HOARDED MILLIONS

New Zealand Herald, Volume LXIX, Issue 21277, 2 September 1932, Page 11

HOARDED MILLIONS

UNITED STATES FIGURES FAITH LOST IN BANKS MONTREAL, Aug. 2S How Americans lost faith in their com- ; mercial banks, and to what a tremendous extent hoarding was indulged in, are illustrated by significant figures in a, striking review issued by the Royal Bank of Canada. The review is designed to show the' probable' beneficial results of the loan and reconstruction bills passed in the' dying hours of the United States Congress. The amount of Federal reserve notes outstanding in December, 1928, was 1.800,000,000 dollars (about £360,000,000 at par). By September, 1930, the value had decreased to 1,350,000,000 dollars. Then, because of hoarding, it gradually increased'to 2,660,000,000 dollars by December, 1931. From these and other figures it is deduced that there was a decline of 30 pef cent in the volume of money actually in use in the United States and Canada between March, 1929, and March, 1932. The expansion resultant upon the introduction of new money which Congress authorised should approximate 25 per centj. By the so-called Home Loan Act, £250,000,000 may be added to circulation privileges of the national banks of the United States, and the Royal Bank of Canada believes this will have the greatest ultima to influence in checking the downward trend in business and facilitating the creation of new conditions favourable for a general improvement. There is a direct attempt to ease term credits.