RESERVE DEPRECIATION. •
Needless to say, the Australian banks have been hit at the present time not merely by condititnis in-Australia, which huN !reduced earning power, but also by the-greatdePieciation in the exchange. So far as can be judged, that depreciation has probably reached its limit, and the chances.' fftvour an On- provernent rather than a' further decline. Nevertheless, the Directors of the English, Scottish and Australian Bank have wisely decided "to meet the positiOn outright by transferring from the General Reserve a sum of 11;585,000, which is suffi- cient to cover fully the depreciation as Measured by the present heavy discount on Australian currency. - This is taking, what may be termed the ultra-cautious view, and the—Directors express their opinion that the depreciation is only a temporary phase and " that the amount now allocated, will ultimately be restored to the GeneralineServe FUnd." That anticipation, I believe, will be found to be'. justified, but meanwhile the Directors have taken the course most consistent with a sound conduct of the accounts. ' The balance sheet" shows a liquid position, 'the total of Cash during the' year linving increased from £5,398,000 to £8,589,000.-
A; W. NJ
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