THE CURRENCY BAROMETER.

Auckland Star, Volume LXV, Issue 307, 28 December 1934, Page 6

THE CURRENCY BAROMETER.

It was mentioned in the reports o£ Christmas trade in Britain that the aggiegate of notes in circulation was £12,000,000 higher than twelve months previously, and naturally this was taken as a sign of better times. This return was for December 19. The return that appears in our commercial news to-day is for the following week, ending December 26, which includes the of the Christmas rush. It shows a still further increase, for the total this year is £,405,164,000, against £391,981,000 on December 28, 1933. The note circulation during the whole of 1934 has been highei than °in 1933, but at Christmas time the velocity of money would be exceptionally rapid, so that these twelve or thirteen millions would add much more to purchasing power than their face value. The Bank of England watches the business world very closely, and these extra millions would not be put out purely to tempt the public. They would be issued to meet a real need. Moreover, this increase in currency is not the only sign t at the year now at its end has been more prosperous than the previous period. By the middle of November the London Bankeis Clearing House had cleared cheques amounting to £30,674,000,000. This figure is interesting for the proof it gives of the vast amount of business done by cheque—a fact that troubles some currency reformcrs-but a comparison makes it still more important. The total was £2 693,000,000 higher than the corresponding fWi're for 1933. Attention was drawn particularly to the figures bearing on London trade (exclusive of the Stock Exchange and inter-bank transactions) and on provincial business. London was £84,331,000 up in 1033, and Manchester,. Liverpool and Bristol showed increases.' All this shows that the nation has had more money to spend, and, while one should not overlook the large aimy I of unemployed —happily a diminishing aim} — it is reasonable to conclude that Britain is substantially in a better position than at the end of 1933* and that of the great nations she is in the strongest economically.