UNPRESENTED NOTES

Manawatu Standard, Volume LV, Issue 42, 17 January 1935, Page 6

UNPRESENTED NOTES

BURDEN ON TRADING BANKS. t NOTE TAN CONTINUES. (By Telegraph—Special to Standard.) WELLINGTON, Jan. 17. When the notes of the trading banks ceased to bs legal tender, many people became concerned for fear that they had lost the value of these paper tokens, “promises to pay,” but tins doubt has been, officially removed, because any trading bank will honour its notes at full face value, and replace them with Reserve Bank notes, to-day’s legal tender. The public discussion of the matter last week had the good result of producing from their hiding-places some thousands of trading bank notes, and it is quite surprising how large is the amount of the original note issue still in private hands. After Reserve Bank notes had been available to the public, and had been constantly issued by the trading banks for four months, the returns showed that there was still a total of £1,846,000 outstanding, it has been reduced through the temporary public alarm over their value, but the banks aro waiting for more of their “paper,” and they are carrying quite a heavy liability to the State in respect to the total outstanding. They contribute in taxation 4i per cent, of the face value of notes issued to tne public, and it was in 1930 when the tax was raised from 3 per cent, that the charge for keeping customers accounts was doubled. According to the Monetary Committee, the banks have intimated that when the note tax is reduced thev will lie pleased to revert to the old charge of 10s per annum for keeping accounts, but meanwhile they continue paying taxation on a considerable sum of unpresented notes. Complete relief from this burden will not come for nearly two years, when, under the provisions of the Reserve Bank Act, the trading banks will pay to that institution the amount of their outstanding notes, and the Reserve Ba.nk will take the liability. After a further period, probably a lengthy one the Reserve Ba.nk will secure authority to write off the whole liability, and any unclaimed money will then be placed to the credit of the Crown.