EXCESSIVE IMPORTATION.

New Zealand Herald, Volume LXIII, Issue 19303, 16 April 1926, Page 10

EXCESSIVE IMPORTATION.

There is no room for doubt regarding the meaning of the bank statements published yesterday. They show very clearly that the country has been spending beyond its that its merchants and traders have not' paid sufficient attention to the contraction in the value of exports, and have imported more than the population can afford to buy. As an index of commercial conditions, the banking returns have an unquestionable authority. They relate mainly to trading operations, domestic and foreign, and since the published figures represent averages for the relative quarter, temporary fluctuations are not exaggerated. In normal conditions-of sound trading, the March return should reflect a condition of monetary case. Heavy demands are made upon the bantcs for accommodation, in the spring months, by exporters for advances against early shipments of produce and by importers to finance deliveries of goods which are always greatly in excess of exports at that season. The drain upon banking resources reaches its climax in the last quarter of the calendar year, to be relieved in the following period by 'the proceeds from the sale of exports, this leading to the further improvement normally displayed by the June returns. From the public point of view, the position now disclosed is more favourable than it was in the December quarter, but the improvement is so small that its significance cannot be mistaken. In each of the preceding three years, the movement from the December to the March quarter was very much greater and showed a progressive increase. Private deposits increased by over two millions, four millions and five millions respectively, while advances declined by about one million, two millions and again two millions. On this occasion, the increase in deposits has been £1,272,000, while the reduction in advances has been £269,000, showing an improvement of only £1,540,000, as against the movement of £7,400,000 in Ddcembcr-March a year ago. As a result, advances are in excess of deposits, a condition that has not occurred in the March quarter since 1922. If the quarterly returns for the last six years are examined, it will be found that the present position is exactly analogous, though in lower degree, to that produced by the enormously excessive importations in 1920. Five years ago, appreciation of the dangers was of small value, for it was then almost impossible to arrest the flood. Today traders have command of the situation, and may prevent the development of difficulties even resembling their experiences in 1021. Nevertheless, they cannot prudently neglect the warning of the bank returns. Advances now stand at a higher figure than they have been in the March quarter since 1921, and that fact clearly demonstrates an excessive accumulation of stocks of mcxcJuttlißQ*