State Note Issue.

New Zealand Graphic, Volume XLVI, Issue 16, 18 October 1911, Page 5

State Note Issue.

The New Zealand Notes Bill is the name of the measure just introduced, containing the proposal to issue state notes. Its operation is delayed until Ist January, 1913, by which date bank* are to cease making, issuing or reissuing any bank notes whatever under a £5 penalty for each note. The Minister of Finance (meaning the Government) is from that date to issue notes, no limit being set io the total value, but he is to hold as security for their redemption a gold coin reserve not less than (a) onefourth of the amount of notes issued and outstanding up to £3,000,000, and (b) equal to amount of notes for the time being issued and outstanding in excess of £3,000,000. This reserve is to be held exclusively for the redemption of the notes. A deficiency may be made up out of the consolidated funds; and, per contra, an excess over the necessary reserve may be paid into the consolidated fund. The other details of administration of the reserve are to be left to regulations by the Governorin-Council. The notes are to be legal tender except by the Government, and shall lie payable to the hearer on demand in gold coin at the Treasury. A monthly statement is to be issued by the secretary of the Treasury, and gazetted, showing the number and amount of notes issued and outstanding, and the amount of the gold reserve. At the request of Mr. Eli Sir -Joseph Ward outlined the above proposals, and explained that the Bank would, of course, be responsible for the payment on all notes issued until their return to the bank, no time limit being fixed in that respect. The operation of the bill was delayed until 1913 in order to give time to provide the necessary gold for the purchase of the notes. The gold reserve was the same as that required at present in respect of the banks. The notes were hot to be legal tender by the Government —i. 0., the Government could not issue them for their own purposes, and they could not be issued in payment of any claim against the Government. It was not proposed to make any change, in the amounts for which bank notes were now issued (£l, £5, etc.), these having been found very convenient. Mr. Massey suggested that the bill be sent to the Public Acounts Committee. Sir Joseph Ward declined, saying that he and other members would not have time to attend that Committee every morning for a week at the end of the session. He announced that he intended to take the second leading this session, and if anv weakness in the bill were

thereby disclosed, there would be am pie time to put it right next session. But, whether the bill passed this session or next session, the time for its coming into operation would be Ist January, 1913.