THE BANKING RETURNS

Taranaki Daily News, 18 January 1930, Page 14

THE BANKING RETURNS

SOUND POSITION SHOWN IMPORTS MOUNTING UP. NEED l-VK UVIRI'AH AIEN V Ci’rnxd our WasW One Own Cw 1 Wcll'ingtmn -I*'- lx The banking rclnm* Uw quarter were awaited with interest, and nw ihfd they nave two made available they rather oouL'ibbd the more pessimistic win? expoct.M vae tyr urcs to show a serious fclrW con.Va'run. It can bo readily admit tod Umt the monetary condition to-day is wt as gssnl at it 'Was 12 months agy. beo.answ tho'.e has been a Mmrp tall in prvdmxs. The salient features of the returns are that compared with the JVeembor quarter ot 1928, Government deposits have shrwk by £412,288, the demand, or free deposits, have been increased by £SIS.T-U>, and the time fixed deposits by £l,l-16.581. These figures deal with the credit side et the public. Omitting Government deposits, the free and fixed deposits aggregated £53,356,733 as compared with £51.661,406 in the December quarter of 1928, and £44,236,650 in 1926. Last quarter's deposits were the largest on record for the close of the year. This, cannot 'by any stretch of imagination be regarded as adverse. The advances or overdrafts increased by the substantial sum of £5, &01,903, but the discounts decreased by £05,'076. The advances and discounts represent the amounts borrowed 'by the public from the banks, and together they show an' increase of £5,766,827. This appears tb bo entirely due to the expansion in imports. Bank advances make ■bank deposits, since the net increase in bank advances compared with a year ago was £5,706,827,. we should expect to see the whole of. it expressed in increased deposits, 'but the increase in the free and fixed deposits is only £1,659,327, so that we have to account for £4,051/100, If we examine the import figures, if .will be seen that for the year ended September 30, 1929, the imports totalled £48,199,185 as compared with £44,140,402, an increase 0f.£4,058,782, which more than accounts for the £4,011,500 excess of advances.

It is possibe to justify the expansion in imports. For the 12 months ended Sept, 1928, our exports were valued, at £56,248, 593, and the balance of trade that year was very much in our favour, that is to say we had considerable purchasing power. For the year ended September 3'o, 1929, our exports were valued at £56,174,333, or only slightly less than in 1928, and although imports expanded the excess of exports over imports, or tho balance of trade, was still in our favour. There was justification for the increase in imports in the 1928-29 period, but with the fall in export values it will now bo necessary to restrict imports. Unfortunately, importers have to make up their indents many months in advance, and it is not always possible to foresee the trend of economic conditions. It is rather a matter of regret that the increase of imports during the past produce year was mainly in luxury items. In the nine months to September 30 last the import of motor vehicles numbered 22,605, against 11,215 in the corresponding nine months of tho previous year, and the value was £3,279,935, against £1,681,311, an increase of £1,598,624. Motor bicycles show an increase for the same period of £12,368, tyres show an increase of £134,724, and other materials an increase of £42,712. These increases are not far short of the total increase of the twelve months.

It becomes necessary now to greatly curtail imports, which should not bo a very difficult matter. This necessity arises from tho fact that export values during the current year will be appreciably lower than a year ago. Wool has been failing ever since July last. Our exports of wool alone will realise about £4,000,000 less than last season, if the shrinkage is not more. Our other main products, like meat and dairy produce, have gone back in value. It is contended by some that while the purchasing power of consumers has contracted the production has increased, and to stimulate consumption of the increased production prices must be lowered and brought within the purse limits of the masses. Stocks of merchandise which under normal conditions would not be excessive have now become so. Extravagance and waste must be cut out, and hard work must now be our duty. . If we don’t face the adverse conditions as they ought to 'be faced they will linger with us.