The Daily News THURSDAY, OCTOBER 11, 1928. THE BANK RETURNS.

Taranaki Daily News, 11 October 1928, Page 8

The Daily News THURSDAY, OCTOBER 11, 1928. THE BANK RETURNS.

The financial position of the country can be ascertained and tested by examining the banking returns from quarter to quarter and year to year. The citizen who possesses average ability and knowledge of general business methods, is aware of the fact that free deposits mean the balances of the current accounts of the customers of the banks, while fixed deposits mean money that is deposited with the banks for certain fixed periods and upon which interest is paid at rates varying with the length of time over which the banks have command of the money. The banking figures for the September quarter clearly indicate that the economic recovery of the country, which was in evidence in the first quarter of the year, is still proceeding. Despite the misfortune of so much unemployment, there is no getting away from the fact that the present financial position of the Dominion is considerably better than was the ease at the corresponding period last year. This satisfactory state of affairs is evidenced by the position of the deposits, for both the free and fixed classes show increases, while advances and discounts have contracted as compared with a year ago. These desirable movements of money indicate that business requirements have been met this year more easily than during ' 1927, therefore an appreciably less amount has been borrowed temporarily from the banks. As a matter of fact, all the banks disclose increases in their holdings of current account deposits. This feature of the September quarter of the present year, coupled with the decrease of advances, indicates that imports have been kept within reasonable bounds. It is a distinctly healthy sign of economic recovery when current account deposits show an increase of over a million and a half as compared with the corresponding

quarter of last year, and it is still more stimulating to find an excess of nearly six millions in the fixed deposits- Another matter for congratulation is that the fixed and free deposits, taken together, amount to more than 52| millions, a considerably larger total than has been in evidence for the September quarter for the last five years. These influences are reflected in the relation of deposits to advances, which exhibits a complete change as compared with the position at the end of the September quarter last year and in 1926, for there is now a substantial excess of deposits over advances, while for the last two years the advances exceeded the deposits. Inasmuch as last September there was an excess of advances amounting to well over three and a half millions, while in the corresponding quarter this year the deposits exceeded the advances by nearly seven and a half millions, it is evident that the financial position has improved to the extent of over eleven millions, indicating that during the past year the clients of the banks have been so much better off. The only unsatisfactory feature of the returns is that relating to note circulation, the figures for which demonstrate that since 1925 the pocket money of the people has been contracting, with the result that local trade has become depressed. On the whole, however, the returns indicate the advent of better times, and for that the public should be thankful.