SAMOAN CURRENCY

Evening Post, Volume LXXXVIII, Issue 93, 16 October 1914, Page 5

SAMOAN CURRENCY

GERMAN NOTES MADE LEGAL v TENDER A correspondent, "Thirty-five Years a Subscriber," -wishes to know what currency there is in Samoa and Tonga, and also how to remit money to Samoa. The position, so far as Samoa is concerned, is- that when the Germane feared capture they sent all their gold to Pago Pago, Tutuila, which is United States territory, and therefore neutral; but they left their paper in Samoa. This has now been declared legal tender by the British (New Zealand) Administrator. A rather knotty financial problem has thus been created which the Dominion /Government may find it difficult to solve. So long as the German notes are used in the island it will be all right, so far as they go, but they have, of couree, no gold backing. Every bank note issued, theoretically and practically, is supposed to have gold in the bank to meet it when presented for payment and gold is demanded, except, as in the recent case of the United Kingdom and in New Zealand and Australia, bank notes are made legal tender ; then payment in gold cannot be insisted upon^ As a matter of fact, the New Zealand bank returns showed that against the £2,012,569 notes issued to the end of September there was in the banks £5,823,575 in gold coin and bullion, or over two and a-half times the money and gold bars to meet the notes. With regard to the Samoan German notes, there is no gold to meet them, and yet they have been declared by the British authority in occupation to be legal tender, i.e., as good as money. Of course, if the notes are taken to a storekeeper and trader he must deliver goods to their value, but he could not bank them, because no German bank exists there, and there is no gold against the notes if the bank did exist there* The trader can pay the native in Grerman notes for copra or other produce, which he can turn into money when shipped away; but it would have seemed preferable for the Samoan Administration of the moment to have issued New Zealand notes or similar paper on calling in thei German notes and exchanging them for the ! British promise to pay, keeping theGerman paper until the day when it would be redeemable for gold. In this matter, on the surface of things, the Germans have got the better- of the British once more. With regard to Tongan currency, it is British, and remittances must be made to that country in British coinage, and will be paid in British currency. With regard to Samoa, the G.P.O. is making arrangements for money orders to be taken out in the ordinary way, as is now done with Tonga.