Bank Notes Tax Act 1910
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It is a federal law that imposes on all bank issued currency a tax of ten per cent. The tax applies on "all bank notes issued or re-issued by any bank in the Commonwealth after the commencement of this Act, and not redeemed."
The effect of the tax was to bring to an end the historical practice of private sector currency creation in Australia.
Prior to the act of 1910, the dominant form of currency in Australia was state issued currency and bearer redeemable promissory notes issued by private banks and denominated in pounds sterling.
The Act allowed the Federal government Treasurer to issue notes in denominations of 10s., £1, £5, £10, and any multiple of £10. These were to be legal tender and payable in gold coin on demand at the Commonwealth Treasury.
This act perpetuates the effective prohibition of private currencies in Australia.
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