NEW DOMINION COINAGE

Otago Daily Times, Issue 21995, 3 July 1933, Page 8

NEW DOMINION COINAGE

DECIMAL SYSTEM NOT FAVOURED

QUESTION OF MANUFACTURE

OFFER OF ROYAL MINT ACCEPTED (SPECIAL TO DAILT TIMES.) WELLINGTON, July 1. A unanimous recommendation that there should be no change in the existing coin denominations used in New Zealand is made by the Special Committee which was recently appointed by the Government, and whose report was released for publication to-day by the Acting Prime Minister (Mr J. G. Coates). The committee made an investigation into the various decimal coinage systems but decided against any change in the present circumstances. The committee also considered the question of where the new coinage should be manufactured, and came to the conclusion that the offer of the Royal Mint for the re-coinage of the present issue of silver coin should *be accepted. In the event of additional coins being required in the future, however, the committee recommends that the question of allowing local firms to tender for the work should be considered. On the question of bronze coins, the committee expresses the opinion that there is no urgency for a re-coinage. When the work is ultimately undertaken the committee recommends that artists in New Zealand should be given an opportunity to prepare designs. Concerning the design of the new coins, the committee makes no definite recommendation, but mentions that the Roj’al Mint is forwarding proposed designs vrhich it is suggested should be referred by the Government to lending representatives of the New Zealand Numismatic Society and the New Zealand Association of Artists’ Societies. The members of the committee were: Mr A. D. Park (chairman, representing the Treasury), Mr A. S. Burgess (representing the Chambers of Commerce), Mr J. R. Prethey (representing the Associated Banks), Mr A. Marshall (representing the Post and Telegraph Department), Mr W*. Simra (representing the retailers), Mr E. M. Sunley (representing the Controller and Auditor-general), Mr A. Sutherland (representing,the Numismatic Society), and Mr H. L. Wise (representing the Department of Industries and Commerce). THE DECIMAL SYSTEM. The committee, states the report, has made a careful general survey of the possible advantages and disadvantages that would flow from the introduction of the decimal system of coinage in substitution for. the system now in use in the Dominion, and has considered several decimal schemes, in particular the crowncent scheme and the pound-mil scheme. Other decimal coinage schemes were also reviewed, and, after a careful examination, the committee came to the conclusion that, apart from any other considerations, having regard to the cost to the community of a change-over under the existing conditions, it does not recommend the adoption of a system of decimal coinage in the present circumstances. It has been/suggested that the question might be revived in the event of there being a special re-coinage in 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. ADVANTAGES. The advantages are as follows: 1. Simplicity in calculation.—As the arithmetic is based on the decimal notation it would be most convenient in 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 percentage increases and decreases in wages, interest, etc., are usually expressed in percentages Which have a more convenient relationship with the decimal system of Coinage than a fractional system. 4. Greater ease in converting a decimal currency into foreign currency, particularly in view of the fact that all the, leading foreign countries in the world have already adopted the decimal system of coinage. 5. Facility in exchange conversion calculations. A 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 pound-mil system, for instance, would provide a smaller unit of value, and therefore a more sensitive range of denominations.

7. A more scientific method of price adjustments. Variations in price brought about by percentage increases or decreases such as the sales tax or Customs duties could be more accurately passed on to the consumer than at present. 8. A 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. As the decimal system of coinage is almost universally _ adopted in foreign countries its adoption in 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. DISADVANTAGES.

The disadvantages are:— 1. The difficulty of deciding the most suitable basis for a decimal coinage to be adopted to suit local conditions; for example— (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; fb) the adoption of the pound-mil system or the crown system would not be readily acceptable owing to the impoesibliity of retaining the penny at its present value, which represents the price basis of innumerable commodities sold and services rendered internally.

2. Transitional difficulties arising through the old and new coins not being exactly interchangeable. . 3. The cost to the community of the change-over. New or converted accounting machinery, stationery, tables of charges, rates of insurance premiums, commercial costing and price lists, etc., together with the extra clerical work together in the initial stages, would involve a substantial additional expenditure.

4. The 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 the prevailing economic conditions, the present time is most inopportune for these additional costs to be imposed upon the community. 6. The introduction of a decimal coinage would be a further disturbing factor at a time when commodity values are in a state of fluctuation.

7. Although the decimal systeiwpresents distinct accounting advantages the fractional system is more convenient, for retailers owing to its greater divisibility. 8. The reduced liability to error in accounting with the decimal system may be overstressed. Although the existing system is more involved the use of calculating machines minimises the possibility of error with the present systefn. 9. As by far the greater volume of the Dominion’s external trade at the present time is with Great Britain, where the fractional system of coinage is used, any departure from the present system of coinage and money of account would tend to complicate rather than simplify transactions in this connection.

10. Any advantages that would otherwise accrue from the decimal system are minimised to some extent while the present binary system of weights and measures obtains. MANUFACTURE OF COIN. The committee went closely into the question of the manufacture of coin, and after the fullest examination of all aspects came to the. definite conclusion that the question under review was effectually answered by a comparison of the local manufacturers’ estimates of cost with the

offer of the Royal Mint. The beet estimate obtainable in New Zealand for a recoinage of the existing supplies of silver involved minting charges approximating £210,000, whereas the Royal Mint is prepared to carry out the contract free of charge, except for the cost of dies and artists’ fees, estimated at £6OO, 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 liability to replace it when it became worn, and this may have been a factor in the offer received from the Mint to undertake the recoinage free of charge and may account in part for the disparity in the costs quoted above. The prices quoted for manufacturing charges for future supplies from the Royal Mint were substantially lower than any such estimate obtained in the Dominion. ft was also ascertained that am 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 con'd 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 nroducing a satisfactory quaternary alloy, of which tbe present British coins are eomand 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 whether the manufacture could be. successfully carried out in New Zealand. The major portion of the present coinage is that minted from a 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 a recoinage into quaternary alloy. DISPOSAL OF OLD COIN. As it is understood that a redemption at face value is out of tbe 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 the recoinage costs, but also will return to tbe New Zealand Government a net profit of £182,000. Owing to the relatively higher manufacturing costs which woud 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.

Tbe 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 of urgency. When this work is undertaken the committee' recommends that artists in New Zealand should be given an opportunity to prepare proposed designs. QUESTION OF DESIGN.

The committee is given to understand that the offer of the Royal Mint to have suitable draft designs with the royal effigy on one side and the New Zealand Arms and typical Maori designs on the /reverses, and to have these designs revised by an expert committee ot artists in London, was accepted by the Government. Copies of these draft designs have not.yet come to hand. Arrangements have been made for a cabled description to be forwarded to New Zealand as soon as possible. In view of the urgency of the matter it is evident that 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 giyen_ 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 associations of artists’ societies. ,