NEW NOTE ISSUE.

Auckland Star, Volume LXV, Issue 149, 26 June 1934, Page 9

NEW NOTE ISSUE.

RESERVE BANK.

PARTICULARS OF DESIGN.

EEPLACEMENT PROCESS.

(By Telegraph.—Own Correspondent.)

WELLINGTON, this day.

New Zealsnders have become accustomed to changes in tho appearance of their currency, for the familiar English coins have nearly all been replaced by the special ones minted for New Zealand use. And after August 1 the familiar notee of the commercial banke will quickly commence to disappear, for they are to be replaced by those of the New Zealand Reserve Bank. This institution will have its headquartere in the Dominion Farmers' Institute, Wellington, and will be a "bankers' bank," not doing business direct with, the general public.

Though it is impossible to gain information from Reserve Bank quarters regarding the new issue of notes, for there is great reticence regarding every step in the organisation of this important public institution, it can be explained that the new notes are not going to mark any wide departure from the designs of those which they will replace. Colour schemes are formidable handicaps to lawbreakers who have fraudulent intentions, because it is practically impossible accurately to reproduce by photographic methods a properly planned series of colours in banknotes. Therefore the Reserve Bank notes will be printed in colours, and they are quite interesting in their design. On the back is a pictorial feature, resembling Mitre Peak, in the Sounds district. The front includes several ornamental features, Maori scrolls being worked into the general plan, as well as reproductions of the kiwi and the splendidly tatooed features of Tawhiao, the Maori "king" who was responsible for formally declaring peace with the pakeha in 1881, when he and his people appeared in the Waikato before Major Mair, the Resident Officer, laid their guns at his feet, and declared, "It means peace." They kept their word. The Circulation of Money. Banking and other authorities who were consulted as to the time likely to be taken in completing the withdrawal of notes of the trading- banks all agreed that fully three-quarters of the old notes would be out of circulation within a few weeks of the first issue of Reserve Bank notes on August 1 next. The legal position is that on and after that date the authority of the trading bank 3 to issue or reissue their own notee ceases. Tho statute declares that they shall' redeem their outstanding notes only in Reserve Bank notes or ,in subsidiary coin to the extent to which such coin is, for the time being, legal tender in New Zealand.

Therefore, when the notes now current are paid into the banks on and after August 1 they will not again be issued. Payment by the banks to their customers will be made in the notes of the Reserve Bank. The opinion of experts on the question of the rate of circulation of currency is that in New Zealand the whole supply is "turned over" 40 times per annum. The current note circulation amounts to approximately six millions, though at such busy shopping seasons as Christmas time it might expand to about seven millions. However, the notes issued just before Christmas get back into the banks within a few weeks, for the usual course of circulation is rapid, fully supporting the current complaint that it is hard to keep one's money. An employer drawing a cheque -on his account for wages receives bank notea and coin, which ho distributes to his employees. They, in turn, pay their tradesmen, who at once place the notes and coin to their credit in their bank— the circle is complete. The only exceptions are the cases of hoarding, and the slower rate of distribution and deposit in remoter parts of the Dominion.

The coming issue of Reserve Bank notes is officially regarded as a tempo- " rary one. To facilitate the organisation of an entirely new institution, th? Government's officials, in conjunction with the Minister,of Finance, had to arrange for printing the first supply of notes in England. If the Reserve Bank directorate desires, they can be replaced hy notes of their own approved design.