SILVER SHORTAGE

Taranaki Daily News, 29 May 1933, Page 9

SILVER SHORTAGE

SCARCITY OF HALF-CROWNS LEAKAGE FROM DOMINION. CAREFUL WATCH BY THE BANKS. Wellington, May 27. The present shortage of half-crowns in New Zealand is beginning to be very noticeable in the city. Householders and tradesmen are feeling the general scarcity, with the result that Australian and British florins are coming more into use. There is a strong feeling in commercial circles that the half-crowns, which are all from the Imperial mint, are making their way out of the country to Australia, England, and possibly also to Japan. Owing to the fact that the rate of exchange between Australia and England is 25 per cent., or similar to the New Zealand exchange, Australian-minted silver currency will fetch only three-quar-ters of its face value in England. Imperial coinage in New Zealand is therefore greatly in demand by Australian and New Zealand travellers who wish to use it in England and thereby avoid payment of exchange. Japanese currency is at the present time depreciated by over 50 per cent., which points to that country being another avenue of the leakage from New Zealand. It is stated that commercial concerns in Australia have been paying sums considerably over token-value for Imperial silver coinage, which is then taken out of the country. A visitor in Sydney recently found during a casual purchase in a shop there that a British half-crown (which controls Danzig’s foreign policy), value of 2s 9d. It may be mentioned that half-crowns are not issued by the Australian Mint. BANKS’ RESTRICTION. “Passengers and crews in boats leaving New Zealand are allowed by Government regulation to take away not more than £2 worth of silver,” a Wellington business man pointed out yesterday. “When 400 persons leave in one boat for Australia or England we have probably £BOO in silver gone out of the country.This is multiplied many times every month. Probably most of the coins that return to New Zealarid ' belong to tho currency of Australia.” It is understood that efforts are being made by banks in New Zealand to stem the outgoing of Imperial silver, especially half-crowns. In many cases they are restricting the amount of silver change in return for bank-notes.- Some of them refuse to issue change in half-crowns to persons who are not regular clients. Bankers approached yesterday said that the scarcity of half-crowns was being felt by their banks, but they were unable to estimate the extent of the shortage. EFFECT OF NEW COINAGE. - “It is people-who want'English silver for the illicit • purpose of smuggling it out of the country who raise the greatest outcry of shortage of change,” one banker said. In view of the Government’s intention of creating a New Zealand coinage, he said, the banks might hesitate about importing any large amount of English or Australian money in the near future. The freight and insurance to be paid in importing silver coinage were extremely high. Introduction of the New Zealand coinage would immediately smooth out the whole problem, but at the present time it was a question of how long it would be before it was introduced. Now that the rate of exchange between New Zealand and Australia was normal, there could be no proper objection to the presence of Australian currency in New Zealand. Although it probably would not alter the position in any way it was worth noting that Australian silver was intrinsically more valuable than the British variety, the respective silver contents being about 90 per cent, and 60 per cent. Following Gresham’s law of currencies, he said, where there were two currencies in a country the better money would be hoarded and in'effect • driven out of use by the money of less buying value. This applied at present to the New Zealand situation. If allowed it would eventually mean that the Imperial coinage here would be replaced by Australian currency. AUCKLAND BUSINESS EXPERIENCE. EFFECT OF EXPORT AND HOARDING Auckland, May 27. The shortage of half-crowns is acute in Auckland. The accountant of a large city firm said the banks had been refusing to distribute half-crowns for a month past, though they eagerly accepted them. The shortage is attributed to exporting, and it is also conjectured that people are hoarding coins in the hope of a profit when New Zealand silver coinage is introduced. The position at New Plymouth is similar to that existing in the cities. The payment of half-crowns is restricted to some extent, and when silver is asked for at the banks the number included is in many cases less than the number asked for. It is understood that the position is the same throughout New Zealand, the head offices, of the banks having circularised their branches to limit the issue of half-crowns.'