NO LONGER LEGAL TENDER

Dominion, Volume 28, Issue 89, 9 January 1935, Page 11

NO LONGER LEGAL TENDER

* Trading Banks’ Notes POSITION DEFINED A leading banker, in reply to an inquiry as to whether, consequent upon legislation passed last session, the trading banks’ notes would cease to be legal tender on January 10, stated that this was so, and that naturally the outstanding notes would be presented by the public to the various banks for payment as qulekly as possible.

This means that, after to-morrow only 1 the notes of the Reserve Bank will be legal tender, and that any person has the right after to-morrow to refuse to accept any note of any of the trading banks in payment, for any goods or services. Such a note, however, will be honoured by the bank which issued it.

Under-the provisions of the Reserve Bank of New Zealand Act, 1933, the sole right of note issue in New Zealand has been vested in the Reserve Bank. It Is further provided that, on the expiration of a period of two years after the date when the right of issuing bank notes has become vested in the Reserve Bank, every other bank then carrying on business in New Zealand shall pay over to the Reserve Bank an amount equal to the value of its then outstanding notes issued or payable in New Zealand, and its liability in respect of such notes to their holders shall be deemed to have been assumed by the Reserve Bank. Another provision is that any bank note, whether issued by the Reserve Bank or any other bunk, that is not. presented for payment within 40 years from April 1, following the date of its issue, or within 40 years after the assumption by the Reserve Bank of liability in respect thereof, shall, on the expiration of that period, be deemed not to be in circulation, and an amount equal to its value shall be paid by the Reserve Bank into the public account to the credit of the Consolidated Fund as if the amount were unclaimed moneys within the meaning of the Unclaimed Moneys Act, 1908. A few months ago a bank note issued by the Union Bank of Australia, a few weeks after its establishment in New Zealand in 1840, came to the bank from America and was duly honoured after a lapse of 94 years. The note was issued at Britannia, which was the name'of the infant settlement on the foreshore at Petone, Bank notes in circulation in New Zealand on October 29 totalled £6,040.968/10/-, of which the trading banks’ notes outstanding amounted to £2,206,305.