PURCHASING POWER.

Auckland Star, Volume LXV, Issue 45, 22 February 1934, Page 22

PURCHASING POWER.

"Simple Simon's" statement that it requires only a small fraction of its face value to produce a £1 or £10 note and other divisional coinage, and therefore the community can be supplied with its currency requirements at small cost, is quite true. Upon analysis the currency of all modern countries, including New Zealand, is found to be composed of approximately 99 per cent cheque currency, and in many cases less, than 1 per cent of notes, silver and copper coins. Accordingly, the issue of the latter is not of any great importance, but the issue and control of cheque currency, which is really bank credit or banker's money, is of outstanding importance. Theoretically, the issue and control of the currency is the prerogative of the Crown, but this privilege has ' been usurped by private companies. As a-result less than 1 per cent of the currency in circulation is King's Head money. The balance, 99 per cent, is issued and controlled by private financial institutions, who keep currency, money or credit in short supply as .a matter of policy, irrespective of the people's -requirements. Actually, money or credit costs nothing to create, just figures in a book, and is, therefore, cheaper, than "Simple Simon" assumes.it to' be. " " SAM WARD.