Money Mainly Credit

Another widely-held misconception regarding money is that it comprises mostly bank-notes and coin. Most readers will have heard of the silly sneers regarding "funny money" and "flooding the country with millions of bank-notes." You can be [unclear: sare] that anyone who uses these phrases has only a very hazy notion of how our present money system works, let alone having an understanding of any proposals for financial reform.

I was moaning bitterly to my wife recently that apparently intelligent friends of mine were unable to grasp the fact that credit-money (operated on with cheques) was used for over ninety per cent of financial transactions in New Zealand. Her explanation, which seemed quite feasible to me, was that the majority of people in New Zealand hardly ever saw a cheque. Most workers receive their wages or salaries in the form of notes and coin and pay their bills in the same medium. They therefore get the impression that notes are the main form of money, whereas a business-man like myself sees very little of notes and coin, practically all transactions both buying and selling being completed with cheques.