LEGAL TENDER

Hokitika Guardian, 27 October 1928, Page 2

LEGAL TENDER

-—' .. . CURIOUS'A JjIES ' ) ATHOME. .< Lfj&bON, Sept. 1. • A man bank—-other ithan the Ba^;'.''.^^jjriglarid—arid'-ten-ders a £5 note'linfcpayment or partpayment of a l:W|f less . than that amount is liable'-toyliave it rejected as legal tender. By adding a penny to the £5 note becomes legal,; and lie can dei^ahdw acceptance. Ori the otlier hand, 'hoy.bank?h'as the right to refuse acceptance pf two £o notes'in payment of a -debti-'i These curious points in financial itydhsactions were revealed in a leylure at the Drapers’ Chamber of TradU Summer School at Cambridge. .?*• ••

. When a- reporter di;ew the attention 'of in official of a Big city bank to them it was only after a search among formidable-looking books that confirt niation of these apparent anomalies ) was discovered in the Dictionary of Banking.-. In. this dictionary it is laid down that.-.‘‘A-Bank of England note is ' as good as cash- and is legal tender for any ;> sum above £5. An official said:—While this regulation is, of course, well known, the effects of'/a literal interpretation of it are generally overlooked. It is a customary habit here, for instance, to refuse acceptance of Bank ' of England notes to ’all except those of our customers who are well known to us. But there appears no doubt tliatAwe coukl be compelled to accept payment to say, - two. £5 notes for the sum of £5 O.s Id, >and to give change, while it would almost seem as if a man wishing to set- : t- tie a debt .with a- Bank of England

note could do so - by- .adding a penny to the note. Fortunately, however, - these facts are not widely known, and I. cannot remember an occasion when we .have -been challenged.” Another legal ruling which might prove embarrassing if generally applied ■is that which entitles a man to demand j nothing hut gold from the Bank of JlSiigland in exchange for one of the ! notes. Strictly speaking/it is illegal j to pay anything but gold—but, happily * for the Bank of England, it is rarely tbatftlief kuhstitution of Treasury notes is objected to, ; : j Still another' interesting bank-note regulation is this: “If a person loses, say, a, £5 note and has a- record of the number,, he can, by paying half a j crown, have the note stopped. Should i it, however, he presented subsequently at the Bank of England, it must as a. ' matter of law he changed. Tn -a case where the note is believed to have been !

stojen, the presenter of the note would have to be paid in Treasury notes ’or

silver across the counter, hut could then immediately he handed into custody.

) “A little-known currency regulation is that which gives the right to refuse all silver payment of any amount over forty shillings, and the right to refuse ail-bronzo payment of any amount above one shilling.” A post office official pointed cut that this entitled anyone to insist upon the acceptance of forty-five farthings in payment of a debt for one shilling, .“On flic other band,” he added, “there is no law compelling anyone to give change, so that if. a, .person tenders; twopence to a shopkeeper in payment of an article which costs one penny three farthings, the latter, if he has run out of farthings, cannot he compelled to give : the customer a halfpenny instead, as has been demanded.

oil odd occasions by would-be clever people.”