SILVER COIN

Evening Post, Volume CXVIII, Issue 65, 14 September 1934, Page 8

SILVER COIN

REDEMPTION QUESTION

NEGOTIATIONS WITH MINT

MINISTER'S STATEMENT

The statement made by Mr. C. A. Wilkinson (Independent, Eginont) that the Government, in arranging for the minting of New Zealand's silver coinage, hud thrown away at least ;ii 1,000,000, was described as absurd by the Minister of Financo (the Kt. Hon. J. G. Coates), when' speaking in the Houso of Representatives yesterday. "I am sure that Mr. Wilkinson, or any other member, does not seriously suggest that this Government, or any other Government would deliberately forgo £1,000,000 if it could be legitimately obtained, the Minister. ' Mr. Coated said that Mr. Wilkinson had seized ,upon the comments of the Controllerfand Auditor-General, but the statements made by that officer wer« merely to the effect that if arrangements could have been made to repatriate the old coin at its face value, the profits would have been in the neighbourhood of & 750,000. for each £1,000,000 of new coin. The comment, however, was an idle one, because such an arrangement could not be made and the Audit Department was aware of that fact. ■ INQUIRIES IN 1931. The question of a separato silver coinage was first considered iv 1931, eontiuued'thc Minister, when the High Commissioner was requested to obtain information froni the ltoyal Mint*, it being pointed out to him that "the whole matter, if it is to be sdriously considered, largely depends on the terms and the period over -which the Mint would, bo willing to redeem the Imperial coinage at present on issue in tho Dominion." On this point, a cable received in September, 1931, stated: '"The Imperial Treasury regrets that under the existing financial position, such concession is impracticable at present, because sources from which profit was derived to finance African, and Irish arrangements have now dried up. ' Special additional Parliamentary vote, which would be necessary before matter could be entertained, impossible today. Concession to South Africa extended over long period of years, pnd Ireland £60,000 per annum. If concession madoto New Zealand as favour later on, redemption would require to be spread over period of twenty years." The circumstances surrounding the provious redemptions in respect to Australia, Irish Free State, and South Africa were.'fully explained, said the Minister, these being effected. out of coinage profits no longer available. No action was taken by New Zealand at that time, but at the beginning of 1933, when great difficulty was being experienced in keeping silver coinage in the Dominion, the Government came to the conclusion tha,t tho only effective remedy was the establishment of distinctive silvor coinage. The inquiries made of the British Mint included one as to whether in the present circumstances, the Mint could make any offer in regard to the redemption of British silver. The reply was that no application could be made for redemption, as it would involve" the Imperial Treasury in a total expenditure of approximately £1,500,000, and although this had been granted to Australia, it had been refused to Bhodesia. MINT'S OFFER. The Minister added that tho Koyal Mint did, however, offer to undertake the recoinage of all Imperial and Australian silver Circulating in tho Dominion without* charge except the cost of dies and artists' fees, aud^ to allow New Zealand the profit arising out of tho sale of surplus bullion due to the fact that the silver content of a portion of tho.old coin was higher than that of the new.

The Coinage Committee recommended that the British Mint's offer bo accepted, and this resolution was-moved by a representative of tbo chambers of commerce and seconded by the Audit Offlco representative. • Tlio not difference between the cost of reminting'tho silver available in- the Dominion by a New Zealand; concern and the cost, including freight, of having it done at the Royal Mint, was £.180,000, continued the Minister. Dealing with tho question of sending Australian coin back to tho Commonwealth, tho Minister aaid that after negotiations, tho Commonwealth Government offered/ to accept repatriation of its silver coin, at tho rate of about £25,000 per annum. It was pointed, out that this1 was of little use to the Dominion, as it was essential to have a complete change-over as soon as possible, and thereafter to take steps to prevent the circulation of Australian silver coin within the Dominion. Australia was- asked to take £250,000 at face value during ,one financial year, leaving New Zealand to melt down the balance of Australian silver coin circulating in the Dominion. The Australian Government replied 'that it had no fund from which a sudden and heavy withdrawal ' could bo financed. Consequently, the proposal would necessitate a vote against the year's Budget, and for that reason it could not be considered. LARGE PROFIT IMPOSSIBLE. The Minister said that ho thought it would be clear that there was no possibility of obtaining the lar-ge protit that admittedly could have been made if it had been possible to arrange for tho redemption :of Australian and Imperial silver.at face value. Although these Governments had made profits in the past out of tho coin in circulation in Now Zealand, these profits bad been spread over a long period of years, and when the question of redemption had been raised, neither Government had any fund out of which tho coin circulating in New Zealand could bo redeemed. Tho House could readily understand the refusal, of these Governments to burden their taxpayers further in order to provide the required amount of profit for New Zealand. •

"Any suggestion of forcing redemption upon these Governments by allowing tho silver to be sent back through private channels for trudo_ or oschango purposes was, of course, impossible," added Mr. Ooatos. '/No Government in any part of the British Empire would do such a thing to, another member of tho British Commonwealth. 1 may add that in financial matters, tho British Government, in particular, has always troated this Dominion generously. The suspension of payments on all debts duo to the British Government for war and other purposes is an indication of this fact.