The Gisborne Times. PUBLISHED EVERY MORNING. WEDNESDAY, JULY 21, 1909. THE BANKING RETURNS.

Gisborne Times, Volume XXVII, Issue 2559, 21 July 1909, Page 4

The Gisborne Times. PUBLISHED EVERY MORNING. WEDNESDAY, JULY 21, 1909. THE BANKING RETURNS.

Those who have been severely hit, by the depression which has existed throughout the Dominion of late will bo inclined to give more heed than usual to the statistical returns which indicate with a fair amount of accuracy the trend of our commercial operations. In another column we publish the quarterly returns of the Dominion’s exports and these show such a large increase as compared with those of the corresponding quarter of last year that a beneficial effect must inevitably be felt sooner or Inter throughout the Dominion in consequence. This increase of exports, amounting to the value of £1,381,910, is all the more accentuated by the fact that our imports have been reduced by fully half a million sterling. Closely associated with the .export and import ■figures are the quarterly banking returns which have just been compiled for the three months ending June 30th., and these confirm the impression that the community is commencing to live within its means. A year ago the advances exhibited the abnormal increase of over £3,000,000, the discounts were greater by £287,679, and the aggregate of tho fixed and free deposits exceeded the total of the advances a nd discounts combined by £156,469. The position disclosed by the returns under review is far different, and shows clearly how the Banks have curtailed the overdrafts in their determination to maintain business on a safe basis. The.following table is interesting.

Other securities 1,000,000 Advances, it will be noted, have decreased by more than £2,000,000, a factor of very great importance in considering the scope of our commercial operations. The liabilities. aggregated £23,536,002, a 9 against £24,600,034, and the assets amounted to £26,942,215, as compared with £29,480,724. The assets exceeded the liabilities by £3,106,213, while at the corresponding date last year the excess was £4,880,690. The liabilities and assets of each bank are shown below: Liabilities. Assets.

It will be observed that the assets of the Bank of New Zealand fall short of the liabilities by £704,064. Notwithstanding that the fixed deposits show an increase of £316,42/ , the deposits in the aggregate show a shrinkage of £684,892, as is disclosed in the table appended: June, 1908. June, 1909. £ £ Government deposits 1,503,741 1,142,038 Free, deposits ... 11,532,286 10,892,670 Fixed deposits 9,722,662 10,039,089 The Government deposits, it will be noted, are less than they were a year ago by £361,703. Dealing first with the fixed deposits, there is a gain of £316,427, in which all the banks, with th<J exception of the Union Bank, shared. The following table shows the movements as they affect each institution —

Juno, 1908. June, 1909. Bank. . £ £ New Zealand ... 4,655,540 4,907,309 .Union ••• ••• 1,331,686 1,309,271 N.S. Wales ... 1,658,716 1,678,731 Australasia ... 605,967 626,607 National 1,470,/o3 1,51/,171 9,722,662 10,039,089 It is not easy to account for this expansion, but the “Dominion” suggests

that so mo of it represents the proceeds of loans recently raised by local bodies in London. Tho chairman of the Bank of New Zealand at the annual meeting gave a list of these loans, and the total was £1,410,600. A good deal of the money was for redemption purposes; still a large amount was for new works. The fixed deposits at the close of the Juno quarter for seven years compare as under: — June 30. £ ' 1903 8,809,064 1904 8,869,984 1905 9,423,193 1906 J 9,867.273 1907 9,629,026 1908 9,722,662 1909 ... 10,039,089

