Currency Shortage

Dominion, Volume 27, Issue 70, 15 December 1933, Page 13

Currency Shortage

Sir,—ln Mr. Wilson’s letter on the Central Bank and gold he states that the restriction of currency has adversely reacted on the community—thereby indicating that he supports the charge so irequeutly made that there is a shortage of currency and that its increase would ease the situation. • Tour correspondent is obviously placing the cart before the horse in suggesting that shortage of currency is _ the cause of the depression. Money circulates through the activities of business and trade— buying, selling, .and employment of labour. It is the will to use the money that is wanting; without this the mere issue of more currency would ouly increase the holdings of currency in the banks. ' Returns show that there has been very little variation in the currency issue for many years past, also that there is more money on deposit than, probably, at any time in our history. Another point' is that nowadays cheques are so freely used that they are for all practical purposes just as much currency as are coins and notes. It would appear, therefore, that the reason why money is not circulating so freely is not due to a shortage of currency so much in a lack of confidence and a fear to spend. If only those who have the income would pluck up euough courage to unloose their purse strings and spend a little more freely it would do more to improve business than any increase of currency.—We are. etc.. N.Z. WELFARE LEAGUE. Wellington, November 13, 1933.