DEPOSITS AND INCOME.

Waikato Times, Volume 118, Issue 19758, 13 December 1935, Page 9

DEPOSITS AND INCOME.

* (To the Editor.) Sir, —Mr Hunter’s letter was considered at a meeting of the class this evening, and the discussion was interesting. I was instructed to reply | at once. The national income of New Zealand, he said, fell by 40 per cent. Well, as far as we can ascertain, imports fell in the same time by over 50 per cent, and internal trade by probably as much; but the fact remains that the money on deposit advanced. This seems to indicate that it was the loss of velocity, and not a shortage, that was the chief factor. People preferred to save all they could rather than spend, and they did so because "of lack of confidence. As for tlic statement that the bulk of the borrowed money was put into circulation in the Dominion wo should like a few facts. Members of the class knew of some loans spent completely on the purchase of materials overseas. It never went into circulation. We shall study, as best we can, the ultimate course of the money so spent, but if, as some correspondents have stated, Hie trading banks recently built up their overseas balances to about £40,000,000, then the destination of some is obvious. Then interest down the years would account for an immense sum, and the rest, so some of the class think, is represented in Hie roads, buildings, improved farms, railways, and other forms of wealth. If Mr* Hunter’s idea is that there should still be £080,000,000 in New Zealand in money, then we cannot follow him. it, means that the Old Country would have millions of millions on the same basis. Wealth, we take it, cannot be consumed. —Wc arc, etc., PRIMER I. Hamilton, December 12.