TOTALISATOR AND NOTE CIRCULATION

Auckland Star, Volume LXXIV, Issue 8, 11 January 1943, Page 2

TOTALISATOR AND NOTE CIRCULATION

ALL the proof that could be asked for as the necessity for the firm action to curtail spending-power in New Zealand which the Stabilisation Committee recommended has been provided by the totalisator during the holiday period just ended. In spite of decreased travel facilities, shortage of petrol and the large number of men overseas in the armed forces, the totalisator figures reached new records in every centre. In Auckland over half a million went through the machine in three days' racing, almost double the amount for the same three days last year. The huge increase in note circulation has facilitated the increase. Seven years ago less than eleven millions in banknotes served the purposes of the community. At the outbreak of the war the figure was sixteen millions. To-day it has reached the enormous total of £30,800,000. Th£ goods which were formerly available for holders of these notes are no longer there, because of import restrictions and the accumulating results of the liquidation of stocks in warehouses, stores and shops. There has been a simultaneous increase in bank deposits, but these have left a large residue of surplus cash still in the pockets of the people, and as a substantial part of the deposit expansion is on current account this also is available for continuous operation by cheque, thus swelling the total of purchasing power. With less goods to purchase and a rapid increase in purchasing power the dangers of inflation become very apparent. The totalisator figures shout the danger sign, and the urgency of the measures which the Government adopted on the suggestion of the Stabilisation Committee is more than ever emphasised. The only real question is whether they have gone far enough, and whether some of the money now so easily available on race days should not be -compulsorily saved for post-war requirements, and at the same time put out of immediate action in order to keep within reasonable bounds the prices of foodstuffs, fruit and the rest of the consumer goods for which shortages and a plenitude of ready cash are creating ever-rising prices.