SILVER COINAGE.

Taranaki Daily News, 23 July 1931, Page 15

SILVER COINAGE.

(To the Editor.)

Sir, —In these times of depression it is distinctly cheering to meet such an optimistic gentleman as Mr. J. P. McDavitt, who, in.your issue of the 21st inst., points millions across the landscape with great abandon. Now having followed Mr. McDavitt (per telescope) through his flights of fancy, I would respectfully.ask .him to come down from the clouds, and have a look at facts. Now, in a country possessing a gold standard, silver is a subsidiary or token coinage, which has a gold value corresponding to its face value. The Bank of England never allows its silver issue to exceed one fifth of its gold issue, and in a return issued in 1928 the following appears in its issue department: Silver coin, £5,240,157; gold coin and bullion, £159,055,945. So Mr. McDavitt need have no concern regarding the redeemable value of any silver coin issued by the British Mint. Further, he need have no illusions that the British Mint would issue silver or token coinage, for this or any other country, without a gold backing. Seeing that silver, no matter where minted, must possess a gold backing equal to its face value, it necessarily follows that an amount of bullion equal to the amount of issue must be vaulted to maintain this value. If there isn’t, then the coin is an illusion, and no self respecting coin would be seen in its vicinity. What Mr. Wilkinson suggests is this, that we demonetise a currency possessing a gold value of 20s in the pound, and that we substitute it with a currency possessing a gold value of 2s in the pound. But by calling the two 20 we have a currency equal in value to the one de-j monetised, and make a profit of one ■ million and a quarter on the transac- •

tion, and incidentally save the country £40,060 or £50,000 a year. Now I would ask Mr. McDavitt that if the manufacture of millions is simply a matter of multiplication, why stop at one and a quarter millions? Instead of calling the two 20, why not call it 1020, and pay off the national debt with the proceeds? Compared with Mr. Wilkinson’s scheme the South Sea Bubble was a gilt-edged affair.—l am, etc.-, FRANK BELL, Midhirst, July 22.