy of the Bank to sell investments "even at a loss in or-.br to moot legitimate demands for.credit. This suggest-; that imports are bc-inii curtailed, but it also indicates •.hat a very regrettable cheek hasbeen placed upon ordinary business expansion.