PURCHASING POWER.

Waikato Times, Volume 118, Issue 19759, 14 December 1935, Page 9

PURCHASING POWER.

(To the Editor.) Sir, —i was one of those who read with delight some weeks ago a humorous letter toy your correspondent “Lowbrow" concerning the variety of opinions expressed in tills column. I regret to notice that his succeeding letters do not reach the same high standard. In his last letter he goes to considerable trouble to explode a fallacy which does not exist. He quotes figures to show that the slump was not caused by a shortage of notes and coin. To this we all agree. I have not heard of anyone who claims that there has been this shortage. Unfortunately for your correspondent the quantity of notes and coin in circulation bears no relation to the purchasing power of the incomes of the people. In proof of this, I repeat for your correspondent’s benefit figures issued by the National Political Federation showing the national income In 1928-29 as £150,000,000 and falling to £90,000,000 in 1932-33. When the national Income falls the earning power and the spending power of the peoplo are decreased. In other words, Hie volume of money circulating in Uie country dropped 40 per cent. Your correspondent’s . figures regarding the increase In notes and coin is probably accounted for by the fact that many people who prior to the depression had bank accounts, and used cheques, no longer have these accounts, and are compelled to transact their business in notes and coin. —I am, etc., G. HUNTER. Horsham Downs, Dooember 12.