WEEKLY BANK RETURNS.

New Zealand Herald, Volume LXV, Issue 19939, 7 May 1928, Page 10

WEEKLY BANK RETURNS.

NOTABLE INNOVATION.

AID TO TRADE FORECASTS. DEMAND BY ECONOMISTS. BUSINESS MEN GRATIFIED. A most valuable improvement in New Zealand banking practice, the publication of weekly instead of quarterly returns, will be instituted very shortly. The change is believed to have been brought about at the request of the Government, the business community and the university economists. In 1926 the conference of the Associated Chambers of Commerce unanimously passed a remit in favour of more frequent returns, and last, year the professors of economics at the four university colleges made a joint request of the same nature to the Minister of Internal Affairs.

It has been arranged that the banks carrying on business in New Zealand shall forward weekly returns to the Government Statistician, who will issue the collated figures fo the public through the press. Tho items comprised in the returns include two that are not to bo found in tho present quarterly statements, namely: (1) Bank debits, being total amounts debited to customers' accounts at all branches during the week, and (2) bank clearings, being the total outward exchanges delivered at all branches during the week.

Other Items in Returns. The other items are(3) Advances notes and hills discounted, and debts due to hank, exclusive of debts abandoned as bad; (4) deposits—Government, not bearing interest and bearing interest; (5) metal reserves—gold, silver and other metal coins, and gold and silver in bullion or bars; (6) legal tender notes—bank's own legal tender notes in circulation, and legal tender notes of other banks held; (7) the bank interest rate; (8) the bank over draft rate. When the discussion took place at the chambers of commerce conference two years ago, Mr. Malcolm Eraser, Government Statistician, who was present, slated power existed under the Census and Statistics Act to obtain the necessary statistics, which ho regarded as very necessary, but difficulties had been experienced in convincing the associated banks of that necessity. Following the conference the matter was taken up by the secretary of the Associated Chambers with the Government and the banks, with the result that the secretary of the Auckland Chamber of Commerce on Saturday received a letter from the Associated Chambers stating that the representations had been entirely successful, and that the institution of weekly banking statistics was now in train. ESect on Trade Conditions.

Economists and the increasing number of business men who have interested themselves in the matter are at one in believing that adequate banking statistics published at short intervals will be of the greatest possible help in foretelling business conditions. It has been repeatedly stated that, one reasdh why bank rates in New Zealand have not been adjusted more promptly to changing conditions is that banking returns have been published only at infrequent intervals. It has also been stated that this slow adjustment has been largely responsible for the unhealthy booms that have marked the economic life of the Dominion, and that it has delaved recoverv from dull times. The Auckland Chamber of Commerce Journal for April, in commenting on the economic outlook, iudicated from a study of the available statistics, that the stage was definitely set in favour of prosperity, but that the employment situation was exceedingly stubborn. It attributed this stubbornness largely to the spirit of pessimism engendered by the recent quiet period, and stated that all that was now required was a return of that confidence which was really warranted by the available statistics. Among the causes hindering tho return of that confidence it gave an important place to the failure of the banks to reduce their rates to the lower basis which the latest figures for banking seemed definitely to call for.

Assistance to Economists. "The banks are to be congratulated upon having made Ihe change," said Dr. 11. Belshaw, professor of economics al Auckland University College, in commenting on the announcement. "Banking statistics are among the most useful of the readilyavailable indices of trade conditions. Taken in conjunction with other returns over a period, they are a valuable aid in forecasting the course of business. 1 he trouble in New Zealand has been that the figures are made available at too long intervals, and that they are not so comprehensive as they should be." New Zealand had been lagging behind both Great Britain and the United States, ho said. The Americans believed in the control and direction of trade conditions, and their bankers had a great sense of responsibility in this respect. Banking figures were given the widest publicity. Economists were always asking for more, because they were continually being asked to interpret trade movements and forecast on an inadequate basis of figures. What they needed was the opportunity to study statistics over long periods in relation' to the conditions prevailing at the various times. A regular series of returns over such periods would help greatly in explaining both prosperity and depression, and in determining the points at which control might be most favourably undertaken.

More Details Required. Dr. Belshaw said he was not prepared to say the new weekly returns would be of much immediate benefit, as time would he needed for study and comparison. As for tho figures themselves, he was inclined to think returns of deposits on current account and of fixed deposits, enabling. their relative movements to bo studied, might give a more sensitive index of future conditions than the comparison now made between "advances" and "deposits." Tiie information given at present was not sufficiently detailed. Asked whether the returns would be of direct value to the business man, Dr. Trishaw said the periodical reports that would bo made upon the figures would certainly bo of value to him. Later he might learn to make some interpretations for himself. Many business men were among the students of economics at the university colleges, and the amount of economic knowledge in the business community was increasing. The more thoughtful were familiar with, for example, the theory of over-importation.