British Mandate: A Survey of Palestine: Supplement - Page 108

of the London clearing banks. By November, 1946 the Palestine figures had risen to £P.43.9 million in circulation and £P. 96.2 million in bank deposits. The U.K. figures at the same date were £.1,3-17 million in circulation and £.3,632 million in current accounts of the London clearing banks. If the quantity of means of payment be expressed as an index number, the following is the relationship

Palestine U.K.

1989 100 100

1946 517 283

If the crude change in the volume of means of payment as shown by these figures is considered alone, the purchasing power of the Palestine pound would amount to 55 per cent. of that of sterling in November, 1046.

The extent of the disparity of the purchasing power between the two currencies (which is not reflected in the official exchange rate) may be estimated from the following summary table

Purchasing power
Palestine U.K. Index of I I Palestine
Palestine Index of pound as
sterling percentage
pound of sterling
Cost of living index:
August 1939 100 100 100 100 (a)
December 1946 275 132 36 76 48
. Wholesale price index:
August 1939 100 100 100 100 (a)
December 1946 361 18R 00 65 51
Wage rates:
Average 1939 100 100 100 100 (a)
September 1946 365 167 27 60 46
Currency and bank
deposits:
August 1939 100 100 100 100 (a)
November 19-tG 517 283 19 35 55

It will be seen that the purchasing power of the Palestine pound ranges between 46 per cent. and 55 per cent. of that of the pound sterling according to the method of calculation used. It is probable that the figure of 55 per cent. which is obtained by the comparison of changes in the volume of money in the two countries, under• states the extent of the fall in the purchasing power of the Palestine currency. For most purposes it would be reasonable to treat the

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