STATE NOTE ISSUE.

Dominion, Volume 2, Issue 503, 10 May 1909, Page 5

STATE NOTE ISSUE.

AUSTRALIAN SCHEME. EXPECTED YEARLY PROFIT, £100,000. SECURITY MEASURES. -\ ' (di.TKtiEoiu'i'ti—pubs association—corrmonT.) (Rec. May 10, 0.25 p;m.) Meibourno, May 9. .In his new proposals for a Fedoral note issue, the Prime Minister, Mr. Fisher, takes it as his basis that the Commonwealth, will cent, will bo retained by the Treasury as a balance against demand in cash. : The Test absorb about'four millions of which 25 per he proposes to invest. He estimates tliat a return of 3 or 3} per cent, on three millions Will produce a rovonuo of £100,000 a year. ~ Mr.. Fisher'is ponsidering:whether, as,an .additional reserve against the notes in case of a panic, there should not be Treasury Bills which might I bo issued up to 50 per cent, of the total for securing the cash uncase of '.necessity.' '~; .- '/"':/' ■.'.'..HOSTILE CRITICISM.. .' A.portion of the above scheme was enunciated by." Mr. Fisher .in his policy, speech at Gympie, on which- the "Sydney Morning Herald" commented :.'■■; l "His dream is,a;Commonwealth note issue— ■to take the place,' we, must assume, of the note issues of the private banks. The banks' note :issue aggregates somo: ,£3,500,000. - By appropriating this, Mr. Fisher calculates that he 'will bring into the Commonwealth-Treasury, say, £100,000 per annum net. If he does'so, ;if he gets that revenue, he,will only be,doing it by an oporation which is equivalent: to a forced 100n # of .£3,soo,ooo—and. we had thought i that anything savouring of a loan was hate-' ful to Mr. Fisher and his party. The-position is simply 'this: 'If Mr. Fisher proposes to issue •:notes to the value of ,£3,500,000 and hold gold 'against-, them','.-'as tho banks have to do now, ■he will make no because ho will have to pay the interest on the, gold held. If, on the; other, hand (as! seems to be the idea), :pouhd for pound is hot to bB held in gold, the notes will run' the risk of depreciation, which will;be a grievous wrong to those who happen to hold them for, value. j given, and' there may conceivably be a' widespread vitiation of-currency.''.. For ,the. Commonwealth to start tampering with the currency' is to embark upon a whole sea of troubles, the end of .which it would take a wiser head than Mr. FisherVto foresee." ..... -.;.- .'. 'Mr.'Fisher, according to: to-day's message, ap-. parently now,proposes.to overcome-the. necessity of carrying a gold reserve by the doubtful expedient of reserving the - right to issue Treasury Bills to meet any special demand for ioasbv'.'.. ■.--.■ ',:,'-... '■'-. '■ ..•'.• ..■■■■■■■y' '. ...' -. ■.-.•