THE BANKING RETURNS.

New Zealand Herald, Volume LXI, Issue 18635, 29 April 1924, Page 6

THE BANKING RETURNS.

A very sound position is disclosed by the bank statements for the March quarter. The heavy demand for accommodation during the December quarter, which caused advances to mount to a figure higher by £3,400,000 than private deposit:-), has been relieved from the proceeds of the season's production, and the quarter shows a favourable balance of £2,629,768. Thus, in comparison with the December quarter, there has been an improvement to the extent of £0,000,000, while the year shows a gain, from the public point of view, of £3,574,000. Further ground will no doubt be gained during the current quarter, from the autumn realisations, leading to a position comparable with that shown by the last June returns, when the excess of deposits ,was £3,972,000. There is striking evidence of a bountiful season of production in the fact that private deposits show an upward movement from the December to the March quarter of no less than £4,203,000, while advances are lower by £1,825,000. Not since the period of enormous accumulations in 1919 and 1920 has so great an improvement occurred between two quarters. The result is that deposits stand at the highest figure for three years—with fixed deposits at a record level—while the excess of deposits is relatively sub-

stantially greater than might be expectfed in normal circurhstance,-?. Unfortunately," the community .lias not yet adjusted itself to the new con- t ception of the normal, but still hankers after the pre-war economy, a state that has probably gone beyond recovery. A study of the banking returns suggests that conditions now approximate to equilibrium, for the fluctuations from quarter to quarter, at least during the last year, have probably been due almost. entirely to seasonal influences. The injury caused by the violent disturbances a few years ago may not be fully repaired, but the adjustment has been general, and circumstances justify the expectation of a new vigour in commerce and industry. Yet, in spite of such stimuli ling- influences as the prospect of lower taxation, enterprise is hesitant and credit that might be devoted to reproductive uses accumulates in the banks. It can hardly be doubted that one of the restraining influences is the continued dearness of money, in spite of the manifest improvement in financial conditions, nor will such disturbing experiences as the railway strike tend to allay apprehension.