THE BANKING RETURNS.

North Otago Times, Volume CV, Issue 13930, 12 July 1917, Page 3

THE BANKING RETURNS.

THE NEW WAR- LOAN,

The llnancinl position of Nw Zealand, as disclosed in the banking returns for tho Juno quarter, is of considerable importance at the present juncture, because, of tho fact that the Government will l shortly bo placing-oh the. local market a war loan for a substantial amount. That loan must be fully subscribed, and the banking returns show that the people are in a position to do so. The principal items in the returns show increases, and these may bo tabulated as under:

Increase. '£■ Government deposits . 2,13-1,263 Free deposits - 2,838,248 Fixed deposits .... 1,200,043 All deposits . . . , . 0,172,554 Advances '3,893,004 Discounts ... ... . . 117,909 Circulation 972,4G7 Coin aud bullion . . . 1,087,094

The. comparison in each case is with the June quarter of last year, The oxpanaioii in tho Government deposits is substantial, and is due to a variety of circumstances. The purchases of produce on behalf of the Imperial Government arc probably the main cause of the inflated figures. The figures of the different classes of deposits are given in tho table appended: June, June, Increase. 1!)10. 1917. £' £ £ Govt, deposits 5,301,500 7,495,823 2,134,203 Free doposits 20,542,748 23,380,990 2,538,248 Fixed deposits 12,019,141 13,819,184 1,200,043' J Total 38,523,449 44,090,003 0,172,554

The free mid fixed deposits show an increase of £4,038,291, which, is very satisfactory. Every bank participated iiv the increase shown by the two classes of deposits. With respect to 'free deposits, the increases were:— Bank of New Zealand .£1,298,5)111, Union Bank £408,28,0, Bank of New South Wales £419,087, Bank of Australasia £389,428, National Bank £201,039, and Commercial Bank £20,48; i. The aggregate of £2,5:t8,24'8 represents the expansion in the current account balances of customers.

The increases in the fixed deposits were: Bank of New Zealand £579,792, Union Bank £61,810, Bank of New South 'Wales £,'114,290, Bank of Australasia £157,657, National Bank £82,308, and Commercial Bank £4IBO. ' The movements in the fixed and free deposits for the June quarter of live years are shown in the table appended:

Fixed Free deposits, deposits, Totals, June £ £ £

1913 . 10,637,963 13,919,531 24,557,494 1914 . J0,807,025 14,698,719 25,505,743 1915 . 11,208,777 17,436,379 28,645,156 1916 . 12,619,111 20,342,748 Xi.'lfil.SSP 1917 . 1:1,819,184 23,380,996 37,200,180

As compared with the dime quarter, 19.14, just before the war commenced, iln'iv is an iiicie.'R' of ni,!'!i!,-|;:5 in

the deposits. Now we come to the advances and the movements as they affect each bank are shown in the table following; Bank. June, 1910 June, 1917.

X.Z. . 9,571,986 12,456,872 2,SS-i,SS6in^ Union 4,123,05S 4,062,910 61),169in.? N.S.W. 2,902,266 3,216,016 313,750inc A'asia 2,733,740 2,748,111 M,3(isinc Nat'ul 3,429,230 4,110,647 681,411iuc Com'el 155,300 215,05.1 59,751 iuc

22,9.15,622 26,809,616 3,593,994iiic The aggregate increase is somewhat large, and falls almost entirely on three institutions, the borrowings from the Bank of New Zealand and the National Bank being particularly large. The expansion is most likely due to advances against produce in store awaiting shipment, and furthermore, it must ■be remembered that importers require larger sums to pay for merchandise imported owing to the enormous increase in values, Hail the shipping, problem not been so acute the advances would have shown a very moderate increase, and might possibly have exhibited a shrinkage. There was an increase i:i the discounts of £117,969, so that the expansion in the advances and discounts combined was £1,011,963. In this we get an illustration of the fact that bank advances make bank dc posits, for the increase in the fixed and free deposits totals £4,038,291, or practically the same as that disclosed by the advances and discounts.

The following table furnishes some idea of the available resources of the country: Excess of June. Deposits. Advances. Deposits. £ £ £ 1913 . 24,557,494 22,578,650 1,978,814 1914 . 25,505,744 23,938,855 1,066,889 1915 . 28,045,156 23,423,577 5,221,579 1916 , 33,161,889 24,268,340 < 8,893,519 1917 . 37,200,180 28,280,303 8,919,877

As between. what the public have lent to the banks and what the banks have lent to the public, there is now a-margin of nearly £9,000,000 in favour of the public, while in 1914 this margin was represented by the comparatively trifling sum of £1,566,899, . ■