STATE NOTE ISSUE.

Taranaki Daily News, Volume LIV, Issue 95, 12 October 1911, Page 5

STATE NOTE ISSUE.

LIMITED TO £3,000,000. SCHEME POSTPONED TILL NEXT SESSION. The issue of bank notes by the Govern ment New Zealand is proposed in a Bill introduced in the House of Representatives on Tuesday afternoon. The Bill will be advanced to the second reading stage this session, and further consideration will then be postponed until next session, in order that all interested persons may have ample opportunity of considering the scheme. The essential features of the measure were explained by the Minister for Finance (Sir Joseph Ward). He said that it was intended that the sole issue of bank notes in New Zealand by the Government should commence on January 1, 1913. There will be 110 time limit for the return of notes> now in circulation, and banks will be responsible for payment of the face value of these at. any time. By delaying the operation of the Act till 1913 the Government was providing sufficient time for arrangements to .be made for the change without friction or inconvenience to trade and commerce. Notes are to be issued ay the Minister for Finance at any time, and in any amount, and they are to be legal tender except in payment of any claim or demand against the Crown, the, latter provision being intended to prevent the possibility of anything in the shape of a paper currency. They will be payable on demand in gold at the Treasury in Wellington. The notes will be of the denominational values that the Minister for Finance directs, and as present values have been found convenient, no change in denomination | is contemplated. The proceeds from the sale of notes to the banks are to form part of the Consolidated Fund, all expenses incurred in connection with the administration of the Note Department, are to be appropriated :by Parliament in 1 the ordinary way, and the Minister for Finance is to hold at all times a reserve in gold 1 amounting to not less than onefourth of the amount of New Zealand notes issued and outstanding up to £3,000,000, and of an amount equal to the value of the note 9 outstanding in excess of £3,000,000. The intention is to limit the issue to £3,000,000, but if occasion demands an issue beyond that amount, the excess shall be secured by a gold reserve of £1 for £l. Mr. Wilford (H'utt): What is the value of the notes now in circulation? Sir Joseph Ward: About £1,600,000. The reserve, he continued, would be held solely for the .redemption of New Zealand notes, and would not be used for any other purpose. The custody and administration of the reserve would be provided for by regulations, and the reserve will be maintained at the required amount toy payments from or into the Consolidated Funds. A monthly return will. be prepared by the Secretary of the Treasury, counter-signed by the Minister for Finance, and published in the Gazette, showing the number and the amount of New Zealand notes outstanding amd the amount of gold held in reserve. There are provisions that any bank issuing or circulating other than State notes after the Act coines into operation will be liable to a fine of £5 for each note, and that all the provisions of the Crimes Act relating to bank notes are to apply to State notes. The Leader of the Opposition (Mr. W. F. Massey) suggested that the Bill should be referred to the Public Accounts Committee.

Sir Joseph Ward replied that his intention was that the Bill should pass its second reading this session, and if necessary it could be referred to the committee next session.

In reply to questions, Sir Joseph Ward said that the reserve would bo kept in gold ingots, and would be not utilised in am- way. The .remaining 75 per cent, of the proceeds will be used probably for advances to farmers and workers. The Bill was read a first time.