NEW COINS

Evening Post, Volume C, Issue 144, 15 December 1920, Page 9

NEW COINS

"NICKEL" SILVER

CIRCULATION IN NEW ZEALAND

ANOTHER "WAR INCREASE."

A brief cablegram last week an.nounced that the new '"nickel"•■: coinage would be put into circulation in Great Britain.on Monday next, and the old silver coinage would at the same (time be withdrawn from circulation. This littls' message has an interest for jTew Zealand, for the Dominion maintains the same currency aa the United Kingdom, and will in duo time, just so soon presumably as the new coins can be brought to the Dominion, make the same change in the coinage. Tho reason for the change lies in the fact that for sonic time past the public has, to put it paradoxically, been leceiving more than a shilling's worth 01 silver in a shilling. „!£ a nan had a little silver enine on li-:b property and could refine the silver produced, and if he were then permitted to convert it iato coins lie 1 would find it comparatively unprofitable to do co. It is a perfous offenca to coin money (not <ising the term in its colloquial a'case), but lateiy there has been no temptation to break the law. The man who had silver to sell could with greater profit sell it to the banks or o^her dealers in precious metals. ' ' THE MINTING PROFITS. It was not aiv/ays tins. For very many years tho Royal Mint made 'sufficient profit on its silver and bronze coinage to pay the whole expenses of the Mint, .including the loss involved in gold coinage and in the redemption of defaced and worn coins. One ounce of coinage silver, containing 925 parts of silver and 75 parts of copper, was converted into 5s 6d worth of coinß. As the silver for many years cost less than 2s 6d an ounce, it will be seen that a profit was made. Bronze coinage also yielded & handsome profit—necessarily so. One ton of standard coinage bronze containing 95 parts of copper, four parts of tin, and one part of zinc would be worth on current quotations anything from £80 to £100. . The Royal Mint can make from one ton pennies to the value of £448, or halfpennies and farthings to the value of £373 6s 85. If the system followed with jjold of maintaining full value of metal in coinage were to be followed with the .pence the penny would require to be roughly five times its present size. One immediate result n-ould be that tramconductors woald want an increase of wages—or a small boy to "carry their enlarged "small change." Bronze coin-. age still yields a profit.to His Majesty; 1 but the Master of the Royal Mint can say wit'i truth thai there is not the money in silver that there used to be. To remedy this less silver is to be put into the money. People are accustomed )io hear of benevolent men engaged in 'business from philanthropic motives and carrying on'at a loss; but this, is quite true pf the business of His Majesty of turning out the little silver discs bearing the ; image and superscription of King George V.'!. , ■ / „ •<■ ■ ; THE PRICE OF SILVER; - Withoufe going too deeply into market movements and the reasons therefor, it may be stated that the price of silver want bounding up during the war period! For years it Had been below 30d per oz, varying a penny now and again. In January, 1916, tho price was 26Jd. Then a gradual rise commenced. Towards the end of the year the price was 32d. This upward movement continued to the end of and after the war. At the end of last year 76d was being asked. -Market re-1 ports show that this was a case of supply I and demand. China and India have a solid effect on the silver market. The demand for the white metal is partly due to coinage requirements and partly to the favour .in which siver ornaments are held. Not ail races have the fondness we display for gold. The Maoris when they first came in contact with the whites held gold in low esteem; and instances are recorded of sovereigns being exchanged for half-crowns'or shillings—and the Maori was quite satisfied with his bargain. Anyway, the silver market reports constantly contained the words "great demand irom China." Also the German silver refiners were not selling— for obvious reasons. Thi3 year the market has steadied, and recent quotations are from 50d io 60d. It may yet return to approximately the pre-war level; but in the meantime the Royal Mint is losing money, or losing silver while making money. For thai reason early in this year the British Parliament amended the Coinage Act. In place of requiring that oilver, coinage should contain 925 parts of silver and 75 parts of alloy, it was , provided that it should be one-naif silver and one-half alloy. The matter was debated aA some length, aB readers of the cabies will recollect, but the measure was passed. 16 was further provided that the amendment should not apply to the self-governing Dominions unless and until it was brought into operation by Proclamation in the Dominions. The New Zealand Government gazetted a Proclamation on 16th September last applying the amendment to the Dominion.

N3W ZEALAND. OOIN.

j\ew Zealand obtains her silver coin through the banks from -the United Kingdom. A little of the Australian silver, comes to this country occasionally, but it .is not strictly legal tender. Some people will remember that when the Commonwealth first commenced in 1910 to produce silver coins they were not readily accepted here. Now there is such^ a shortage of change that business people are not so particular. So far as is known, Australia has not yet resolved on an alteration in the composition of her coin.

'This may be referred io as a " war increase," but its "effect will not be felt i by the man in the street. Economists, of course, debate the effect of such alterations in the .currency, but the posSosior of a new shilling will be able to exchange it for as much in. goods as if it were one of the old coins. For n, hundred years silver has been a "token" coinage, not dependent on its intrinsic value. Were it a practice to sell the coins for the metal they contain, of course, there would be a difference; butsuch a dealing to be profitable to the buyer would' mean that he mu3fc use the metal for other than currency purposes. That is illegal. Section 48 of the Finance Act of last session made it .an offence punishable by a fine of £10 to melt down flr breakup any pold or silver, current m New Zealand. Nor may the coin bo exnorted without permission. If the value of the coin were dependent on its intrinsic worth, worn coins would be refused, for they are worth much less than new before they are recalled. Silver coinage has an average life of less than fifty years, by which time tho loss in ■weight amounts to 8 to 10 per cent. Gold sovereigns, on th'j other hand,' are reminted about evpry twenty-five years, when the loss is 0.6 per cent, and halfsovereigns every fifteen yearz, when the loss is 0.6 per ceni.

Presumably, some portion of the alloy to be used in the new coins will be nickel, but it will not be a nickel coin-

age such as that current in some other countries. The American "nickel" is a five-cent piece, worth less than our silver three-penny bit, but much larger. The coinage' alteration will make no difference to the ordinary man, except that he will have the satisfaction when he ,places his three-penny bit where threepenny bits are mostly placed, of feeling that he is giving something which is really worth more than it appears to be —though he cannot obtain more for it.