HOARDED MONEY WHILST POVERTY EXISTS

Otago Daily Times, Issue 22195, 23 February 1934, Page 10

HOARDED MONEY WHILST POVERTY EXISTS

TO THE EDITOR. Sir, —In your issue of the 17th inst. there is a paragraph, a portion of which reads:—"People who keep their savings in ' stockings' or other places are causing a lot of worry to the bankers and Government. Hoarding is on the increase, and it is believed by many experts to be one of the causes why the wheels of trade are so slow to move. At present it is estimated that something like £400,000,000 in gold and notes is being hoarded by individuals." In the same issue is a reference to the Central Reserve Bank which, inter alia, reads:—"We asked for £500,000 and we have been offered £2,500,000." I presume the former paragraph refers to Great Britain and the United States, but hoarding prevails also in New Zealand and Australia.. It is a fact that for many years now in this country money has been held in watertight compartments whilst industries and projects, of all kinds have been starving for financial support notwithstanding that 7 pei; cent, interest and over has been tendered for it. I quite agree that the hoarding of. money is always detrimental to the progress, industrially, economically, and socially, of every country, and I now ask, What is the difference between hoarding money in " stockings " arid other places, as the former report indicates, and hoarding it in banks and office safes. etc., as the latter report indicates? So far as New Zealand is concerned, it is unassailable that had this £2,500,000 been allowed to circulate at a safe rate of interest amongst manufacturers and industrialists there would have been no reason whiftever to establish a Central Reserve Bank, and thousands could have been employed, thus avoiding the acute poverty that at present exists, and also Dreventing the serious loss of trade that has taken place.—l am, etc., Practise What We Preach.