The Wanganui Chronicle MONDAY, DECEMBER 4, 1933. THE BANK OF ENGLAND RETURNS

Wanganui Chronicle, Volume 76, Issue 286, 4 December 1933, Page 6

The Wanganui Chronicle MONDAY, DECEMBER 4, 1933. THE BANK OF ENGLAND RETURNS

■pilL J lank of England returns, when reviewed for the month of November, reveal that there has been no large influx of money on balance into England, despite all that the descriptive writers, who add to the brightness of the cables, have to say on the matter. The note circulation on November 1 was £372,197,364, and on November 29 £370,201.607, while the gold held by the bank has remained almost stationary. The notes

held in the banking department moved from £78,249,667 to £80,436,676 during- the month. The note issue, then, has contracted by £1,995,757, while the banking department has increased its note holding by £2,187,009, which means that the notes in the hands of the public have decreased by £4,182,766. There was also registered between the two dates a decline in the bankers’ deposits at the Bank of England. On November 1 they stood at £110.643,752, and on November 29 £106,910,361, a decline of £3,733,391; so here again there is evidence that there has been no increase of deposits. When deposits increase the normal effect on the bankers’ balances at the Bank of England is for them to move forward, and deposits and advances usually move in harmony with each other. British banking contemplates having cash reserves at about 11. or 12 per cent., that is Io say, money in the till and money at eall at the Bank of England together make this ratio to liabilities. At Jv.ce 30 last the ratio of cash to total liabilities was 13.1 per cent., and on the same date this year 12.6 per cent. The decline in the notes in circulation indicates a drop in bankers’ till money, while the fall-off in bankers’ deposits with the Bank of England might indicate a contraction of business generally were it not for the fact that public deposits have moved from £7,541.285 on November 1 to £13,637,336 on November 29, a difference of £6,096,051. The transfer of credit then, has been from the public to the Government departments to the extent of the last-named figure. Government securities held by the Bank of England on November 1 totalled £77,020,905 and on November 29 this item was reduced to £70,941,066, the difference being £6,079.839. During the month, then, the Government has reduced its indebtedness to the Bank of England on securities held by £6,096,051, and increased its deposits by £6,079,839, which together makes an improvement of £12,175,890 as between the Government and the Bank of England. The month in the money market, then, has witnessed an improvement in the Government's credit position with the Bank of England, a decline of currency in use by the public, and a decline of bankers’ balances with the Bank of England.