2 MARCH 1991, Page 23

Tender trap

Sir: In the winter issue of its Bulletin, HM Treasury claims that, 'Legal tender is a specialised legal concept with little practic- al significance for the acceptability of a currency'. This may be intended to counter the argument, in my article (`Ecunomical with the truth', 1 December) that the hard ecu would not be accepted as a currency unless it were given legal-tender status.

May I suggest that the Treasury has an easy way to test the validity of its proposi- tion? This is to copy the recent example given by the KGB and to announce that all Bank of England notes with a face value above £10 are no longer legal tender.

Tim Congdon

Lombard Street Research, do Gerrard & National Holdings plc, 33 Lombard Street, London EC3