DILAPIDATED BANKNOTES.

New Zealand Herald, Volume LXVI, Issue 20171, 4 February 1929, Page 8

DILAPIDATED BANKNOTES.

PROCESS OF DESTRUCTION.

MANY THOUSANDS EVERY WEEK

Tlio question, "When docs a banknote cease to be legal tender?"' often crops up when dilapidated currency passes over Auckland counters. Although the banks are continually expurgating the issue many tattered notes are passing daily from pocket to pocket. They are all worth their face value, in spite of plastering of adhesive paper, provided the numbers are legible.

An average of 1Q : 000 banknotes are cancelled every week by the Auckland branch of the Bank of New Zealand alone. The tellers sort out torn notes at the end of each day and a bold cancellation stamp is placed across. Under supervision, which is proof against trickery, tho condemned bundles aro then sliced several times with a guillotine. The fragments are conveyed carefully in a metal box to an incinerator And it is then a case of "money to burn." P>anks are not required to hold a sovereign for every £1 note issued. Notes are issued in a certain proportion against gold, the securities and the assets of the bank. The bank actually profits by lost or destroyed notes, since there can be no claim for redemption. It is, however, a very elusive sort of profit and the bank is unaware that its liability has vanished, the note tax bein£ paid indefinitely on a sum which may have long gone to the four winds in ashes.