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SCMP Reporter

THE one-cent note, introduced as an emergency measure during World War II because of a shortage of metal, was dispatched into the history books yesterday with the announcement that it will no longer be legal tender after September 30.

The Hong Kong Monetary Authority disclosed that the stock of one-cent notes was running low and it was loath to print new ones as each one-cent note costs two cents to print.

Although one of the world's least valuable currency units and rarely seen, they have an important legal role in the settling of debts.

The monetary authority stressed the Hong Kong dollar will still consist of 100 cents and cheques and bills can still be issued for odd amounts of cents.

The only effect of the decision is settling odd amounts in cash.

The monetary authority has received legal advice that a debt can be rounded down. For example a debt of $4.29 can be settled by $4.20 in cash after the one-cent note is scrapped. Payments by bank transfer or cheque will still be for $4.29.

Unlike all other notes, they are issued by the Government rather than banks.

Financial Secretary Sir Hamish Macleod said yesterday: 'Of course I am sad to see it go because it is the only note which has my signature on it. So, I've lost that claim to fame.' He added: 'I think it has just outlived its usefulness.' The Hong Kong Association of Banks is recommending a code to members which means all payments will be rounded down to the nearest 10 cents.

If the bank loses it will write the loss off, while if the bank wins the odd cents will be added together and donated to the Community Chest.

'One-cent notes have been a minor operational irritant,' a Hongkong Bank spokesman said.

'They are unwieldy to deal with. At the same time without using them we would have to round up in the favour of the customer.' There are $1.27 million worth of notes in circulation, and citizens who wish to cash them in can do so for the rest of the year at any branch of Hongkong Bank or at six treasury offices - although for obvious reasons they need to tender them in piles of ten.

The central office of Hongkong Bank and the treasury offices will continue changing them indefinitely.

The current issue have no individual serial numbers and are printed on only one side to reduce cost.

Every year about $30,000 worth are issued and are rarely returned, the monetary authority said.

However the first batch of notes, printed to a much higher quality, are now worth $50 according to Wong Chin-kwan, manager of Royal Coins Co.

For a one-cent investment this represents a 17 per cent a year return, outclassing both property and share prices.

Also collected are the 1945 issue, worth about $20, Mr Wong said.



Time runs out for one-cent note