BANK DEPOSITS INCREASE

Poverty Bay Herald, Volume LV, Issue 17472, 22 January 1931, Page 8

BANK DEPOSITS INCREASE

MONETARY PROBLEMS GOLD STANDARD POLICY Mi;. McICI-'.XXA'S CONCLUSIONS (British Ol'licial Wireless.) Pvec. 1 p.m. RUGBY, Jan. 21. Addressing the annual meeting of shareholders, Mr. Reginald McKenna, chairman of the Midland Bank, Ltd., referred lo the fact that the bank deposits were increasing and now constituted a. record. Bank advances had fallen because the demand was below wdiai the banks were prepared to meet. Consequently, they had been driven to employ more of their resources in buying Government securities and bills. Failure to use Hie money had been attributed to the widespread feeling of depression. Non-use of money, however, need not always arise from this alone. It might at times be the consequence of excessive saving. Whatever blessings thrift might confer on an individual, there were limes when, judged by the interests of (be general economic welfare, it might be carried to excess.

lie would ascribe the economic troubles of (hi! world to three main causes: First, non-distribution of gold duo to the relative inability or unwillingness of creditor countries to lend to debtor countries: secondly, the piublio had not yet recovered from Hie reaction from the American stock market collapse; thirdly, the effects of the long period of deflation in Britain still being Felt. He claimed that if a monetary policy could do little in the present crisis to stimulate a recovery, at any rate by keeping money plentiful and cheap conditions favorable to a recovery could be preserved. THE FLOW OF COLD Discussing whether a recurrence of a catastrophe like the present depression could be avoided, Mr. McKenna said that after examining the recent history of the matter he had reached the conclusion that the gold standard was not working as indicated in the light, of prewar experience, which by Hie flow of "old into creditor rountries should have caused an expansion of money supplies and a stimulation of prices. The United States and France, however, offered no more resistance to the fall of wholesale prices than ihe debtor countries. Moreover, America had shown Utile readiness lo lend abroad. France was closed lo foreign, borrowing, and Circa I Britain had feo small a surplus. lie was of opinion that ihe problem of the world's gold supplies was international in character ami could be dealt, wilh only by co-operation among the central banks. There was already evidence of a general willingness to cooperate, but no indication yet of continuous common action based upon an agreed policy. The first essential must be a full recognition of the imperative need'of study for a general level of eomliiodily prices. Trade would not prosper while, the. world's monetary units were subject (o sue!) wide variations in the purchasing powers.

Air. McKenna said the present crisis was one of tuider-eonstimption, and until sufficient confidence returned to stimulate buying stocks wero not likely to" dwindle nor production to increase. It was not likely that there would be* a marked revival of confidence unlil prices showed a tendency to harden. "When the present trend of prices has been arrested and reversed we shall see the end of the growl Ii of unemployment," he concluded. BRITISH BANKS AMAZING EXTENSIONS BIG FIVE'S 8000 BRANCHES LONDON, Dee. 1. Our amazing banks are still prosperously extending their vasl organisation despite all our post-war industrial troubles. One of the niosl remarkable aspects of Hie rapid extension of banking facilities in ibis country to all sections of the community is the enormous amount of building and acquisition of new property .which is now taking place, The "big five'' clearing banks have now nearly 80C0 branches throughout the country and are still constantly opening new premises, and thereby adding to their enormous assets iu real estate property. A very large proportion of bunk properties stand on valuable sites and the amount invested in, bank premises is a hidden reserve which is never fully disclosed in the mass of statistics produced by the banks. in London alone the big five have many more than 1000 branches, many placed on valuable corner sites and mostly iu busy quarters. The- growth of brans-h banking since tlie war is well illustrated by the figures of the Midland Bank, which is still claimed to be the biggest bank in the world. This bank has now 243 branches in Loudon. Five years ago the number was i2OO, while ten years ago the bank had no more than'l64 branches in London. Tho cluster of palatial head offices now taking shape, with the Bank of England as its core, around. Thread-needle-street alone represents renmrkablo extensions of banking services and a, vast fortune in estate value. Alt bough tho accounts of the banks show among their nssets certain amounts for bank premises, this is purely a book figure and gives no adequate indication of the real value of the properties. For such proportion of expenditure on property as is from time U» time placed to these accounts is year by year written down by allocations out of profits. Nevertheless" in the last annual reports of Hie "big live" bank premises accounts totalled the stupendous figure of £32,938,824. And still they go on extending. NEW SERVICES Is il because more use is being made today by the public and by industry of the multitude of services available to the community'! 1 The small man is catered for a.s fully as are the complex credit requirements of industry. Among lb.' newest innovations is a big bank's new head oihee safe-deposit service. I ''or a mere 10:; per annum anyone may renl not only one of fin smaller sale", n lbe new strong loom, but the use of a. series of privale rooms iu cadi or which .a. telephone ami other facilities are installed, for conducting interviews or of her business Iu strict privacy. If dm banks a>ro prosperous I hey give in ret.on an astonishing service to the community. Both (hi* prosperity and the service are built up from year. l ', ot experience which is unrivalled anywhere in (he world. For all our troubles, we wcxcv fear such banking disasters as have occurred iu Paris and America.. Tho capital of Hie "big five," amounting to JJ54.559.243, is spread among more than 500.000 shorohofders.