TRADE'S BAROMETER

New Zealand Times, Volume XXXII, Issue 7026, 14 January 1910, Page 6

TRADE'S BAROMETER

; • THE BANK RETURNS. THREE MONTHS' FIGURES. The banks trading in New Zealand have issued their statements for the last quarter of 1909, in which are shown the average amounts of liabilities and assets of each, institution, with particulars under the principal headings, during the three months ended on the 31st December. These returns, always instructive and valuable to those whosa ( positions necessitate a close study of the financial barometer, have for the last year or so been of more general interest because of the light which they shed upon the causes of tho financial strinI gency which'a year ago was somewhat acute. The statements for the December quarter almost always reveal increased demands made upon the banks by the trading and nroducing communities. In the first place the exports for this I period are comparatively light, and almost invariably fall short, to a more or I less substantial amount, of the value of our imports, for which payment has to 'be provided. On the other hand the funds that have to be supplied to' farni- ' crs for the preparation and removal of the season's clip and crops take effect most heavily in this quarter. In this respect, however, the returns under consideration furnish a pleasing contrast with those which we had to review a year ago. I DEPOSITS AND DISCOUNTS. We will compare the totals under the principal headings of the summarised return, firstly with those of the September quarter, and secondly with those !of the December quarter .in previous years. The movements for the quarter show as follows: '..■ v September December quarter. quarter. Deposits, pte., free 10,530,370 10,173,072 Deposits, pte.,.fixed 10,148,749 10,588,172 'Deposits, Govt. ... 1,428,034 1,434,926 Discounts 1,777,425 1,835,471 Advances ... ... 16,393,281 16,944,099 Note circulation ... 1,525,554 1,573,951 Coin and bullion ... 5,028,490 5,090,845 In accordance with the usual experience of this quarter tho return shows substantial demands made upon the banks by their: customers. Advances, inclusive of discounts, show an increase of .£608,864 in this quarter, while deposits have been reaueed by .£217,875, a total of .£826,739 drawn from the banks. A comparison with the position existing a year ago gives, however, widely different results. The quarter upon which we have now- entered will be. affected by the realisation of- the wool clip and other products, by which large amounts will be brought to tho credit of the banks' customers in repayment of recent advances. Note circulation as usual in., the December quarter shows dncr-ease, amounting on this occasion to ,£48,400. It is quite possible that in course of time the banks may be inclined to restrict the issue of notes in view of the recent increase of taxation imposed upon this privilege. As, however, . the new tax had not come into force in the December quarter no such movement' is to be looked for in the return for that period, which, on the contrary, discloses, as we have said, a substantial increase. COMPARISONS.

We will now tarn to the comparison of previous yeaTS. Firstly, the. totals of assets and liabilities compare as follows for the last five years:— Dooember Assets' .Liabilities, quarter. £ , £ 1905 ... ... . 22,582,991 21,850,448 190 G 25,322,909 23,972,561 1907 ... -. . ... 28.145.701 24,560,113 1903 28,977,861 22,103,898. 1909 26,723,678 23,923,975 The chief factors in theso totals are the advances on tne one side and deposits on tho other, and the movements -shown above will be found to harmonise-gener-ally' with those disclosed below under those headings. 'Advances and discounts exhibit . the following jßteMepiants in the. same periods:— December Advances. Discounts. Total, quarter. ' £ £ £ ' 1905 ... 14,081,460 2,136,484 16,217,944 1906 ... 15,622,549 2,126,374 17,748,923 : 1907 ... 17,913,857 2,069,272 19,983,129 : 1908 ... 19,123,523 2,300,229 '21,423,752 ;.' ,1909 ... 16,944,099 1,835,471 .18,779,570 ,' Tho total, shows substantial shrinkage; and seems to be moving rapidly towards the level of 1908,, a;time .prior to the recent heavy inflation of .imports. Dct posits show the following changes:— . 1 Decern- ; . • .■■ . ■ ■.-.•■■.,■ .'■."••'' ber ■■■ Free.' ;. Fixed.. Total. , quarter. £ " ' . ■ £ £ :" 1905 ...'8,836,506 9,776,098 18,612,604 : 1906 ... 10,250,540 9,843,259 20,093,799 ' 1907 ..'. 11,136,009 9,651,293 20,787,302 :. 1908 ... 9,529,658. 9,892,396 19,422,054 ; 1909 ... 10,173,072 10,588,172 20,761,244 " ; A gratifying 'recovery '. is here seen, the falling-off of 1908 being practically ,re T covered. " . AN IMPROVED POSITION. ; Comparing private deposits with ad 7 vances, we , obtain the following results:— - ''■■,' 'Excess' Deposits. Advances.' Deposits. 1905 ... 18.612,604- 16,217.944 2,394,660 1906 ... 20,033,799 17,748,923 2,344,876 1807 ... 20.787,302 19.983,129 • 804,173 1908 ... 19,422,054 21,423,752 »2,001,698 1909 ... 20,761,244 18,779,570 1,981,674 •Advances. i ; The full effect of the recovery is here shown, the excess of two on the side of advances being changed into one of about equal amount on the-other sMe of the ledger, a total improvement of about four millions in the year. The shares of the several banks in the above totals compare as follow for ' the last two years: —' v ..;. deposits. '&.]. ;• 1908. ,- 1909. £ ' £ Bank of N.Z. ... 9,111,038 10,022,980 Union Bank ... 2,685,228 2,770,976 Bank of N.S.TV. ... 2,920,948 3,031,842 Bank of Aust. ... 1,682,537 1,674,908 National of N.Z. ... 3,042,256 3,210,538 ADVANCES. ■ 'I9OB. .'■' 1909., Bank 'of N.Z. ..-.8,563,994 7,401,884 Union Bank ... 3,464,020 '. 3,284,446 Bank of N.S.W. ... 3,306,773 2,552,301 Bank of Aust. ... ' 3,301,032 2,800,366 National of N.Z."... 2,787,932. 2,710,573 It'is interesting to notice that in varying measure, each bank has a share of, the increase of deposits and each a portion'of the decrease in advances. 'NOTES.AND COIN. ; ' . ' Note circulation' in the December quarter compares as follows : ■ ' ' ' \ .'' " '■ £ ' 1905 ... ... 1,468,83-1 1906 ...:... 1,611,220 1907 ... ~. 1,04.1,857 1908 -' ... ; 1909," .... :• This, ag-gregate ! of ; coin and bulllion compares - as follows: , : ■ ..'■'- .*■>:- - •' ■'■ £ '' - 1905 ... ... 4.052,173 -. 1906 ■ 1907 ' : ... 4.984,566 : - 1908 ; -...' ... ' 4,585,755 . IGO9 , ... . .'..'. : 5,090,845 Note. circulation shows again, as it did in • 1908,'' a 'shrinkage of between .£33,000 and -£34:000 in. the twelvemonth. Of course, this has nothing to do with the new taxation,-which, as we mention above, had not vet come into force. Moreover, the latest quarter shows an

increase. On the whole, the financial position looks extremely . healthy. ' It must be remembered, however, that the trade year 1908-9 only, so to say, paid its way. That is to say, that the exports, of that period sufficed' to pay. for the imports and to furnish' the means to meet the interest obligations' of- the Dominion without- refunding to the banks the heavy advances which they were -• called upon, to make in 1907-8. The season now current promises at present to be a prolific' and prosperous one; and if tire affairs of the community are glided by caution-and discretion, the. statistics ai" the end' of 1910 will show a very satisfactory - poeiti-an...; Frospeots point to a possibiiity of easier rates, provided the -Post' Office Savings. Bank and other Government- departments fall into line.