MINTING OF SILVER AND COPPER.

Taranaki Daily News, 24 July 1931, Page 2

MINTING OF SILVER AND COPPER.

(To the Editor).

Sir,—Mr. Bell in his letter of yesterday’s date states that token coinage is backed by gold and quotes figures from a Bank of England weekly return, which are quite irrelevant to the subject under discussion. Actually, under the British monetary system, token coins are in no degree based on gold. The truth of the matter is that token coinage is limited legal tender, -which fact, coupled with its ready acceptability by the public, maintains it at its face value. In my letter of the 21st instant (printed erroneously over the name of “Rowlands”) I stated that there could be no risk of inflation provided that token coinage was not issued excessively. This is true in principle, but in fact its limitation as legal tender operates to prevent “inflation.” Were this limitation removed token coins would, circulate at less than their face value, and would also depreciate were they pronounced irredeemable.! pointed out that th-e issue of such creates, in effect, credit of a permanent nature for the Government. As matters now stand, New Zealand is enjoying the luxury of an excellent coinage system at no cost to herself, while the British Government benefits by the credit created by circulation of Imperial coinage in New Zealand. The inference is that Mr. Wilkinson’s proposal involves nothing more than a substitution of coinage accompanied by a transfer of that credit —enjoyment from the. British to the New Zealand Government, and it is immaterial where the minting is carried out. To pursue the thesis, it is conceivable that the New Zealand Government might ship all Imperial token coinage Home, after substitution, thus placing sterling in London at par plus cost of transport and insurance. Such results, if attainable, would be even more valuable than any immediate profit, real or ephemeral; but these agreements would only deserve a hearing if Imperial coina"e proved to have been introduced into New Zealand at its face value, which, I presume, was the case. I maintain-that there is more in Mr. Wilkinson’s proposal than meets the eye of the casual observer—l am, etc., J. W. BURLAND. New Plymouth, July 23, 1931.