STATE NOTE ISSUE

Taranaki Daily News, Volume LIV, Issue 68, 11 September 1911, Page 3

STATE NOTE ISSUE

THE GOVERNMENT'S PROPOSALS. In the course of the Financial Statement, the Premier said:— I propose to ask the House to change the system of issuing bank notes. These will, in future, after reasonable notice is given, be issued by the Government as is done .in Canada and other places. It must be understood that this is not in any way a recognition of paper money in lieu of the present methods of exchange. The proposal is to make a State monopoly of an operation hitherto carried out by private institutions, and will be based upon the principles of the Canadian system, which has worked most, satisfactorily for many years past. The value of notes in circulation in New Zealand is about £1,60(1,000. The tax on this is 3 pe» cent. This will, of course, be lost by the Dominion, but the State will gain in other ways. The banks will pay gold to the Treasury for notes and the' State will not have to pay interest on money so received. The Treasury must keep a full reserve in gold coin to ensure the stability of the notes issued. I will submit fuller details when submitting legislation. In ease of loss or destruction of notes the Dominion will of course benefit. There are sound reasons for and against the change, but on the whole I am convinced that it is in the interests of the country that the issue of notes should be a function of the State. This can be done with much advantage to the people and without injury or dislocation to the business of the banking institutions of the Dominion.