THE BANKING RETURNS

Otago Witness, Issue 3031, 17 April 1912, Page 10

THE BANKING RETURNS

FIGURES FOR THE MARCH QUARTER. (Fhom Oub Special Correspondent.) WELLINGTON, April 10. The banking returns for the March quarter are now available, and the figures show very conclusively that there has been a considerable amount of over-importation. The advances and discounts combined exhibit an increase of £3,229,160 as compared with tho corresponding quarter of last year, whilo tho fixed and free deposits together show an increase of only £546,856. As a rulo and under normal conditions the increase in deposits approximates to the expansion in advances, and since there is no such approximation in tho figures quoted it is obvious that there has been a big transfer of credit, and such a transfer would be rendered necessary by excess of imports. We have received value, but the value is in merchandise, which must in due course be converted into cash. The aggregate of tho assets is £31,427,451, and the liabilities total £28,195,668, tho excess of assets over liabilities thus being £3,231,783. The liabilities of the Bank of New Zealand in New Zealand exceeded tho a&sets by £1,508,163, but all tho other institutions show substantial differences in favour of the assets. As already stated, tho advances have expanded by £3,274,469, in which all tho banks shared, as the table appended shows:

Totals' £18,009,584 £21,234,053 £3,274,469 There has not been so large an increase in any March quarter during the last five years. The nearest to it was in 1908, when the increase was £3,083,750. The discounts in the past quarter aggregated £1,845,497, as against £1,790,806 in tho corresponding quarter of last year, exhibiting an increase of £54,691. Increases are shown by the Bank of New Zealand (£63,200), Union Bank (£24.445), and National Bank (£13,044). The decreases were:—Bank of Now South Wales (£37,052) and Bank of Australasia (£8946). The movements in the advances and discounts for the March quarter of eacli of the past five years are disclosed in the following table:

Now we come to tho deposits, and the three classes combined discloso a shrinkage of £345,740, .which arises entirely through tho decrease in the Government deposits. Tho fixed and free deposits show an increase of £546,856. The aggregates of the deposits compare as under:

The Government deposits have decreased by £892,596, und it is interesting to comparo the Government deposits oyer a, period of years. The figures are as under : March Quarter. IQO7 £2,415,216 Vqnp 1,748,902 (Sm '. J,224,4£2 |qis 2,336,167 1911 . 3,165,614 19X2 '.'.'. '.'.'. ' 2,273,018 The shrinkage in 1908 and 1909 followed on the heels of the American financial crii»es, and earlv in 1909 the Government had to retrench. It is to be hoped that there will bo no such repetition, although the banking figures show that the conditions are very much the same as they were after the American crises. Now wo come to the free deposits or current accounts balances, and these show an increase of £669,831, in which all the banks shared, the proportions of the Lnion Bank and the National Bank being exceptionally large. The figures of the several banks compare as under: — Bank Mar., 1911. Mar., 1912. Increase.

The fixed deposits for tho past quarter amounted to £10,372,756, as compared with £10,495,731 for the March quarter of lost year. There was thus a shrinkage of £122,975 in which all the banks, except the Bank of New Zealand, participated. The Bank of New Zealand registered an increase of £101.409. The free and fixed deposits for tho March quarter of five yeurs are appended:—

The movements in the fixed and free deposits on tho one hand and the advances and discount* on the other, as compared with the figures of last year, are extremely interesting, and in the tabic appended is shown how each bank has been affected :

In explanation of the above table, it may be stated that in the_ past quarter the fixed and free deposits with the bank of NewZealand increased by £416,155, while tho advances made and bills discounted by tho bank increased by £1,513,417, and so with the other institutions, tho banks of Australia showing a decrease of £109,563 in deposits and an increase of £461,148 in advances—the aggregates for the five instiru-

tions being an increase of £546,856 in deposits and an increase of £3,229,160 in advances. If we take tho increases and decreases of the aggregates for a period of years we get the following:

Tho figures tell tho history of the Dominion as clearly as possible. In the second half of 1907 the American financial panic was experienced, causing a big drop in tho prices of commodities. Tho effects of that panie wore felt in New Zealand in 1908, and thus we see an abnormal increase in. tho advances and a v-sry minute increase in the deposits. In the following year the process of liquidation and retrenchment was in full force, and the deposits decreased by over a million sterling, due in a large measure to the departure of people with money to Australia. In 1910 there was a complete recovery from the depression caused bv the Americans, and in 1911 normal conditions were restored. Wo are back now to the conditions of 190-3, and it is a question whether the recovery will be as speedy, as the position is complicated by the great coal strike, which has impoverished our best customers In spite of what, on the face of it, appears adverse conditions, the note circulation shows an expansion, proving that tho people do not as yet feel the necessity for economy, or, if it is felt, they are unable to economise. The circulation and metal reserve for tho March quarter of five years show as under:—

The need for caro and caution has been so repeatedly emphasised during tho past six months that it seems unnecessary to reiterate the warning-. The banking returns dearly indicate that tho Dominion will experience a trying time, which mav or may not be of short duration, and. while there is no warrant for alarm, there is much need for prudence aoid caution.

March, March, Bank. 1911. 1912. Increase. New £ £ £ Zealand 6,764,506 8,214,723 1,450.217 Union 3,163,694 3,692,203 528,509 N. S. Wales 2,625,423 3,081,939 456,516 Australasia 2,707,787 3,177,871 470,084 National ... 2.748,174 3,117,317 369,143

Year. Discounts. Advances. Total. 1908 . ..£2,095,795 £18,542,310 £20,638.105 1909 . .. 2,132,562 '18,186,909 20,319,471 1910 ... 1,815,317 16,178,128 17,993,445 1911 . .. 1,790,806 18,009,584 19,710.390 1912 . .. 1,845,497 21,284,053 23,139,550

Government deposits Freo deposits ... Fixed deposits March, 1911. ... £ 3,165,614 ... 12,974,315 ... 10,495,731 March, 1912. £ 2,273,018 13,645,446 10,372,756 Totals ... £26,635,660 £26,289,920

New Zea- x> land ... 6,101,005 Union ... 1,300,379 N S.W. ... 1,633,585 Australasia 1,478,022 National... 1,956,324 Totals £12,974,315 6,415,751 1,940,837 1.655,057 1,491,669 2,140,782 £13,644,146 314.746 140,508 16,472 13,647 184,453 £669,831

Free Fixed Year. deposits. deposits. Total. £ £ £ ISOS . .. 11,534,879 9,555,694 21.088,573 1909 ... 11,100,938 9.983,942 20,084,88C lfilO .. 11.525,410 10,570,352 22,155,762 1911 .. 12,974,315 10,495,731 23,470,046 1812 .. 13,644,146 10,372,756 24,016.902

Deposits Advaueos Bank. (Increase). Increase. ICgw Zealand . £416,155 £1,513,417 Union 63 258 552,954 New South Wales... 13,903 319,464 Australasia ... ... 109.563* 461,148 Nutiona! 163,103 382,187 Totals . £546,856 £3,229,160 'Decrease.

March Deposits Advances quarter. (Increase). (Increase). 1908 . ... £44,480 £3,083.750 1909 . ... 1,005.693* 318.634* 1910 . ... 2.070,882 2,326,026* 1911 . ... 1,314,284 1.806,945 1912 ! ... 546.S56 * Decre-a.se. 3,229,160*

March Coin and quarter. Circulation. bullion. 1908 . ...£1.640.783 £4.973.653 1909 . ... 1,587,051 4.712.935 1910 . ... 1.613.121 5.077.633 1911 . ... 1.661.463 5.030.761 1912 . ... 1,703.889 5,323,014