MONEY IN CIRCULATION.

Auckland Star, Volume LXVIII, Issue 160, 8 July 1937, Page 6

MONEY IN CIRCULATION.

A COMPARISON WITH 1931. (To the Editor.) A new director of the Bank of New '/ aland is credited with saying, at a company !• ■ •;, _- last week, that "the total volume '■'. :r, ■: v in circulation in Xew Zealand i- revert; :. "W <\ pounds less than it was in I!K!l.'' T > sv •■! generalities, I think we may clir*:••^.n<.i 3s negligible the small amount of c •'■ i in. -the Dominion, and begin with the i>ank ••..-. \t>*. r \ \<." latest return puts this at £'.»,040.nf0. «;-,-.- „ a p in 1931 the amount in circulati".-. al-ovi highest in the December quarter. . \ ilo 1 only £5,92fi.000 for the thirteen we,' "■.- ;..-., !1; involved. If money irieludes i.> • ■*,">;• ;:;'. '' note circulation, towards whi:h -',-. ~:'.: o could have raided the circulation i," i; "y h.vl been so inclined, like they alway- d i ■.-.,". i: at Christmas time, the "free - ' dep.>-■'■■< '. . ~ banks were £3«.GC7.000 at last ad\i -. ~_•:,;. -t the highest quarterly average of tUs.:::' 1 .! •■> in 1031. almost exactly half. Xoh dy \;u..** how often the notes in circi.'.itkm n-fiaKv circulate, and in any case 'hey are onlv u-i-d for small payments. On the other i;.n..\ \'..v largest transactions are made hy ch , . ■- on the banks, and these arc known exu \]y. In the first three months of ibis year the tveev circulated by bank cheque-, ox !:idit!L r ' '■' ivernment ]«ymetiw. amounted t>> HJ.".:'-77 !.'•'', whereas iii the same quarter of J')"! -ho amount thus circulated wa- "illy CKi.V.JimVmh.i. Tf we add the potential cir<-'ila» ion ;■• -p: .■-■■>,:i.,| hy the deposits in the Post Oili.-e and. > tl.-.r savings hanks, -which are al.-o always .ivnilaTjlf to the. public, these also show an in re.i~c o\.••;• the amount to the credit of dopo-hors in ]OMi. Considering, therefore, the pnormou* in Tease in the volume of money in circulation or available, which lias already taken pi i -e -in— 1 the depth of the depression. apparently d;--proving the statement of the l>:tnk director quoted, what we want to know is the exact procedure by which "an adequate expan-ion of purchasing power can be brought about'' 'by controlling the value of the pound not" and by further expanding when necessarv the qnantitv of money in circulation. FIX WT7AT..