TEN-SHILLING NOTES.

Press, Volume LXVI, Issue 20024, 4 September 1930, Page 6

TEN-SHILLING NOTES.

BANKS UNAWARE OF RESTRICTION. EFFECT ON RETAIL TRADERS. The banks in Christchnrcft have so far no knowledge of any restriction in the issue of 10s notes, although a message from Well.niton, published in The Press yesterday, stated that it was understood that the banks there were paying out silver instead of notes of this denomination. Enquiries made from the accountants of leading businesa houses yesterday showed that they had had no occasion to comment on any shortage of the notes. The bank managers stated that they had no official advice on the matter, and that the information given in the newspapers was their first intimation of any possible change. One of them added that he would no bo surprised if this course of restricting the issue was adopted. Any action of the banks would naturally be dependent upon the decision of the Associated Banks.

They could give no idea of the number or definite proportion of 10s notes in circulation, thougl a rough estimate given by one of the tellers was that there were about twice as many as there were £1 notes. All the banks now issue these notes, which were introduced during tho war period to relieve the gold shortage, and to replace the ten-shilling gold piece. It was pointed out by one of the managers that at the time of the introduction of the ten-shilling note the public generally disliked them, although they had now become an accepted part of our currency. Should there be anything in the report from Wellington, and if they were withdrawn, or their issue limited, the public would probably feel the change at first, and then quickly settle down to the new conditions. He would assume that in such a case there would be a genoral instruction to try to save the issue of the notes as far as possible, y and limit them to the larger firms. Another manager said that they would have to try to educate the public if such a course were adopted. Any system of letting some of the bank's customers have the notes while others had. to go without would result in a certain amount of unfairness. It would seem better to withdraw the notes from circulation altogether. The bankers generally expressed the opinion that the use of the ten-shilling notes had been to the convenience of the banks, and naturally to the tellers in particular. They had also been very convenient for the public for similar reasons.

In the retail business houses visited the accountants stated that any restriction in the number of notes available would be very inconvenient, but they had not poticed any change in the position recently. One of them stated that it had always been slightly difficult to obtain a sufficient number, so that at the end of the day the tellers had to borrow from one another. With retail businesses the one pound note was one of the most usual forms of payment for amounts between 10s and £l, also for smaller amounts. Custodiers were often offended if, when receiving change for a pound after making a small purchase, they received as much as 15s worth of silver. Consequently the offices endeavoured to maintain an adequate number of the notes. Another accountant stated that he had always been able to obtain " whatever notes he wanted, but if the issue were restricted the result would be very inconvenient both to the firm and to its customers.

The manager of one of the. banks which also operates in Australia stated that the proportion of 10s notes in use there would be roughly the as here. The position, however, was slightly different there, for all banknotes were issued from one bank—the Commonwealth Bank—so that there was no comparison between the notes of_ various banks. All the notes were issued by the Treasury through the Commonwealth Bank, and this simplified matters, for a larger number of banks operated in Australia than in New Zealand, and some restricted their activities to only one, or one or two of the States. There had been some outcry when the system first came into force, and the Associated Banks had to lodge some millions of pounds in gold with the Treasury, and take Australian notes instead, but now it was accepted, and was convenient.