BANK NOTES

New Zealand Times, Volume L, Issue 11415, 11 January 1923, Page 4

BANK NOTES

LEGAL TENDER TILL 1925. NEED FOR RECENT PROCLAMA. TTON. EXPLAINED BY FINANCE MINISTER. Referring to the proclamation, gazetted on December 21st, 1922, declaring the notes of certain banks to be_ legal tender until January 10th, 1925, the Minister for Finance, the Rt. Hon. W. F. Massey, states that this is merely following out the provisions of section 66 otf the Finance Act, 1917, wherein it is enacted that notes shall be legal tender to a day fixed by the Governor-in-Countil, such date not to be earlier than five years after the termination of the war. The official date of the termination of the war was fixed by proclamation, gazetfed February 23rd, 1920, as January 10th, 1920. The last proclamation declaring notes to he legal tender was gazetted on December 4th, 1917, and covered a period of five years which expired on December 31st, 1922. The proclamation extending the period to January 10th, 1925, was therefore necessary to carry out the direction of Parliament as enacted in 1917.

This legislation was the outcome of an arrangement made with the associated hanks in New Zealand in that year, when the £12,000,000 war loan was placed on the market, whereby in consideration of the hanks (1) underwriting at least £5,000,000 of the loan, and (2) making advances to their clients to enable them to invest in the loan, the Government agreed to introduce legislation to (1) further increase the limit issue of bank notes to the extent of advances to clients for investment in the war loan, and (2) enable hank notes, on the basis of the extended issue, to he made legal tender for a period of five years after the conclusion of the war.