BANK CREATED CREDIT
. TO THE EDITOR. Sib, —Those correspondents who have dogmatically denied that banks create credit will be somewhat at a loss to explain the actions of the new Central Bank in New Zealand. This bank will commence operations with credits amounting to £1,500.000—£500,000 from shareholders and £1,000,000 from the State. Mr Coates tells us that this Central Bank will then proceed to purchase the trading banks’ gold (£5,000,000) and £20,000,000 of credits in London, for which it will have to pay_ £25,000,000. A bank which is commencing operations with credits to the amount of £1,600,000 is to purchase assets worth £30,000,000. Where will it get the credits required to make these purchases? Obviously it will create them—as nice a piece of inflation as we have witnessed in New Zealand for many years!—l am, etc., Kurow, June 8. D. G. M'Miixan.,
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Otago Daily Times, Issue 22285, 11 June 1934, Page 12
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142BANK CREATED CREDIT Otago Daily Times, Issue 22285, 11 June 1934, Page 12
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