This branch of the Bank of New Zealand, probably at Arthur’s Point near Queenstown, in 1864, advertises that it accepts deposits of gold. At that time banks promised the bearer of bank notes that they would pay the equivalent in gold; and therefore the total volume of New Zealand’s money was limited by the amount of gold the government held. This ‘gold standard’ usually led to deflation, because the volume of goods and services increased faster than the amount of gold discovered.
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