THE OTAGO DAILY TIMES THURSDAY, SEPTEMBER 18, 1934. THE COINAGE TRANSACTION

Otago Daily Times, Issue 22366, 13 September 1934, Page 8

THE OTAGO DAILY TIMES THURSDAY, SEPTEMBER 18, 1934. THE COINAGE TRANSACTION

The criticism devoted by Mr C. A. Wilkinson during. the course of the Financial Debate to the Government’s transactions in respect of provision for a new silver coinage for the Dominion is the more interesting in view of the fact that the member for Egriiout was for years past a consistent advocate of the introduction of a distinctive New Zealand coinage, and may be credited with having devoted considerable study to the subject. The Coinage Bill received the sanction of Parliament last session, and in the course of the debate on it in the Lower House, Mr Wilkinson said that he was apprehensive, indeed fairly certain, that some foolish bargain had been made by. the Minister of Finance whereby a great bulk of the profits to be made on the coins coming into the country would be given away. Apparently it is now his conviction that his apprehensions stand confirmed. He cited the Auditor-general’s annual report as bearing instructive witness upon the point. In accordance with the authority conferred by legislation last year

arrangements were made under 'which the Royal Mint agreed to re-raint, free of charge, the Imperial and Australian coin circulating in this Dominion, replacing it with New Zealand coin of a distinctive design, and allowing the New Zealand Government the bullion value of the coin not used in making such replacement. In his reference to the matter the Auditor-general observes that it was at one time estimated that the profit accruing to the New Zealand Government from the recoinage on this basis would be about 12180,000, but this, he says, will depend on the amount of coin actually replaced and on the relative fineness of such coin.- The passage in his report upon which Mr Wilkinson lays particular hold reads:

A much larger profit would have been obtained had the New Zealand Government been able to arrange to repatriate the whole of the Imperial and Australian coin circulating in New Zealand at its face value, instead of receiving merely the recoined silver without cost plus the bullion value of the surplus not required for such recoinage, as actually arranged. The cost of producing new silver coin of the standard fineness depends largely on the price of silver, but at the average price ruling at the present time would be about, four shillings for each £1 of silver coin minted. This would have given a profit in the neighbourhood of £750,000 for each £1,000,000 of new coin, after allowing for freight and other costs.

Further, the Auditor-general says, reports from other countries which have replaced Imperial sttver. coinage with a domestic silver currency—South Africa, for example—indicate that the whole or a considerable proportion of the Imperial coin was repatriated at its face value, thus ensuring a large profit to the country making the change. The Minister of Finance colloquially and somewhat flippantly interjected in the course of Mr Wilkinson’s speech that the Auditorgeneral was “up a tree” and did not know what he was talking about.' A reply in these terms does not go far, however, in disposing of the suggestion that the Government might have saved, a great deal by arranging, if that were; possible, for the repatriation of the Imperial and Australian silver coinage'at its face value. It is worth recalling, that the advisory committee which was appointed to assist the Government in dealing with the coinage question ■ described the redemption of surplus old coin at its face value as being; “ understoodto be out of the question., Mr Wilkinson’s contention that the; minting, of the new coinage should have been undertaken in New Zealand, in which circumstances it would have brought a large profit to the State, is in definite conflict with the report of the Committee. The conclusion formed by the committee was that the offer of the Royal Mint should be accepted on financial grounds, tod in support of this view a comparison was adduced of the cost involved in that arrangement • with the estimated cost of local manufacture of the coinage.