THE COINAGE.

Press, Volume LXIX, Issue 20897, 3 July 1933, Page 10

THE COINAGE.

NO CHANGE PROPOSED. COMMITTEE'S REPORT. ROYAL MINT'S 01-TEK. | THE PRESS Special Serrica. | WELLINGTON, July t. A unanimous recommendation that there should be no change in the existing coin denominations used in New Zealand is made by the special committee recently appointed by the Government, whose report was released for publication by the ActingPrime Minister (the Rt. Hon. J. G. Coates) to-day. The committee's order of reference was as follows: (a) Whether the opportunity should be taken to alter the denomination of the coins with a view to placing our token coinage and money of account on a decimal basis, and, if so, what coins should be struck. (b) Whether it would be economical to have any or all of the coins manufactured in New Zealand. (c) The design of the new coins. "The committee," states the report, "has made a careful general survey of the possible advantages and disadvantages that would flow from the introduction of a decimal system of coinage in substitution for the British Imperial or fractional system of coinage now in use in the Dominion, and has considered several decimal schemes, in | particular the crown-cent scheme, and the pound-mil scheme. Other decimal coinage schemes were also reviewed, but these were mainly variants of the two schemes above mentioned. "Although the committee was of opinion that there were distinct advantages and disadvantages in both the present and proposed systems, it did not make an exhaustive examination of these advantages or disadvantages, but rather directed its attention to an enquiry into the possible cost to the community by a change-over to the decimal system, and the general *ffect under existing economic conditions. After a careful examination of these aspects of the matter, the committee came to the following conclusions:— "Apart from any other consideration, having regard to the cost to the community of a change-over under existing conditions, the committee does not cecommend the adoption of a system of decimal coinage In present circumstances. Decimal System Advantages. "It has been suggested that the question might be revived in the event of there being a special recoinage in the future, perhaps in 1940, when commemorative coins may be issued to mark the centenary of New Zealand. The committee accordingly considers it fitting to place on record some of the principal advantages and disadvantages of the decimal system of coinage which presented themselves in a general examination of the proposed decimal coinage schemes. They are as follows: "1. Simplicity in calculation. As "arithmetic is based on the decimal" notation it would be most convenient Jn accounting for the monetary system to be on a similar basis. "2. Increased facility in accounting, thereby saving time and increasing business efficiency. Reduced liability to error in keeping accounts. "3. Greater ease in computing accounts as percentages. Increases and decreases in wages, interest, etc., usually expressed in percentages, which have a more convenient relationship with a decimal system of coinage than a fractional system. "4. Greater ease in converting deciimal currency Into foreign currency tarticularly in view of the fact that II the leading foreign countries in the world have already adopted the decimal system of coinage. "5. Facility in exchange conversion calculations. The foreign trader has a tendency to overlook prices and quotations in a currency which he finds difficult to convert to his own. "6. Improved price gradient. The adoption of the £ and mil system, for instance, would provide a smaller unit of value, and therefore a more sensitive range of denominations. "7. More scientific method of price adjustments. Variations in price brought about by percentage increases or decreases such as sales tax or customs duties could be more accurately passed on to the consumer than at present. "8. Saving of time during education and throughout life by the elimination Of the need for calculating in compound arithmetic in all calculations involving money. "9. A& the decimal system of coinage is almost universally adopted in foreign countries, its adoption m New Zealand might tend to promote foreign trade expansion. The decimal system is widely used within the Empire, and the recent South African decision would appear to indicate an increasing trend within the Empire towards that system. The Disadvantages. "1. Difficulty in deciding the most suitable basis of decimal coinage to be adopted to suit local conditions. All present disabilities, i.e„ (a) a decimal system based on the retention of the penny at its present value would cause the identity of the £ to be lost, thus disturbing the Dominion's link with sterling; (b) the adoption of the £ and mil system or the crown system would not be readily acceptable owing to the impossibility of retaining the T penny at its present value, which represents the price basis ol innumerable commodities sold and services rendered internally ._ , "2 Transitional difficulties arising through old and new coins not being exactly interchangeable. „,,„_„„ "3 Cost to community of changeover New or converted accounting machines, stationery, tables of charges, rates, insurance premiums, commercial, costing, and price lists, etc., together with extra clerical work necessary in the initial stages, would involve substantial additional expenditure. "4 Cost of new accounting machines and similar appliances would not be distributed in the Dominion as supplies come from overseas and not necessarily from within the Empire. "5 On account of prevailing economic conditions, present time most inopportune for these additional costs to be imposed upon community. "6. Introduction of decimal coinage would be a further disturbing factor at a time when commodity values are in a state of fluctuation. "7. Although the decimal system presents distinct discounting advantages, the fractional system is more convenient for retailers owing to greater divisibility. "8. Reduced liability to error in accounting with a decimal system may te overstressed. Although the existing system is more involved, the use *t calculating machines minimises the possibility of error with the present system. "9. As by far the greater volume of the Dominion's external trade at the present time is with Great Britain, SbJere the fractional system of coinage l used, any departure from our present system of coinage and money of account would tend to complicate Kxkthtx than simplify transactions in ■this connexion. ■ "10. Any advantages that would ■«bsw<——sum «»iim nwi iliiAnsl m -\

