BANK STATEMENTS.

New Zealand Herald, Volume LXVI, Issue 20383, 11 October 1929, Page 14

BANK STATEMENTS.

RECORDS FOR THE QUARTER

YEAR'S GAIN OF DEPOSITS.

EXPANSION IN ADVANCES.

EXCESS REDUCED TO £5,000,000

[RY TELEGRAPH. —OWN CORRESPONDENT.! WELLINGTON. Thursdny.

Tho notablo features of Iho bank statements for tho September quarter, in comparison with those for tho third quarter of last year, aro a substantial increase in deposits, mainly in the fixed class, and a much greater increase in advances, with tho result that tho excess of private doposits over advances has been reduced from £7,476,594 to £5,030,634. Both doposits and advances aro at record figures for tho September quarter. It is noteworthy that as compared with tho June returns, deposits aro lower by £2,483,268, while advances have increased by £2,130,781. Tho second quarter showed tho post-war record excess of deposits, £9.644,683. Details of tho three classes of deposits for tho September quarter of this and last year aro as follow: — Sept. 1923. Sept. 1029. Increase. Govt. •.. £ I .(>28,(!87 £2,799,140 £1,170,4 53 Free .. aU.344.9Cl 23,908,295 1123,341 L-'ixud- .. 29,251,004 30,000,331 1,319,207 Totals .. £54.224,705 £57.307.700 £3,143,001 The gain in tho demand deposits is normal, but Iho increase in the time deposits is most marked. Distribution of Deposits. Dealing with tho freo deposits held by Iho several banks as compared with the September quarter of last year, it is noted that all except tho Commercial Bank show increases. There was also a rather large increase in fixed deposits, in which all the banks shared except tho Union Bank, Details aro as follow : FREE DEPOSITS. Bank. Sept. 1928. Sept. 1929. Increase. N. Zealand £10.903,927 £11,284,524 £380,597 Union .. 2,505,702 2,042,010 70,341 N.S. Wales 2,523,190 2,598,511 70.318 Australasia 2,208,109 2,313,707 45,058 National .. 4,000,371 4,121,387 00,010 Commercial 1,018,049 1,008,027 *10,022 Totals .. £23.344,951 £23,9G8,295 £023,341 FIXED DEPOSITS. Bank. Sept. 1923. Sept. 1929. Increase. N. Zealand £14,272,305 £15,224,528 £952,223 Union .. 3,355,033 3,280,103 *09,530 N.S. Wales 3,801,939 4,072,190 207,257 Australasia 2,063,708 2,822,955 159,187 National .. 4,472,080 4,518,422 40,342 Commercial 022,339 070,127 53.788 Totuls ..£29,251,004 £30,G00,331 £1,319,207 •Decrease. The aggregates of tho freo and tho fixed deposits are the highest in any September quarter in tho last five years, as appears from the following summary:— Sept. . Quarter. Free. Fixed. Totals. 1925 ..£20,811,702 £20,941,003 £47,753,425 1920 . . 21,907,901 21,074.802 45,982,853 1927 .. 21,815,501 23,398,240 45,213,750 1928 .. 23,341,951 29,251.004 52,590.018 1929 . . 23,908,295 30,000,331 54,508,020

The big increase in tho fixed deposits may revive discussion of "idle money." However, as Professor Gustav Cassel has recently observed, tho view that such money will lie idle pending its definite employment by its owner is entirely erroneous, since tho bank uses it to increase its own assets, whether in tho form of loans or securities. Movement of Advances. The advances show an increase of over £4,500,000, in somo part duo to tho increase in imports. All tho banks shared in tho increase, as shown below :

Bank. Sept., 1923. Sept., 1929. Increase. New Zealand £18,090,372 £20.738.919 £2.042.547 Union . . 5,100.038 5,702,100 050.128 N.S. Wales . 5,022.807 5,903,411 280.004 Australasia . 4,004.590 4,975.432 310.842 National . . 8.435,788 9.519.910 1.0.34.152 Commercial . 1,421,859 1.043.73G 221.877 Totals . . £43.917.451 £48.543.004 £4.59G.150 Tho discounts have fallen by £177,582 from £1.171,970 to £994,388. The discounts and advances together amount to £49,537,992. which falls short of the aggregato of tho free and fixed deposits by £5.030,634. The banks were overloaded with funds a year ago, but this year they have managed to find investment with tho public for a great deal more of their funds. Taking the September quarter of each of the last five years the excess of deposits over advances is disclosed in the table below :

September Quarter. Deposits. Advances. Excess. 1925 .. £47,753,425 £44,975,300 £2,778,005 192(5 .. 45.982.853 48,323.940 *2.341,093 1927 .. 45,213,750 43,815,231 *3,001.131 192S .. 52,590,018 45,119.421 7,470,591 1929 . . 54.508,620 49,537.992 5,030,031 •Excess of advances.

While the deposits have increased by £1,972,608, as compared with a year ago, tho advances and discounts together have expanded by £4,418,568. Tho nolo circulation shows a slight increase as compared with the corresponding quarter of last year, but coin and bullion have contracted. Tho latter cover the note circulation with a million to spare, tho average circulation having been £6,272,353, as against £6,166,287 last vear, while the metal reserve lias declined from £7,350.045 to £7,109,873.