NEW SILVER COINS

Dominion, Volume 14, Issue 196, 14 May 1921, Page 8

NEW SILVER COINS

NOW BEING CIRCULATED REASONS FOR THE CHANGE Some of the how silver currency recently minted in the United Kingdom is about to bo put into circulation in this country. The Bank of New Zealand has just received as a first consignment of the new issue florins, shillings, sixpences, and threepenny bits to the aggregate value of 4:10,000, and these will soon be in common use. A few of the now coins, no doubt brought by immigrants and other persons arriving from Great Britain, are. already in circulation. They seem to have been regarded in some cases with suspicion, no doubt because they differ 1o some extent in colour and still more markedly in ‘‘ring’’ from the silver coins hitherto in use.' It seems likely that some recent reports of allegedly spurious silver, coins in circulation actually refer to coins of the new issue. Until last year British silver coins wero almost pure. They contained 925 parts in a thousand of fine silver. Tht new coins contain 500 parts silver, 400 1 copper, and 100 parts nickel. The reduction in the silver content is noteworthy, since it. is (he first that has been made since the davs of Queen Elizabeth.

The Boom in Silver. The change in the composition of British silver coins was prompted by the great increase in the price of silver during the war and post-war period. Immediately before the -war silver was selling at approximately two shillings an ounce. Although tho coins 1 hen issued were almost, pure, ' the amount of silver they contained was worth much less than their face value. An ounce of silver sufficed for coins to the Value of ss. Gd. In these conditions the minting of silver coins was of course highly profitable to the British Treasury. The margin was sufficient to cover a great increase in the price of silver, but on February 11 last year the price of the metal touched the I abnormal figure of 891 d., nearly four times the pre-war price, and more than four times tho record low price of 21 U.-16d., which was touched in 1902. The February price was the highest since statistics have been systematically recorded. With silver at. 891 d. an oz., it became profitable, though it was of course illegal, to melt down British silver coins and sell them as bar metal. In February, 1920, tho profit on this operation wa« over 33 per cent., and the profit remained considerable even when the price of silver hail fallen to some extent. With matters in this state, the British Treasury announced that a Bill would be promoted to reduce the fineness of

the silver in coins from .925 fine to .5(1 line. Great deliberation was shown, how ever, in giving effect to this decision, am it was not until December last that th new coifis were first put into circula tion in the United Kingdom. Long be fore that time the price of silver hat fallen far below the point at which th illegal melting down of silver coins wa profitable. At the end of the year tin price was about tod. per ounce, at whicl figure the melting down of silver coin: would involve a loss of about 40 pei cent. To what extent 'British ‘silvei coins were melted down during the perioc of extremely high prices does not seem Io have been stated with authority, bill the fall in the price of silver was hastened by the marketing in Britain of a large amount of bulk silver obtained by melting down foreign coinage. I Complaints in Britain. Silver was quoted by cablegram at the end of last week at 3Md., so that British coinage is safer than ever. Apparently, however; tho Treasury intends to persevere in the policy of issuing tho new coins, and gradually withdrawing the old silver coins from circulation. ■ It was rumoured in Loudon in March that owing to dissatisfaction with the new coinage because oi its liability to discoloration (with use it shows a yellowish tinge), instructions had been given to tho banks to cease calling in the old silver coins, and to the Mint to stop turning out more new silver coins. A note in the commercial columns‘of the London "Thues” stated that both reports were without foundation. "That there is room for improvement in the now subsidiary coinage,” it added, “is undeniable. The fact is that the substitution of a coinage composed of 925 per 1000 parts pure silver for a coinage made up of 500 parts silver, 400 parts copper, and 100 parts nickel has meant that the new coins when brought into contact with certain liquids become, discoloured with verdigris, as is the case with bronze coins. The trouble is, we understand, engaging the active attention of the -Mint, the research department of which is. striving to discover a remedy. Meantime, the public mav perhaps find some consolation | in the fact that the amended Act has , meant the coinage of money in a. double sense, foi already tho virtual halving of | the silver content, together with the fall in the price of the metal, has meant a profit to the State of over 82,000,000 on silver coinage, since the Act camo into operation” (a period of about three months). ' Some complaints have been made that the reduction of the amount of silver in coins debases the coinage, but this is an erroneous view. British silver coins are

"token money,” aud are legal tender only to an amount of .£2. Even before the war, they were worth intrinsically much less’than their face value, and the present. reduction carries no such consequences as would tho reduction of the amount of gold in' a sovereign.