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Salient. The Newspaper of Victoria University College. Vol. 19, No. 6. May 31, 1955

Banks Under Social Credit

Banks Under Social Credit

We have now arrived at the point where two main features of our present money system have been presented. The first is that practically all money comes into existence as the result of the banking system creating it, and the second is that this credit-money is operated on by the use of cheques. It follows therefore that "when a bank makes a loan it increases the amount of money in circulation and the repayment of a bank loan reduces the amount of money in circulation." The words in black type are taken from the Reserve Bank bulletin titled "Money Supply in New Zealand." There is therefore in existence an exceptionally efficient mechanism for the issue and cancellation of money. Under a Social Credit regime the trading banks as they are called, would operate exactly as they do now.