CHEQUES TO ORDER

Taihape Daily Times, 6 December 1918, Page 3

CHEQUES TO ORDER

Clauses 19 of the Finance Bill, now before Parliament makes a new provision with regard to cheques which is of considerable interest and impor tanee to banks and the commercial ! community generally. The clause runs as follows: "The endorsement of a cheque other than a cheque payable to bearer shall be deemed to be a receipt within the meaning of the Stamp Duties Act 190 S given by the endorser in respect of the amount of the cheque and shall be subject accordingly to the provisions of that Act and to the duty imposed thereby and by the Finance Act. 1915. unless, before such endorsement is made a duly stamped receipt for the amount of the cheque has been executed by the endorser." Now, if this clause is passed as drawn, the banks will have to refuse payment of all cheques for £2 and upwards pay- | able to order unless, in connection with the endorsement, a 2d stamp is affixed, or evidence produced to the bank to prove that a duly stomped receipt has been executed. This would lead to endless trouble friction and annoyance. Seeing that every cheque is subject to stamp duty, apart from that proposed on endorsements, it hardly seems worth while introducing such a pin-pricking and trivial change. The proposal calls for the attention of the chamber of Commerce. Legislation this session is being rushed through, Parliament so hurriedly that speedy action should be taken, otherwise the

enactment of the clause may cause considerable confusion and disturbance in the existing methods of conducting commercial business. No doubt there is a loss of revenue through the acceptance of cheques to order as receipts, but these cheques are used for the purpose of ensuring safety in the transmission of money by post, and the two-penny stamp payable on every cheque seems an adequate payment to the State for the advantages secured by this form of monetary transaction. If, however, the Government is detei--mincd to prevent the acceptance of cheques to order as receipts, it behoves the Stamp Department to de- t vise some method by which banks will be enabled to accept such chques without the serious trouble to themselves and the persons who issue cheques to order that would inevitably result from the adoption of the clause as it J now stands in the Finance Bill. j