THE BANKING RETURNS.

Otago Witness, Issue 3018, 17 January 1912, Page 34

THE BANKING RETURNS.

DOMINION'S POSITION DISCUSSED. CFeom Oua Own Correspondent.) AUCKLAND, January 12. The summary of the banking returns of the Dominion and the figures showing the decrease of exports during the year were submitted by a reporter to a gentlem.ni who is visiting Auckland, and who for many years was connected with banking in New Zealand. He said the most disquieting element in - ihe statistics published was the very considerable decrease in the value of the exports of the Dominion. The excess of the exports ovei' the imports was, of course, the only source from which New Zealand could pay the interest on its debts. The interest on the national debt was roughly millions a year, and it was likely that the interest cm the municipal and private indebted ness came to an almost equal sum. The surplus of exports over imports was less than this seven millions that had to bs paid to .someone outside the Dominion. Ic meant that the debt of the community must be increased. The value 'of the exports was apparently £17.594.000. and though the value of the imports had not yet been announced, they were probably not far short of the exports. If that were so there would be little or nothing to pay. The interest had been made up by borrowed money or some form of increase in the general indebtedness. A serious question as to how long such a conditicn could continue was thus raised. There was no question of the value of the security offered by New Zealand to the outside lender, but sooner or later the time would come when no matter what the security was there would be a difficulty in finding lenders. With reference to the very large increase of 3£ millions in the advances made by the banks, ho said the main consideration in his mind was whether those advances had been prudently made. There was no doubt that during the past few years the funds of the banks had been accumulating in London, and had been employed at presumably comparatively low rates of interest. * These funds were due to the surpluses from realisation of produce in London. The only question was whether the conditions and trading circumstances justified the funds being advanced to the community in New 7 Zealand instead of being employed in London. The danger was that thess advances might have T>een made on secu rity difficult to release at short notice. If circumstances led the depositors to seek to withdraw their money, and the banke iiad to call in their advances, that danger might be manifested. There might be some justification, he adcted. for the viewthat the money derived by the banks from the people in New Zealand should be advanced within the Dominion, and the only question then was that relating to the prudence with which the advances were made The figures showed that the total advances was still a little less than the total of deposits, the being £35,557,000. and the advances £23.191.000.