Missing Millions.

Thames Star, Volume LXV, Issue 19373, 2 April 1935, Page 4

Missing Millions.

CURRENCY PROBLEM. INTERESTING SPECULATION. In an address on currency and monetary problems to members of the ’95 Club at the Reform Club, Manchester (states the “Guardian”), Mi\ Barnard Ellinger said that he did not know that there were any currency problems. In practice, England had been content to use banknotes instead of gold for currency for the last 20 years because they Avere legal tender and there was confidence that the right of issue Avould not be abused. In the 1928 Act provision was made to enable the Bank of England, Avith the consent of the Treasury, to increase the fiduciary issue when necessary owing to the groAvth of industry and commerce, and for other reasons, and not merely in time of crisis. The only problem that he knew connected Avith currency to Avhieh he did_ not knoAv the ans Aver was: “Where is it all?” The total note issue was about £470,000,000, of Avhieh about £70,000,000 was in the Bank of England, and about £100,000,000 in the clearing banks. That left £300,000,000, and it Avas estimated that the coin in circulation was about £70,000,000, so that the total currency was £370,000,000, or more than one-tenth of the total national income and seven times the estimated weekly sum paid out in wages and salaries. It was an interesting line of speculation to ask where the money was, and he was endeavouring to obtain an answer. Of course, that AVas by no means all the money AVhich was used in the conduct of the business of the country. The average AVeekly circulation of cheques Avas four or five times as great as the total amount of currency circulation, but all that A\ r as credit. As a rule, no currency changed hands.