MONEY AND BUSINESS AFFAIRS.

Manawatu Standard, Volume LVII, Issue 203, 28 July 1937, Page 4

MONEY AND BUSINESS AFFAIRS.

TRADING BANKS’ RETURNS

(6y “H.J.K.”) The returns of the trading banks for the first half of the year show a big increase in the demand, deposits as compared with June last year. For the period under review the total was ±136,052,543, as compared with £30.605,016, an increase of over £5,200,000, but compared with March there is a decrease of about £840,000. The free deposits have a tendency to reach tli-eir peak level in the first quarter of the year and then to gradually contract in the June and September quarters, reaching the ‘lowest; point in September. That was the case last year, but since September the economic conditions have undergone vast changes, through the iUefease in wages, and also because of the higher price obtained for export produce. Furthermore, owing to the general advance in the prices of goods and services, traders must hold more liquid funds.

The time or fixed deposits show a big shrinkage compared with a year ago, the figures being £32,917,1)51), against £36,066,713, a decrease of just over £3,000,000. Compared with March this year there is an increase of about £1,000,000. The amount of the fixed deposits in January last year was as high as £37,033,607. The total of the free and fixed deposits amounts to £69,000,502, as compared \vith £66,872,441 in June of last year. The'total deposits are, however, less than they were at the end of May by. about £172,000. ‘ The advances and discounts at the end of June totalled £47,710.899, which was about £300,000 less than at the end of May. 11l Julio last year the total was ±245,077,019, so that there has been an increase over the year of about £2,700,000. The growth of : the advances is normal, for ui times ! of business activity traders can make fprofitable use of bank accommodation. ; Moreover, the higher prices of imported | goods are probably causing merchants i to draw Upon the banks. The excess of | deposits over advances amounts to £21,289,603, as compared with £21.795,425 at the end of Juno, 1936, so ' that there has been practically no alteration. The note circulation at the end of June amounted to £8.858,850, as compared with £7.221,938, the increase being about £1.600,000. Compared with May the note circulation is down by about £400,000. The circulation wa? at its peak in December, when the amount stood at £10,443,223. This was due to the vast amount of travelling done by the people. The wage increase came into force in September and a great many people took advantage of their improved circumstances to visit other towns and places of interest. It is doubtful whether there will be quite so much travelling this year because of the increased cost and the inability to save, owing to the higher cost of living. The London funds of the trading banks now total £12,174,139, having risen from £7,361.885 at the end of January. Compared with June of last year there is a shrinkage of over £5,000,000. In addition to London funds the banks hold £5.027,435 elsewhere, and their total credits amount to £17,201,574, against £23,216,993 at the end of June last .year. The sterling exchange held bv the Reserve Bank last week was £20,589,828, an increase on the previous week of £492,881. Advances on dairy account at £4.704,920 show a decrease of £123.684. This account should continue to show decreases for two or tliree weeks longer. The note circulation is shown at £12,580,642. INTERNATIONAL TRADE. I The opinion is gaining ground in England that efforts should be made to extend international trade, and the Prime Minister of Belgium (Dr. Paul Van Zeeland) has recently given his attention to this matter. All the industries in Europe, and particularly in Britain, are working to capacity, and what are they to do when the demands for rearmaments are no longer to be looked for? They must find some outlet for their manufacturing capacity. It oan be safely assumed that when the time comes British manufacturers will make serious efforts to secure foreign orders, and in tile resultant competition prices will be cut. Hence the need to promote a greater measure of international trade.