The'ipast quarter shows the highest aggregate, and this perhaps is a matter for satisfaction. The free deposits, or current account balances, show a decrease of £639,616, and this is not surprising, in view of the over-importa-tion of last year and the dullness of trade. All tho banks; suffered under this head, as is shown below: June, 1908. June, 1909. Bank. £ £ New Zealand 5,294,393 5,102,549 Union 1,579,824 1,536,184 N.S.' Wales ... 1,546,754 1,375,562 Australasia 5. 1,258,447 1^122,737 National 1,852,868 1,755,638 11,532,286 10,892,670 In 1907 the free deposits reached the liighwater mark of £12,213,939, so that in two years there has been a reduction of £1,321,269. Taking a period of seven years, the free deposits for the Juno quarter compare as under : Juno 30. £ 1903 ... 8,937,545 1904 ... 9,581,663 1905 ... 9,469,665 1906 10,732,708 1907 12,213,939 1908 11,532,286 1909 10,892,670 Coming to the advances we find a decrease of £2,061,447. Twelve months ago the banks were compelled to lend to the utmost of their resources, hut over since they have been utilising all possible pressure to compel traders to reduce their margins. In this way, and by refusing to accept new business except of the most conservative kind, the banks have been able to call their money in. The position of each bank with respect to advances is shown below ;

— w 7 J J ' The discounts decreased by £307,588; the Union Bank, however, shows an increase of £1744, while the other institittions, except the National Bank, exhibit substantial decreases. Taking the figures for seven years, the advances and discounts compare as under:

Last year, owing to the unusually heavy increase in the advances, the free and fixed deposits combined were less than tho aggregate of the advances and discounts, but this year the position is reversed, the deposits being in excess by £1.889,377; this amount, however, is nearly £2,000,000 less than the excess of 1907. The following table is interesting :

These figures show a substantial excess of deposits over advances every year until 1908, when the advances exceeded the deposits by £156,469. Now the position is reversed, for the deposits are again the greater This time by £1,889,377. Taking the returns as a whole they indicate'that the Banks have been adjusting their finances to the needs of tho altered situation brought about bv the worldwide depression, and in making their own position safe they have compelled their clients to retrench veiy severely. The process has been an unpleasant one both for the banker and his client, but that it was a necessary one few will deny. There is now every appearance that the private finances of the Dominion are now in a thoroughly sound condition and that before the oft-boasted prosper itv of New Zealand will bo as pregnant a fact as ever.

—Liabilities. — June. 190S. June, 1909. £ £ Note circulation 1,666,616 1,623,670 Bills 91,809 85,064 Government deposits .. 1,503,741 1,142,038 Free deposits 11,532,286 10,S92,670 Fixed deposits 9,722,662 10,089,089 -Assets. — Coin and bullion 4,917,71S 4,956,114 Discounts ... . .. 2,274,841 1,967,253 Advances ... . .. 19,136,576 17,075,129 Government se curities ... . .. 1,254,927 1,250,304 n 11 ‘/<)7

Bank. £ £ New Zealand .. . 12,141,270 11,437,206 Union . 2,999,626 4,133,710

New Soutli "Wales 3,242,346 4,042,201 Australasia 1,896,318 3,400,228 National 3,556,442 3,928,870 23,836,002 26,942,215 22,758,639 22,073,797

June, 190S. .11106, 1909. Bank. .£ £ New Zealand ... 7,500,227 6,653,181 Union * ... ... 3,2-10,192 3,013,282 N.S. Wales ... 2,908,181 2,458,946 Australasia ... 2.905,258 2,522,447 National ... 2,582,718 2,427,273 19,136,570 17,075,129

Advances. Discounts. June 30. £ £ 1903 ... 11,366,111. 1,S44,241 1904 ... 12,381,851 2,059,145 1905 ... 13,218,030 2,108,841 1900 ... 14,10S,565 2,031,632 1907 ... 16,033,352 1,987,162 1908 ... 19,136,576 2,274,841 1909 ... 17,075,129 1,967,253

Juno. , .uejjusu/s. £ £ 1903 . . 17,746,60S 13,210,352 1901 . . IS,451,647 14,440,996 1905 . . 18,892,858 15,326,271 1906 . . 20,599,981 16,140,197 1907 . . 21,842,965 18,020,514 1908 . . 21,254,943 21,411,417 1909 . . 20,931,759 19,042,3S2