F.409
BRITISH FINANCE AND COMMERCE
by
ROBERT MACKAY.
49
Currency and Banking.
The holiday demand for currency has
created another high record in the note issue of the Bank of
England. According to the most recent figures the total issue
is £520 millions, and this is £23 millions above the total in
the corresponding week last year. When taken in conjunction
with the remarkable increase in employment this year, these
figures confirm the opinion that the nation generally has more
to spend today than it had a year ago. Moreoever, not only are
there many hundreds of thousands more workers in full employment,
but the existence of a vastly greater number of men in the
country's defence-forces calls for larger supplies of small cash.
Thousands more workers, too, are now in a position to take a
summer holiday, while the widespread adoption of the holiday-with-
pay principle has added to the spending capacity of the British
public.
Bankers' balances deposited with the Bank of England are
lower than at this time last year. The principal reason for this
is that the banks themselves maintain, in all large centres, a
much larger stock of ready-money than formerly, in anticipation of
demands by the public, so that the net decline in bankers' reserves
with the Bank of England is a logical consequence of that policy.
British banking business itself is as active as ever. This, after
an exceptionally large rise of over six per cent. in provincial
bank clearings in June, there was a further rise in July, the
percentage being 0.8 over the June figure. Total provincial
clearings for the first seven months of the year amounted to over
£747 millions, and the rising trend provides encouraging evidence
of the continued improvement in business conditions in Great Britain.