[ (cm are minimised to some extent while the present binary system of weights and measures obtains." ■ Place of Manufacture. ! The committee, after mentioning the representations of the New Zealand " Manufacturers' Association regarding the importance of having the new coin manufactured in the Dominion, says:— i "The question of early delivery is j regarded as extremely important in ! view of the serious depletion of existing coinage supplies. Enquiries were [also made from the Royal Mint, from which the supply of coinage up to the present time has always been obtained. "After the fullest examination of all aspects, the committee came to the definite conclusion that the question tinder review was effectually answered jby a comparison of the local manufacturers' estimates of cost with the offer of the Royal Mint. The best estimate obtainable in New Zealand for the recoinage of existing supplies of silver involved minting charges np- ■ proximating £210,000, whereas the ! Royal Mint is prepared to carry out i the contract free of charge, except cost i of dies and artists' fees (estimated at £G00) and freight, approximating ■ £30,000, a net difference in cost of ■ approximately £IBO,OOO. "In respect of the Imperial coin at present in circulation, the Royal Mint has always admitted a liability to replace it when it became worn, and this : may have been a factor in the offer received from the mint to underlain the recoinage free of charge, and may account in part for the disparity in the costs quoted above. A Lower Estimate. "The price quoted for manufacturing charges for future supplies from the Royal Mint were substantially lower 1 than any such estimate obtained in the Dominion. "It was also ascertained that as a large part of the necessary minting machinery would have to be imported and erected before production could be commenced in New Zealand, it would be at least six months before the coins could be produced locally. On the other hand, the Royal Mint is prepared to commence delivery immediately upon receipt of the approved designs for the new coins. "Furthermore, a definite statement from the Royal Mint to the effect that no other mint had been successful in producing a satisfactory quaternary alloy, of which the present British coins are composed, and of which it is desirable that the- New Zealand coin should be made, led the committee to the conclusion that there was at least a doubt as to whether the manufacture could be successfully carried out in New Zealand. There are at present in the Dominion four different classes of silver coin in circulation. Two of these, the British coinage issued prior to 1922, and Australian silver, are minted from an alloy containing 925 parts of silver and 75 parts of other metal. The 1922 issue of Imperial coin consisted of 500 equal parts silver and copper, while from 1923 what Is known as the quaternary alloy has been used, consisting of 500 parts silver and 500 parts of other rnetals. From the point of view of cost it is not desirable to adopt any alloy for the new coinage with a higher percentage of silver than 50 per cent. After its experience of the various alloys, the Royal Mint has decided that the quaternary is the most suitable for -silver coinage, and it is consequently assumed by the committee that a similar standard of fineness will be adopted for the Dominion's new coin. "The ultimate considerations as regards manufacture were those of cost to the community and urgency of delivery, and as a. consequence the following decision was arrived at:— "That the committee recommends the acceptance of the offer made by the Royal Mint in connexion with the recoinage of the present issue of silver coin. "As regards,the manufacture of additional supplies of coin required subsequent to the recoinage of the existing coin, the committee is of the opinion that, although it is problematical whether, in the light of the foregoing information, a local offer could be made to compete with that of the Royal Mint, nevertheless the committee recommends that the question or allowing local firms to tender for the •work be considered if and when additional coins are required in the future. Surplus Coin. "The major portion of the present coinage is that minted from the ternary alloy consisting of 925 parts of silver to 75 parts of other metal, so that the whole of the existing issue will not be required to produce sufficient silver for the recoinage into quaternary alloy. As it <s understood that redemption at face value is out of the question, the only means of disposal of this surplus old coin is to melt it down and sell the bullion. It has been estimated by the Royal Mint, on the basis of the present price of silver, that the sale of this bullion will not only cover all recoinage costs, but also will return to the New Zealand Government a net profit of £162,000 on the undertaking. Owing to the relatively higher manufacturing costs which would be incurred should the recoinage be carried out in New Zealand this result would not be possible in the case of the contract being given in the Dominion. "The committee has considered also the question of the bronze coinage now in circulation in the Dominion. In the committee's opinion the recoinage of this is not one of urgency, and could be delayed until such time as the Government deems it necessary that such recoinage should be proceeded with. When this work is undertaken the committee recommends that artists in New Zealand be given an opportunity to prepare the proposed designs. Question of Design. "Concerning the third point in the Order of Reference, we are given to understand that the offer of the Royal Mint to have prepared suitable draft designs, with the Royal effigy on one side and New Zealand arms and typical Maori designs on reverses, and these designs revised by an expert committee of artists in London, was accepted by the Government. Copies of these draft designs have not yet come to hand. "As the question of recoinage is a matter of extreme urgency, the committee has deemed it advisable to submit a report on the first two questions in the Order of Reference without delay. "Arrangements have been made for a cabled description of the proposed coin designs to be forwarded to New Zealand as soon as possible. In view of the urgency of the matter, it is evident that the approval of the designs will have to be left largely in the hands of the Government's representatives in London, acting in conjunction with such New Zealand artists or other expert advisers as may be available there, but before approval is finally given it is suggested that the cabled description of the designs when received be submitted for the opinion of leading representatives of the New Zealand Numismatic Society and the New Zealand Association of Artists' Societies." The members of the committee were Messrs A. D. Park (chairman), representing the Treasury; A. S. Burgess, representing the Chambers of Commerce; J. R. Frethey, representing the Associated Banks; A. Marshall, representing the Post and Telegraph Department; V. Simm, representing retailers; R. M. Sunley, representing Controller and Auditor-General; A. Sutherland, representing the Numismatic Society; and H. L. Wise, representing the Department of Industries and Commerce.