BANK DEPOSITS SHRINK

Wanganui Chronicle, Volume 73, Issue 370, 13 September 1930, Page 9

BANK DEPOSITS SHRINK

£2,000,000 IN SEVEN WEEKS FIXED CLASS AT NEW RECORD NOTE ISSUE BELOW £6,000,000 A large reduction in the total amount of deposits in the commercial banks is shown by the weekly returns, up to August 18, published in the Abstract of Statistics. Fixed deposits risen to a new record, but in spite of the increase in that class, the aggregate of all deposits, including those at the credit of the Government, declined between June 30 and August 18 by £2,022,984. In the same seven weeks of last year, the reduction was £1,388,123. Government deposits have been exceptionally large during the whole of this year, as a result of local borrowing. The highest figure was £5,382,445 at April 28, but by June 30, the amount had declined to £4,969,892, and by August 18 to £4,342,736.

Free deposits amounted to nearly £25,000,000 at March 31 and to £22,519,261 at June 30. By August 18 they were down to £20,396,877, a reduction in seven weeks of £2,122,384.

For over three years the sum of fixed deposits has risen. It was about £21,000,000 just before interest rates were raised early in 1927. A year later, £27,000,000 had been passed; another million was added between April 23 and May 21, 1928; and another by July 2 of that year. The £30,000,000 mark was passed by April 15, 1929, and the return for July 7 this year showed £31,000,000 for the first time. The total of £31,701,681 at August 18, which represented an increase in seven weeks of £726,556, was nearly 61 per cent, of all private deposits, the highest ratio ever recorded.

All classes of deposits in the latest return amounted to £56,441,294, which was £2,022,984 less than the total at the corresponding date last year. Exoludiiig Government funds, the aggregate of fixed and free deposits was £525)000 less than advances and discounts. The latter, totalling £52,623,600, were only £6674 more than at June 30. In the corresponding period last year advances increased by £1,407,000. The latest return is remarkable also for the reduction of the note circulation below £6,000,000 for the first time for some years. The total at August 18, £5,915,847, was lower by £519,297 than that at June 30.

The aggregate of free deposits and note circulation, £26,312,724, was £3,500,000 less than at the corresponding date last year. The difference may bo regarded as a measure of tho reduction iii the purchasing power of the general community. Part of it is due to the increase of £1,300,000 in Government deposits.