AUSTRALIAN RECOVERY

Nelson Evening Mail, Volume LXX, 25 March 1936, Page 2

AUSTRALIAN RECOVERY

CAUTIOUS POLICY URGED COMMONWEALTH BANK BOARD Reviewing conditions in Australia the directors of the Commonwealth Bank, in their report for the half-year ended 31st December, 1935, state that the time has arrived when balanced budgets and decreased loan works should be the immediate policy of Australian Governments. The war in Abyssinia and the international situation must be carefully considered. Until there is some prospect of peace and a greater assurance of settled international conditions, caution is advisable. The report states that the half-year has been a period of industrial expansion, with buoyant and high prices for industrial stocks, but varying prices for Government stories. With the prospect of further reduction in Government deficits, unemployed figures steadily decreasing and the volume of loans for works somewhat reduced, confidence has been strengthened, supported as it TTas been by a greater volume and higher price for exports than were expected. There lias been a steady expansion oi Imports, which, in the circumstances, is a natural corollary. Imports, however, must be kept in proper relationship to exports after taking into account “invisible” items. “Banking statistics denote a higher percentage of advances of deposits than is usual at this time of the year, and are further evidence of general activity,” states the report, “Some improvement in the liquid position is called for and will, no doubt, in due course be brought about. No inflationary measure, however, is justified as a remedy for such disequilibrium as now exists.”

The accounts for the half-year show a profit of £638,981, compared with £623,807 in the previous half-year and £659,767 in the corresponding half of 1934. The profit of the general banking department was £214,089, compared with £210,872 and £226,301 respectively. Half the profit goes to the reserve fund of the department and half to the national debt sinking fund. The profit of the rural credits department was £21,735, compared with £>24,267 and £24,790 respectively. Half goes to the reserve fund of the department and half to the development fund. The profit of the note issue department was £403,157, compared with £388,669 and £408,. 675. The whole of the profit to this department goes to the Commonwealth Treasury.